News. There’s a $1 trillion dollar gap between what states have promised their workers in pension benefits and what they’ve actually set aside to pay those bills.
That’s the finding of a newly released report by the Pew Center on the States. States have set aside only $2.35 trillion of the $3.35 trillion they’ve promised their current and retired workers in pension, healthcare, and other retirement benefits.
According to the report, the gap is due to states’ own policy choices and lack of discipline, including:
– failing to make annual payments for pension systems at the levels recommended by their own actuaries;
– expanding benefits and offering cost-of-living increases without fully considering their long-term price tag or determining how to pay for them;
– providing retiree healthcare without adequately funding it.
My point. It is the same old story. People ask. Politicians give to gain power and wealth. Politicians do not know how to create the infrastructures to produce the money they have promised. The house of cards collapses.
Bottom line? The markets always win. They always have a way of showing what went wrong. Will we have ever learn? No!
George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
Ranked Top Market Timer in 2009 and 2010 by Timer Digest
To find out more about my in depth views of the markets and my strategy just visit our website https://www.peterdag.com/ where you can review The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific money management needs.
I will be happy to speak to your investment group on how the business cycle impacts investment strategies and the choice of asset classes.
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