The public pension crisis


If you use the most recent data from government accounting standards, the collective shortfall for state and local governments nationwide appears to be about $1 trillion. If you use corporate accounting standards to estimate the value of those public pensions, however, you come up with a shortfall two and a half times as large — about $2.5 trillion. Employing a third approach that assumes, as economists generally do, that even corporate accounting standards in this area are too lenient, public pension underfunding is about $3.5 trillion, or one-quarter of gross domestic product.To make matters worse for state budgets, hidden underfunding of public employees’ health retirement costs is even greater than that of their pensions.


Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s

%d bloggers like this: