A humungous national debt. Growing state federal government budget deficits. Social Security and Medicare, running out of funds. All very frightening. But look out: The costs of public employee pensions are walloping city and state budgets — pushing a number of California cities into bankruptcy.
Though the stock market tumble hasnt helped, the basic problem lies squarely with politicians. They like to increase future benefits to gain political support from public employee unions; they then underfund their lavish promises, the better to hide the fiscal reality from todays taxpayers.
Politicians keep running from the problem, but a website called PensionTsunami.com wont let them hide. The site, run by Californian Jack Dean, offers a steady stream of horror stories:
- A new report calls the Kansas Public Employee Retirement System bankrupt.
- A Rye, New York, city manager makes $198,000 a year while still collecting a pension for the same job.
- The chief actuary for the California Public Employees Retirement System admits that current pension costs are unsustainable.
All across the country, politicians consistently fail to act. Californians are lucky: They have the voter initiative. The California Foundation for Fiscal Responsibility, a group whose board includes Mr. Dean, is planning a statewide initiative to prevent their approaching tsunami.
This is Common Sense. Im Paul Jacob.