That's because, as CEPR points out, in most states the shortfall 'is less than 0.2 percent of projected gross state product over the next 30 years.' But it is a relatively tiny problem - one that may require small changes, but does not require radical schemes to entirely eviscerate retirement benefits. Of course, regardless of cause, a $1.38 trillion shortfall sounds like an emergency. Data prove that most of it was caused by the stock market decline that accompanied the 2008 financial collapse.

As the Center for Economic and Policy Research notes, this gap was not caused by benefit increases, as conservatives suggest. According to Pew's estimates, 'The gap between states' assets and their obligations for public sector retirement benefits (is) $1.38 trillion' over 30 years. It is designed to slash public employees' guaranteed retirement income in order to both protect states' corporate welfare and, in some cases, enrich Wall Street.Ĭonsider the math of state budgets. Engineered by billionaire former Enron trader John Arnold, championed by seemingly nonpartisan groups like the Pew Charitable Trusts and operating in states throughout America, this plot is not designed to strengthen pensions or to save taxpayer money, as its proponents claim.

This is what I've called the Plot Against Pensions in a report I recently completed for the Institute for America's Future. These claims will inevitably be used to argue that states must renege on their pension promises to retirees. More specifically, you will hear allegations that states are going bankrupt because of their pension obligations to public employees. As state legislatures prepare for their upcoming sessions, you will no doubt hear a lot about public pensions.

Back to our future by david sirota