From The Hill
"The Supercommittee has come and gone without reaching an agreement on reducing our nation’s debt. Most of the post-mortems focused on who was to blame for the breakdown. If we had been able to slash the projected deficit by trillions of dollars, according to conventional analysis, Washington might have been able to get our debt under control and the United States would be on the path back to a firm fiscal footing.
"But the dirty little secret is that it may not have been sufficient to avoid a coming fiscal catastrophe. The thing that pushes the United States over the tipping point just might be the exploding state pension crisis."
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The state and municipal pension crisis probably is the biggest hidden unfunded liability our nation faces, but it is not the only one. However that alone certainly could be enough to tip the us into eternal debt. Some have passed and most approach a fiscal event horizon even if there never is another market downturn and U.S. economic growth sets records over the next three decades. Municipal and state workers provide real essential services, and those levels of government impose the most regressive taxes of all. So paying retirement benefits and servicing debt through service cuts and tax hikes MUST cause economic disruption. No escape. No way out.
ReplyDeletehttp://www.statebudgetsolutions.org/blog/detail/latest-municipal-state-pension-data-show-crash-continues