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Wednesday, March 30, 2011

Pension-Crisis Deniers Never Sleep

Short term thinking.  What happens when the money runs out?
No matter what data you look at, you can see that many state pensions — led by Illinois and New Jersey — have underfunded their liabilities for years, which means that when their pension plans run out of money, these states will have to either raise taxes dramatically, cut non-pension spending massively, or alter their pension formula for current employees. The question of whether states will be allowed to change the benefits for current retirees will depend on the courts, but the reality is that when there is no more money, there is no more money.

You would think that those who support public pensioners would want to insure the sustainability of those pensions.  But you would be wrong.

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