Puerto Rico is in a financial free-fall, and the federal government is actively trying to prevent a total economic meltdown. Recently, legislation was introduced in the House by the Natural Resources Committee to help resolve Puerto Rico’s financial crisis, an effort that is well-intentioned and far superior to any taxpayer bailout of the territory. There are concerns, however, that still need to be addressed before the bill should go forward.

Recently, the public debt crisis in Puerto Rico has sparked widespread discussion about the need for public pension reform. The island territory is already $72 billion in debt, with shortfalls in the public pension fund of up to $30 billion. Without major changes in government spending patterns, Puerto Rico is in danger of becoming insolvent, sending the already brittle economy into a death spiral. While many on the left call for the immediate restructuring of Puerto Rico’s debt, the island’s plight is just the latest example of a state or territory misusing and abusing their public pension system, demonstrating the dire need for reform.

The Congressional Budget Office (CBO) has released its updated budget projections, and there's no sugar-coating the numbers. The federal government’s annual budget deficits were already slated to start rising again in 2016, but thanks to some discouraging economic growth predictions and a bloated budget deal that added tens of billions in new spending, we’re now looking at returning to trillion dollar annual deficits in only six years (2022).

Recently, the Congressional Budget Office released their Long-Term Budget Outlook for 2015. The official CBO Outlook included some pretty scary figures. The forecast projects the deficit as a percentage of GDP to increase from below 3 percent, to nearly 6 percent in the next twenty-five years. Over the same time frame, the CBO forecasts national debt to increase to over 100 percent of GDP.

In the last decade we have had a housing crisis, a banking crisis and a car manufacturing crisis. If student loan debt does not catch up with us first, the next economic crisis is likely to be state and municipality pension debt.

Democracy and Power 104: Future Debt Burden A government debt is a government claim against personal income and private property – an unpaid tax bill. —Hans F. Sennholz

This week, the Congressional Budget Office came out with its Long-Term Budget Outlook for 2015. The report foreshadows growing deficits, mounting debt, and economic harm if the status quo is allowed to continue.