01/27/11 Funding Fiasco
A trillion dollars. That amount has been tossed around way too casually in the past couple of years.
Trillion dollar bank bailout. Trillion dollar stimulus package. Trillions for ObamaCare. It gets worse.
The 50 states have an unfunded liability for state employee pension programs of more than one trillion dollars. ThatÃ¢Â€Â™s nearly a $9,000 debt held by every American household. In general, there are several reasons for this:
— Bloated government with too many employees.
— Politicians promising exorbitant pensions.
— State pension contributions are spent elsewhere.
— Allowing workers to retire at an early age.
— State workers not contributing to their own pensions.
— Calculating overtime, bonuses, car and housing allowances to determine retired pay.
Some states give pensions to employees with as little as five years of service. Just as shocking is some government workers earn more in pensions than in salaries. Florida is the rare exception as its pension program is fully funded. Nearly every other state ranges from bad to downright atrocious.
Illinois, Iowa, Maryland, Oklahoma, South Carolina, Texas and West Virginia are $135 billion in the hole. Nearly $63 billion in unfunded liabilities is held just by Illinois.
No state has taken meaningful steps to fix the problem. Sooner or later the bill will come due. And you’re going to have to pay it — out of your salaries and pensions that are not as generous as what many state workers receive.