Problems of State and City Pensions

                   

State and city pension problems are severe enough to affect ratings of government by credit agencies. The lower the ratings, the higher the cost of running state and local entities.

                       

We know that state and local pensions are underfunded. That is, there are not enough earnings to warrant the amount of pensions and benefits promised.

                       

You cannot assume you will earn 8% or more on pension investments when you can safely get only 3% or 4% from those investments. So politicians will have to learn to promise less and even reduce pensions or invite bankruptcy. The latter will perform the necessary reduction whether the pensioners like it or not, so why not have everyone come to a voluntary decision to get pension matters settled? (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)