More from Joshua D. Rauh
State and local governments all around the country have failed to set aside enough money to pay for the pensions they have promised to workers in the public sector. They’re also making unrealistic assumptions about their future investment returns, further risking their budgets and the ability to pay for promised pension benefits. Confronting the true cost of future pension payments would force state and local governments to save more now and prevent budget problems in the future.
Pension promises are increasingly consuming state and local budgets. In order to fund pensions, state and local governments are making risky investments in the hopes that high returns will pay future benefits. However, when the investments do not do well, taxpayers have to pick up the tab.
Click here to play the game of Pension Pursuit and see how state and local governments are underfunding pension obligations by trillions of dollars.
This five-part animated video series is based on Hoover Institution Senior Fellow Josh Rauh’s research on the vast underestimation of public pension liabilities and gives insight into the hidden debts the next generation will face.