(Guest post by Greg Forster)
A new study by Josh Barro and Stuart Buck, co-sponsored by the Foundation for Educational Choice and the Manhattan Institute, finds that states have total teacher pension liabilities of ONE TRILLION DOLLARS!
These days that doesn’t sound like much, does it? We’re getting to the point where raising an alarm about ONE TRILLION DOLLARS is a little like holding the world to ransom for a measly million.
But check out some other points from the study:
- These teacher pension liabilities are systematically concealed from the public. The states claim they’re on the hook for “only” $332 billion.
- Not surprisingly, these concealed liabilities aren’t properly funded. Every pension fund is in shortfall – California alone by $100 billion.
- The funding shortfalls aren’t trivial. The five worst states (by percentage) are less than 40 percent funded. Only five plans in the whole country are 75 percent funded.
The logic is simple: extravegant teacher pension promises cost nothing to make, and the people who make the promises will mostly have moved on to other things by the time the gigantic costs come due. The due date can be held off by dishonest accounting – you don’t need to put a trillion dollars into the pension fund if you just pretend you don’t owe a trillion dollars. When the chickens come home to roost, those in power can shrug their shoulders and blame the irresponsibility of previous administrations. And where will the guilty parties be by then?
It’s the perfect crime.
Posted by Greg Forster 
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