Steven Malanga writes for City Journal that federal taxpayers might be called upon to bail out profligate government spenders in cities across the United States.

[R]emember the long road that Detroit and other cities have traveled to financial distress. Politicians consistently made bad deals for constituents, while union leaders regularly sued for plusher benefits, thoughtless about how city governments could pay for them. And voters persisted in electing those governing in this irresponsible way.

Detroit’s emergency fiscal manager, Kevyn Orr, recently said that the city has been going broke “openly and notoriously” for over a decade, without confronting its problems. He’s right. Though the Motor City has faced fiscal challenges since its economic decline began in the late 1970s, things worsened considerably when financial markets plummeted in 2000, hitting the city budget hard. Detroit found itself with one of the nation’s lowest municipal bond ratings; a Moody’s analyst told the Detroit News that the city’s budget was “very, very challenged.” Yet the very next year, Detroit voters elected as mayor an inexperienced 31-year-old state legislator, Kwame Kilpatrick, who gave no sign that he had a plan to deal with the city’s fiscal crisis. Kilpatrick would employ a series of transparent financial gimmicks to paper over Detroit’s budget woes, including borrowing millions for the city’s pension fund, just as municipal retirement debts were getting onerous. In 2005, the city’s auditor warned that if the gimmicks continued, “insolvency is certain.” …

… Though Chicago is more economically robust than Detroit, its budget is also under severe stress, thanks to a pension system that’s in even worse shape than the Motor City’s. One of Chicago’s pension funds has just 25 percent of the assets needed to pay its retirement promises; another has just 31 percent. Fixing the system under current law would require an untenable doubling of property taxes, city officials estimate. That makes Chicago another likely candidate for a federal rescue.

Local budget watchdogs have warned about this looming catastrophe for years. Back in late 2000, for instance, the Civic Federation of Chicago reported that the city’s pension funding was so flawed that “the city may have a difficult time meeting the unfunded liabilities.” Meantime, city officials and unions negotiated richer and richer contracts, driving the cost of employing the typical Chicago government worker to about $95,000 per year, counting pay and benefits.

Regular readers in this forum will not be surprised by the depth and severity of the nation’s public pension problems.