Climate official warns California ‘effectively ruined’ by $1T gap

California is “out of a job,” climate entrepreneur David Friedberg said in a recent interview with “Sourcery,” pointing to pension debt, legislative hurdles, and government spending as the cause of the long-term fiscal crisis.

Friedberg was asked to share a “hot” discussion in politics and policy. He cited California’s fiscal outlook as a largely overlooked issue with ramifications that could extend beyond the state.

“People don’t realize how strong California is, and I worry that if California falls, so will the union,” Friedberg said.

He pointed out that California’s financial exposure is directly linked to its public pension system, which guarantees retirement benefits to state employees and retirees. According to Friedburg, the gap between what is contributed and what is owed has grown significantly over time.

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He pointed out that California’s financial exposure is directly linked to its public pension system, which guarantees retirement benefits to state employees and retirees. According to Friedburg, the gap between what is contributed and what is owed has grown significantly over time.

“The amount owed to them is between $250 billion and $1 trillion dollars more than we were paid,” Friedberg said.

Friedburg compared California’s position to the federal government’s, stressing that states operate under tight fiscal constraints and cannot rely on fiscal policy tools to fix deficits or obligations.

“If it was the federal government, it would be like, OK, we’ll just print more money,” he said. “California doesn’t have the ability to print money, so California has to pay for this.”

He also presented legal precedents that, in his opinion, reduce the state’s flexibility in dealing with pension liabilities, even for current employees who have been promised benefits.

“There was a Supreme Court case in California that said once an employee has been awarded retirement benefits… you can never reschedule their retirement benefits,” Friedberg said. “It has to last forever.”

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In addition to protecting benefits, Friedberg said California does not have a legal mechanism to declare bankruptcy, which also limits the options available to companies facing insolvency. (Tom Stoddart/Getty Images)

In addition to protecting benefits, Friedberg said California does not have a legal mechanism to declare bankruptcy, which also limits the options available to companies facing insolvency.

“The state cannot declare that he is dead. There is no way for the state to declare that he is illegal. There is no law that allows that,” he said. “No empire has ever declared itself dead.”

Friedburg said that under the current financial framework, pension obligations must be paid before other debts, including debt owed to investors who fund state operations.

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“Retirement benefits are higher in California bonds,” Friedberg said. “So you have to pay the retirement benefits before you pay all the bondholders.”

Friedburg described the situation as an approaching “fiscal cliff”, saying the scale and nature of the crisis leave limited ways forward without wider economic or political consequences.

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Newsom’s upcoming podcast will be the second he has been involved with. (Getty Images)

“I asked … where did the $14 billion that went into that high-speed rail project go? “Whose money is that?”

“Where did the money go?… You can follow the dollars. Where did it go? Who has that money?” Friedberg asked.

He said California needs structural changes to address this issue.

“California’s active bankruptcy is a serious threat to the country, and I think we need to figure out what we can change to fix it,” Friedberg said.

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Newsom’s office did not immediately respond to Fox News Digital for comment.