Tuesday, May 25, 2010

The Worst Proposed Solution To Pension Problems

Last week I mentioned a NY Times article about problems with underfunded public pensions.  The Times did a follow up article/discussion with a variety of "experts" proposing ways to fix this difficult problem.  There is no magic bullet, but it's still terrifying to hear Alicia Munnell, "a former member of the Council of Economic Advisors,"  suggest:

"The only real option is to wait for the market and the economy to recover."

Gulp. * Shaking my head slowly with my lips pursed *  She didn't really say that, did she?  I'm not going to even do it... Nope... You expect me to, but I'm not going to...  OK - I can't resist:




Ken said...


The title you chose for this particular post is incorrect.

The worst proposed solution to the pension problem has yet to come (but it is on its way) and that involves you and I bailing them out.

James said...

The US economy is Madoff.

Chuck said...

When I started reading the "worst solution" I would have bet my life you were headed here:

Kid Dynamite said...

ken, chuck - nice work - you guys both picked up on a story that's potentially even worse. i couldn't respond right away, because i was busy cleaning vomit off my keyboard ;-)

But What do I Know? said...

Actually, the real solution to the public pension problem is to do what the private sector did--turn them into cash balance plans and stop making new contributions. . .

Kid Dynamite said...

yes BWDIK - for sure, going forward.. that doesn't help the soon-to-be-retiring-and-expecting-otherwise group of workers

Mark said...

Well said, Kid, well said!!! I knew you would not be able to resist.

This pension deal reminds me of a quote in a book I read about the building of the Panama Canal. There was a big argument, when the US took over the construction, of whether they would build a sea level or a lock canal. The guy in charge finally said "There is not enough money in the world to build a sea level canal"

Well guess what? There ain't enough money in the world to pay off these pension obligations. Period - end of story.