Capitol Alert: California healthier than Greece, The Atlantic mag concludes

When Republican presidential candidate Mitt Romney made a joke that compared California to Greece the other day, the state's Democratic politicians reacted with anger, rather than laughter.

"Entrepreneurs and business people around the world and here at home think that at some point America is going to become like Greece or like Spain or Italy, or like California -- just kidding about that one, in some ways," Romney said during a campaign stop in Iowa.

"Romney knows just as little about the Golden State as he does about the rest of the world," Gov. Jerry Brown's spokesman, Gil Duran, snapped back.

The Atlantic magazine took the dustup seriously enough to generate five charts comparing California with Greece and other troubled European countries. Correspondent Jordan Weissmann concluded, "If anything, Greece, Spain and Italy would love to be in as good shape as California right now."

But at least one of those charts -- dealing with debt -- appears to show California in a better light than it deserves.

Based on data from the state treasurer's office -- numbers that Treasurer Bill Lockyer has often cited -- the chart pegs California's debt at 4.7 percent of its nearly $2 trillion annual economic output. Greece's is 132 percent, Italy's is 123 percent, and Spain's is 72.1 percent.

The underlying debt number, $90 billion, however, counts just the state's outstanding general obligation bonds. It doesn't count local government debt, particularly redevelopment agency debt, non-general obligation bonds, the $30-plus billion in debt incurred to cover recent budget deficits, the $10 billion California owes the federal government for unemployment insurance loans and, most of all, countless billions of debt in the form of unfunded liabilities for retiree health care and pensions.

Adding those into the total might put California's real public debt at perhaps 15 percent to 20 percent of economic output -- nowhere near the level of Greece, but a lot more than the official number reflected in The Atlantic's chart.

The other charts dealing with economic output, recent economic growth, unemployment and budget deficits appear to be more accurate, and therefore more comparable. And Weissman's basic conclusion that California is in much better shape than Greece, et al., is probably correct.