My colleague at The Heartland Institute, Eli Lehrer wrote a rather controversial op-ed for the Weekly Standard recently arguing that “Pensions Aren’t the Problem.” Eli’s piece makes some good points in regards to the public pension debate and has, if nothing else, brought more attention to this important issue. The biggest flaw in his argument is that he fails to acknowledge that if states have any chance of fundamentally fixing their state’s budgets long term, then they must address their pension systems in the short term.
Ignoring this rapidly growing and unsustainable taxpayer liability, and refusing to restructure pensions while states are struggling to balance their budgets, would be a missed opportunity for long-term fiscal health. Eli’s pragmatic approach to solving state budget deficits may seem like good politics and might encourage healthy debate, but in the end it is bad for taxpayers. The facts are clear, this is conservatively a trillion-dollar problem facing states, and these unfunded pension liabilities will continue to worsen as budget deficits grow and legislators fail to restrain current and future expenditures.
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