Meep’s been talking about these unfunded liabilities for some time, but many people are just beginning to get the message:
The U.S. public pension mess, with its $2 trillion to $3 trillion in unfunded liabilities, is such a volcano of gloom that it takes a potentially bigger problem to turn our eyes away from it.
Turn your attention instead to the size of the taxpayer-backed health-care obligations for public employees.
“Frankly, if you want to look at a truly scary set of unfunded liabilities, health care for retirees is a better choice than pensions,” said California Treasurer Bill Lockyer in an October speech meant to play down the pension crisis.
Not that Lockyer or his Democratic and union allies want to reduce any benefits that are at the heart of the problem. In their view, the real scourge is “pension envy” or perhaps “health-care envy” — the failure of the private sector to keep up with government-benefit levels.
States and localities make their own decisions on how to finance these health-care policies. Far more government employees than private workers receive health and dental care — and those plans cost more, require lower employee contributions and provide more comprehensive coverage.
Such generosity comes at a cost to taxpayers and municipal budgets, especially given the “promise now, pay later” approach of officials. As a recent Bloomberg News article noted, while most public pension plans are 75 percent funded, the figure for health-care plans is only 4 percent nationwide. So unlike pensions, governments are setting aside little money in advance to pay for their future obligations.
If this laughably rigged disinfographic is any indication, California is still in deep denial.
Fortunately, legislators in places like Los Angeles are on top of the really important stuff, like mandating that condoms be used in all pornography filmed there.