Monday, October 15, 2012

A Federal Bailout for State Pensions?

So is this what Governor Quinn (Illinois), Governor Brown (California), and every other state sinking in unfunded public pension liabilities is hoping for? Don't count on it--hope is NOT a strategy--

Bluegrass Beacon - A Federal Bailout for State Pensions? Say It Ain’t So! | FRANKFORT, KY (10/14/12) - "Could it be that one of the reasons Kentucky’s political leaders continue to kick the commonwealth’s can of unfunded pension-liabilities down the road is because they are counting on a bailout from the federal government? . . . It must have made the hearts of Gov. Steve Beshear and his political pals controlling the House in Frankfort leap with relief when they heard fellow Dem and Illinois Gov. Pat Quinn recently run the idea of a federal bailout for his state’s $167 billion pension liability up the political flagpole. For years – particularly when economic times were good – Kentucky’s politicians padded pension and health-care benefits as a way of currying political favor, even bringing private entities into the take. The bloated system now has 1,701 different entities, along with their thousands of employees, connected to our state government’s pension teat. The story of states’ failing pension funds has been repeated nationwide. States now face a combined total of$2.5 trillion in unfunded pension costs, including Kentucky’s $34 billion liability. Giving such funding power to cowardly politicians in the first place was like giving car keys and whiskey to teenage boys. An ensuing crash is inevitable, and a bailout would only acquiesce to their disastrous behavior. . . "

Here's why the "federal bailout" won't happen:

"Why should hardworking taxpayers in Washington state – whose pension system at 95 percent funded is the nation’s healthiest – be forced to subsidize the abuse of Kentucky’s pension system by politicians in the form of overspending and benefit creep during the past several decades, which has left the commonwealth’s workers’ retirement funding level at barely 30 percent? . . ."


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