As we previously reported, states are facing a future pension crisis to pay for the retirements of Baby Boomers and for the overall growth in state government employment. Now, a new study out from the Kellogg School of Management says that in addition to a $3 trillion shortfall in state pensions, local governments are facing a $500 billion+ shortfall. Neither of these figures includes Social Security which is a federal program.
"Current pension assets for plans sponsored by Philadelphia can only pay for promised benefits through 2015, while Boston and Chicago would deplete their existing funds by 2019. Cincinnati, Jacksonville, Florida and St Paul have current pension assets that can only pay for promised benefits through 2020."
So, where are we going to get the money to fund these shortfalls. According to the video, municipalities are going to have to choose "between funding debt or programs."
That statement underlines the fallacy that the liberal economic agenda has; that you can have your cake and eat it too. Of course, tax increases are also on the table. So, where is the government going to find $3.5 trillion (actually they will need to find more wealth 'lying around' out there unless they plan on taxing it at 100%)?
Anybody out there still believe that the government sponsored retirement plan is best?