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The Trillion-Dollar Public Benefits Gap Widens

Posted on May 1, 2011
Flickr / Tattooed JJ

State governments are looking at a cumulative shortfall of at least $1.26 trillion needed to pay for pension and retirement health care services, The Pew Center on the States reported in a study published last week.

Read 24/7 Wall Street’s take on the report and a breakdown on 10 states where pensions are in jeopardy. —ARK

The Pew Center on the States:

In the midst of the Great Recession and severe investment declines, the gap between the promises states made for employees’ retirement benefits and the money they set aside to pay for them grew to at least $1.26 trillion in fiscal year 2009, resulting in a 26 percent increase in one year.

State pension plans represented slightly more than half of this shortfall, with $2.28 trillion stowed away to cover $2.94 trillion in long-term liabilities—leaving about a $660 billion gap, according to an analysis by the Pew Center on the States. Retiree health care and other benefits accounted for the remaining $604 billion, with assets totaling $31 billion to pay for $635 billion in liabilities. Pension funding shortfalls surpassed funding gaps for retiree health care and other benefits for the first time since states began reporting liabilities for the latter in fiscal year 2006.

... And states’ ability to meet their annual payments may not improve anytime soon; most government finance experts expect state tax revenues to continue recovering slowly in the years ahead.

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By grokker, May 1, 2011 at 7:03 pm Link to this comment

What we really need is to stop beating the dead horse known as electoral politics. It is broken beyond repair.Start building your own social networks and your own local economies as divorced as possible from the death economy of the U.S. And by all means, do your best to keep your money from their greedy little tax collecting hands. Good luck and godspeed.

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MarthaA's avatar

By MarthaA, May 1, 2011 at 5:46 pm Link to this comment

But there is no shortage of wars.

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By TDoff, May 1, 2011 at 1:47 pm Link to this comment

berniem, exactly! We need a greed-purging device, preferably one that sucks the guts out of our plutocrats and ‘public servants’ through their rectums.

Non-violently, of course.

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By Traditional American Democrat, May 1, 2011 at 1:37 pm Link to this comment
(Unregistered commenter)

$ 3.4 Trillion to bailout Wall Street and the financial sector.
$ 1.26 Trillion needed to make pension funds solvent.

Record Wall Street and financial sector profits, just two year after the $ 3.4 Trillion
bailout by the taxpayers.

Continued Tea Party and Republican grousing about pension funds and taxpayers
will get burned—- first, their houses decline in value, their 401 K’s decline in
value, their jobs are eliminated, their wages are frozen or have declined, school for
their kids is out of reach, etc.

The middle class doesnt seem to know when to stop shooting itself in the head.

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By berniem, May 1, 2011 at 1:23 pm Link to this comment

The crisis in the funding of the public benefits debt falls squarely at the feet of those political “leaders” and their avarious plutocratic and corporate masters whose mismanagement and malfeasance in quest of personal gain resulted in monies which should have been vouchsafed for their explicit purposes as agreed to by contract being “borrowed” and expropriated thru the use of legislative sleight-of-hand and frittered away on projects designed to benefit and promote the fortunes of the few at cost to the many! Publically funded sports venues, tax giveaways, interstate corporate extortion, selective infrastructure projects, allowing risk-free corporate degradation of communities and the environment at tax payer expense, irresponsible bailouts, etc. ad nauseum have left the well-heeled and their political co-conspirators unscathed and those who labor in good faith holding the bag full of broken promises as well as the bill for funding the next round of swindles! Our marvelous system of revolving door government assures that these self-serving leeches are always left with the cover of plausible deniability and the leeway to blame any and all but themselves for the problems at hand while formulating new plans to continue the game as previously played!

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By TDoff, May 1, 2011 at 1:22 pm Link to this comment

The results of the efforts of the neocons and the other knaves and fools of the craven cabal of ‘W’, ‘01’ thru ‘08, are coming home to roost, and will assure the continued destruction of our once-functioning society, as we knew it up until the Reagan years accelerated it’s perversion.

Unless we (we, the people, NOT we, the politicians) take some drastic actions to right our sinking ship of state, our sinking economy, our sinking world-wide reputation, our sinking moral standards, and our justly sinking self-esteem and morale.

We must have faith in our future, and invest in it, We must invest in our nation, and for that we need money, so we must ‘up’ our income. And we cannot up our income by stealing from the poor, we must ask/demand that those who can afford it pay their share.

We must also reduce our expenses, when and where we can, but NOT by violating our raison d’etre, which is, among other thing, to assure that all our citizens have the right to the pursuit of happiness, and the assurance of their life and liberty.

This will cost us, time, effort, thought, and devotion to the purpose of restoring what we had, and destroying what we have. This plutocratic travesty of a government-by-bribery must go, whatever it takes.

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