The Coming Pension Disaster
By Harris Sherline
June 18, 2009
Page 2 of 2
Overall, the Department of Labor estimated that underfunding of pension plans increased by almost 300 billion dollars between 2001 and 2005.
As John Morris recently noted in his blog, "The above figures only give a clue as to federal liabilities, but cities, states, county governments have trillions in surprise obligations. Officials had a fiduciary duty to estimate the costs of future benefit promises and account for them honestly but in state after state this was not done."
It's not possible to tally up the total of all unfunded or underfunded pension liabilities in the U.S., but it surely must add up to many trillions of dollars over and above the Social Security and Medicare obligations, which the Peter G. Peterson Foundation recently reported totaled around 56 trillion dollars.
As John Morris noted, "Underfunding, on this scale is the result of far more than a few
mistakes or a few bad years in the markets."
When the inevitable finally happens, the federal government will try to bail everyone out with loans and/or grants, which may work in the short term. However, in the intermediate term, it can have only one result: increased inflation. And, coupled with the excess government spending that has already occurred, the long-term consequence will surely be runaway or hyperinflation.
Historically, irresponsible fiscal management has led to financial disaster, and this time will be no exception.
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Read more of Harris Sherline's commentaries on his blog at "opinionfest.com."
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Note -- The opinions expressed in this column are those of the author and do not necessarily reflect the opinions, views, and/or philosophy of GOPUSA. >> Back -- Page 1 2
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