Wednesday, December 19, 2007

Reality Check: Pensions

France's continuing struggle to keep its pension system solvent rarely makes the news in the United States, and when it does, it is usually to elicit a word of condescension or schadenfreude. If only those French spent less time in cafés and more time in the salt mines, freedom-fry-eating Americans are likely to gloat, they wouldn't be running constantly in the red. So it is good to be reminded that while Americans may spend more hours au charbon, they don't always take care of business as well as they think they do. The federalization (read: Balkanization) of our retirement funding problems keeps their magnitude well hidden. This morning's Times reveals that state pension funds across the US have promised to pay over $2.7 trillion over the next 30 years, and only a fraction of this debt is funded.

1 comment:

John K said...

The pension system in the US is a disaster, both for private companies and for state and local governments, but then the reality is that other than Social Security, which the right wants to privatize and thus destroy, and which many leading Democrats appear not to fully understand, the financial aspects of retirement in the US are pretty dicey. If you factor in health care, a major issue for millions of retirees, the picture grows pretty grave. I keep hoping--perhaps without foundation--that one of the top Democratic candidates will talk about these issues, but thus far they are saying little, in part I think because they are so insulated from the problems that so many are facing. If you are a millionaire or multimillionaire based on something other than home equity, I would imagine it's hard to grasp how precarious the finances of so many US seniors really are.