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State Pension Catastrophe - Underfunded by $3 TRILLION? |
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Written by Thomas Peters
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Friday, 18 June 2010 09:00 |
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 The news about pensions only gets worse, as this Fortune article reveals:
When the majority of the country's 225 state-sponsored pension plans release their annual reports this month, the numbers will paint a bleak picture. Unfortunately, the reality may be even worse.
... The Pew Center on the States estimates that states' total unfunded liability is $452* billion, but according to Josh Barro, Walter B. Wriston fellow at them Manhattan Institute, it's somewhere in the range of $2 trillion to $3 trillion, which is about equal to the bond debt that states have outstanding. "It's likely states are twice as much in debt as we thought," he says.
Two-to-three trillion is an amount of money that is hard to grasp for us, because it is so far outside of our common experience (this article helps explain visually what one trillion dollars actually looks like - read it, then multiply the final figure by three!).
Okay, so given that this is the crisis we are facing - how do we fix it? What stands in the way?
As a consequence, state services such as public education, road repairs and daycare, will have to vie with retirees for scarce resources. But here the deck is loaded; once a retiree is promised a benefit, by law the state cannot renege.
In other words, if we are going to fix this, we must be willing to change the laws. It appears from all the stories I have read (and blogged about for APP), that the pension system clearly needs to be reformed. There are ways of re-negotiating the pension plans of current retirees to bring them down to a more just and sustainable level.
Otherwise, everyone is going to be on the road to ruin, not just those who now work. |
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Last Updated on Thursday, 17 June 2010 16:28 |
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Gregg: Fatal Attraction - Democracy and the Welfare State |
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Written by Thomas Peters
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Tuesday, 22 June 2010 10:14 |
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The always-enlightening Samuel Gregg writes Expansive and expensive welfare programs have brought European social democracies to the verge of catastrophe. Now the dynamics of democracy may be an impediment to economic reform.
A week, it is often said, is a long time in politics. Much, however, can change in a year. Only a short while ago some European politicians were touting the European social model’s superiority over what many continental Europeans deride as “Anglo-Saxon capitalism.” Now, however, governments across Europe are scrambling to avoid the fate of Greece. Moreover, they are doing so by contemplating—and, in some cases, implementing—the hitherto unthinkable: reducing their budget deficits by diminishing the expansive welfare states to which many Europeans have long been accustomed.
In doing so, these governments are finally acknowledging a truth initially obscured by the crisis of the euro: that for all the disarray generated by the euro’s recent tribulations, Europe’s economic woes have more systematic causes.
[Read more at the Public Discourse]
It is particularly interesting to note Gregg's claim, towards the end of the essay, that if Americans return to following the principles of this country's founding, we may very well be able to avoid this "spiral" of falling ever deeper into the unsustainable welfare state. |
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APP President on "How to Lose the Presidential Nomination in Two Days" |
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Written by Thomas Peters
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Monday, 21 June 2010 11:32 |
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 APP's President, Frank Cannon, was published over the weekend on the Fox Opinion Forum, commenting on Governor Mitch Daniels' injudicious call for a "truce" on social issues last week.
We have critiqued Gov. Daniels' opinion on the blog recently, and are now happy to introduce this more extensive analysis from our President. Here are some highlights:
The Hoosier governor’s truce talk is wrong on so many levels. It needlessly demeans one portion of the conservative coalition – the “ethnic, Catholic (and, more recently, evangelical) blue collar” vote that Ronald Reagan led into fealty with the GOP’s traditional hawks and economic conservatives. And social conservatives are not just a portion of that coalition – they hold views on issues like federal abortion funding and protecting the definition of marriage that represent a significant majority.
... Social conservatives are, by and large, resisting public policies handed down from on high by unelected judges. In many cases, they are rallying for causes the elites thought they could resolve by undemocratic means. Since the passage of the Obama health plan, five state legislatures have voted to bar coverage of elective abortions in their insurance exchanges. Believing they had largely won the battles over public abortion funding three decades ago, pro-life Americans are fighting again for the same principle in battles they did not seek.
[You may read the whole piece here.]
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Last Updated on Friday, 25 June 2010 01:44 |
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Tollefsen: Healthcare, Abortion, and the Call of Conscience |
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Written by Thomas Peters
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Tuesday, 22 June 2010 10:21 |
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Christopher Tollefsen makes a fascinating point, suggesting that Under the new health-care law, pro-lifers may have to accept inferior health plans, rather than wrongly pay into abortion providing ones:
Suppose that The Patient Protection and Affordable Care Act (PPACA) required, not an abortion pool, but an infanticide pool, or an unwanted adolescent homicide pool, or an unwanted spouse homicide pool. That is, suppose that the pool existed to make possible the killings of born human beings of any age. Payment into the pool was, as in the current PPACA, a necessary condition for a particularly beneficial type of coverage; thus there was strong motivation for paying in, and some, perhaps serious, sacrifice to be expected from not paying in. But, as in current PPACA, it was also possible not to enter the pool: other packages were available that did not involve the homicide pools.
It is abundantly clear that no such pool would be tolerated, regardless of the subtleties of an argument that paying into the pool would, or would not, involve complicity in the contemplated homicides, or even if it were possible or even inevitable that the homicides might not, in fact, be performed. We would not accept the stated possibility or desirability that others or ourselves could be victims of such a pool as the possible cost of making even these significant benefits available. The very idea of such pools is offensive and unacceptable, even if the pool never led to a single actual homicide.
[Read the rest at The Public Discourse]
Sometimes in the debate over health care one can miss the forest for the trees. Tollefsen helpfully re-focuses the enormity of what is being asked of pro-lifers who participate in these health care pools that also make possible the killing of innocent unborn human life. |
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I thought I had seen it all when the Democrats maneuvered to pass their health care bill, but it looks like I was sadly mistaken: