Based on government accounting rules, public pensions were underfunded by about $885 billion in 2011, which certainly indicates a major public pension crisis. But the real numbers are much worse than that. Public pensions are allowed to use far laxer rules in determining future liabilities than private pensions are allowed. This means they need far less money on hand to satisfy accounting standards. As logic would tell, saying you have enough money to meet future expenses is far different from actually having the money.
State Budget Solutions has released a detailed analysis of public pension liability and calculates that if public pension had to calculate liability in the same way that private pensions do, that total unfunded public pension liabilities in 2011 were $4.6 trillion and are about 41% funded, far below what they need.
The fancy pensions that were offered at the time was during an economic boom to which estimates on the future were grossly under estimated. If you go back to some of those reports, the Dow should be at 25,000 or at least a lot closer to that number than it is right now. I think there needs to be more and more cities and states filing for bankruptcy and government to start shrinking to meet actual sustainable budgets based on actual revenues, not projected revenues that are grossly over estimated time and time again by the greedy bastards that want to spend spend spend money that we don’t have and won’t have. They know better, knew better, but lied to us and abused their power to get what they wanted however they wanted it. After all we’re the ones who have to pay for it all, not them. They’re just there to take our money and spend it how they see fit. The main problem is career politicians, greed, and corruption.
Its public unions too, they really forced the issue, to the point that the state of California has to pick up the tab if a public pension has a shortfall.
Even more reason for California to file for bankruptcy don’t you think? We need to stop the bleeding and bankruptcy seems to be the direction we’re heading towards. I mean what other choice do we have?
States can’t file bankruptcy. There’s no provision for them to do so in any bankruptcy code.
So then the equivalent of that happening is what? California just shutting down it’s government? What are the Federal provisions for when a state disbands it’s own government for lack of funding or otherwise?
California keeps kicking the ball down the road, playing pretend-and-extend. Sooner or later it will stop working.
No one knows what happens if a state can’t pay its bills. It’s never happened before