Need an example? How about a bankrupt public pension system that amounts to about 150 Enrons.............
The pension tsunami - aka the incessant need for liberal-run unions to force governments to make promises that cannot possibly be met - is on its way. Just this morning I wrote a post regarding the pension problem in Michigan (Michigan Pension System $50 Billion In The Hole, Healthcare Liablity Only 1.9% Funded. Detroit Free Press Finds Silver Lining: "On the bright side, it's worse elsewhere"). On the heels of that came this article about other states being in similar dire straits. From Reuters via memeorandum (based on results from a Pew research via Instapundit): U.S. state pension funds have $1 trillion shortfall: PewU.S. states face a total shortfall of at least $1 trillion in their funds for employees' pensions and retirement benefits, and their financial problems are quickly mounting, according to a report released by the Pew Center on the States on Thursday.Ouch!
Illinois is in the worst shape, with only 54 percent of its pension obligations funded, according to the report, which looked at fiscal year 2008.
Because the analysis did not encompass the final six months of calendar year 2008 -- most states' fiscal year's end during the summer -- it does not include the market downturn that devastated many funds' investment portfolios."The funding gap will likely increase when the more than 25 percent loss states took in calendar year 2008 is factored in," the report said.It's not the underfunding that was irresponsible, but rather the fact that such dinosaur programs such as pensions exist at all in this day and age. All public employees need to be on defined contribution plans like 401 (k)s which the private sector has switched over to.
Regardless of stock market fluctuations, pension funds were destined to fall down a budget hole, the non-profit research center found.
"Over the last 10 years, many states have shortchanged pension plans in good times and bad," said Susan Urahn, the center's managing director, who called the beginning of the century a "decade of irresponsibility."States did not save for the future and manage costs well, said Urahn. She also cautioned that the 8 percent return on investments most states typically expect may need to be lowered.Gee - ya think? How about don't make promises you cannot keep? These programs are inherently unsustainable. Promising people a salary when they no longer work for the taxpayers was always a disaster in the making.
If these people were in the private sector they'd be facing federal corruption and/or fraud charges. Because they work in government, we get to call them governors, representatives, senators, etc.
More at blogprof..........