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Townhall
Government Debt
on the Road to Ruin
Steve Chapman
Feb 08, 2015
Americans are addicted to living beyond their means, at least when it
comes to the functions of government. That's why the federal debt
tripled over the past decade and under President Barack Obama's budget
plan would keep growing indefinitely. Why not? If you don't have to pay
for all you get, you're likely to take more than you need. The problem
is hardly confined to Washington. State and local governments can't get
away with endless budget deficits because of restrictions on their
authority to borrow money. But if you think that keeps them from piling
up obligations on future taxpayers, you underestimate their ingenuity.
A common method is setting up generous pensions for government
employees while failing to put away the money needed each year to pay
the benefits that will inexorably come due. The evidence of where that
approach leads is on grim display in Illinois.
Bruce Rauner, the new Republican governor, gave a State of the State
address Wednesday that mysteriously failed to address the state's huge
public employee pension debt. It's like a biography of George Custer
that omits Little Bighorn.
_The chance of success is about as small as Custer's. Illinois has a
bigger unfunded obligation than any state in the country, exceeding
$100 billion and, by some estimates, as high as $250 billion. It has
attained that distinction by failures like skipping contributions and
assuming the economic good times would never end.
"The deadly combination of nearly 30 years of systematic state
underfunding of its employer contributions to the pension systems,
followed by the cataclysmic decline in asset values caused by the
national meltdown in financial markets over the last year, combined to
create an all-time high in the state's unfunded pension liability,"
said a 2009 governor's task force. These payments now swallow up a
quarter of general-fund revenue, at the expense of other programs...
Read the rest of the article at Townhall
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