For years I have been writing about the state of public pensions among the states. Over those years the situation has only gotten worse and the unfunded liabilities have grown. Fixing it should anyone seriously try requires cutting benefit promises and/or raising taxes or cutting many other state services. This is mostly a blue state problem. Today the three worst states are California, Illinois and NJ. Guess what they have in common?
No, it’s not empathy for public servants. It’s politicians in bed with public unions following irresponsible fiscal policies for votes. It’s making grand promises with no way to pay for them and not telling taxpayers the truth about the long-term costs.
I‘m tempted to extend this sceanario to a national level so I will.
Consider all the new proposals being made by the American political left and then consider the state of several government trust funds including SS and Medicare which have been allowed to decline to dangerous levels and to accumulate hundreds of trillions of dollars in unfunded liabilities. Do we have any reason to believe it will be different with new and expanded programs?
Is this issue unique to one political party No, there are surely irresponsible politicians on all sides. But to be honest there are those who have a unique ability to appear sympathetic, to appear fighting for the underdog, to make their ideas necessary for social justice, to create the impression only other people will carry the cost.
In reality being dishonest about costs and funding merely shifts the burden to the next generation which is what is happening now… and still we have those who want to expand SS benefits even before making it solvent let alone sustainable.
“The Illinois crisis is so severe that paying the promised pensions would require a 30-year property-tax increase that would cost the median Chicago home-owner $2,000 a year,according to a study from three economists at the Chicago Fed. Not a penny of that added tax money would pay for better schools, police, roads, hospitals or libraries. Already, Illinois’s property taxes are among the country’s highest. Siurce: WSJ 7-11-18”