Krauthammer: No Bailouts For State Pension Funds

Just about every public worker pension plan in the nation is underwater, and this is due to the way these pension plans are structured. They are based a guaranteed benefits model which is essentially a ponzi scheme. In order to keep paying the guaranteed benefits to the retirees you have to keep expanding the worker pool. And, unfortunately, not even the government is able to keep growing its work force fast enough to keep the pension funds funded.

So something will need to give, and given that most states in the union are also financially insolvent there is going to be some heavy pressure on the federal government to bail these pension funds out. Charles Krauthammer says it shouldn’t happen, and he’s right:

First of all, the federal government is bankrupt. We’re out of money.

Second, bailing out the states is only going to perpetuate the problem. Rather than reforming these pension plans to sustainable models the states can actually afford to pay for, bailouts would only maintain the status quo.

Rob Port is the editor of SayAnythingBlog.com. In 2011 he was a finalist for the Watch Dog of the Year from the Sam Adams Alliance and winner of the Americans For Prosperity Award for Online Excellence. In 2013 the Washington Post named SAB one of the nation's top state-based political blogs, and named Rob one of the state's best political reporters. He writes a weekly column for several North Dakota newspapers, and also serves as a policy fellow for the North Dakota Policy Council.

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  • http://nofreelunch.areavoices.com/ Kevin Flanagan

    Wow, who could have predicted the gravy train for slackers on the public payroll would ever derail?

  • http://flamemeister.com flamemeister

    Some redemption for CK, even though it’s practically a forced call.

    • http://sayanythingblog.com Mountainmouth

      He is still on probation after his heath care position. Every gets a chance for redemption.

      • dalaibama

        I gave up on him….His occasional ‘correct’ statements do not make up for his blueblood Old boy GOP mutterings.

        Even a blind ol’ sow finds an acorn once in awhile.

  • Neiman

    I agree the pension funds are killing states like California, self-inflicted wounds by liberals that cannot stand up to the unions and stay in office; what I do not know is what is the fallout if states have to declare bankruptcy? Absent that, how do they force the all-powerful unions to renegotiate these funds?

  • LastBestHope

    CK’s point was if you bail out even one state, you then must bail out them all. Why should frugal states pay for the fiscal insanity of CA, IL, MA, NY, NJ ?

    They shouldn’t…. and this will be a clear line in the sand to test the GOP’s resolve in getting our nation’s financial house in order.

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