[sphinx]

The solution is simple and, in the broad scheme of things, relatively painless. Just write down future benefits to whatever the plan can actually pay on an actuarily sound basis. If public employees in the bankrupt states take a 25-50 percent haircut, they will still have richer pensions than most people in the private sector. It's not the end of the world if the gubmint class rejoins America.

Follow up immediately with the demand that all pensions, going forward, must be fully funded and privatized, subject to prudent diversification rules.

[cgbg]

The other issue with state pension systems is that the asset managers are given sweetheart deals with kickbacks to the state politicians.

Everybody rips off the funds on the front and back end.

[volunbeer]

The whole system is corrupted. The same people who mismanaged the housing bubble causing the crash were the same ones bailed out and paid for over a decade by the Fed “to save the economy”. The Fed is now having to fight inflation so the spigot of free money that has propped up the “investments” by pensions is now suffering on Wall Street.

Yes, shaving the pensions would be a logical place to start but that will come with political pain. Just as I wrote above, the congressional delegations from these states are very large and as we just saw with the latest spending spree from congress they will be able to divert national money to these pensions.

The end is obvious. As bad as the “pension shortfalls” are in some states it is small when compared to our unfunded entitlement promises as a nation.

[Rusty0604]

Not so easy with the Public Employee Unions. They own the democrat politicians, so they will raise taxes and/or get a bailout from the federal government.