Wednesday, June 22, 2011

Pensions Are A Major Problem Facing Governments At All Levels

According to an article from Reuters, the state of New York will need to raise over $1300 per resident for the next 30 years to fully fund their pension systems. In New Jersey it's $2475! But this issue is one that is facing nearly every state and local government in the country.

The recent economic downturn has cut severely into tax revenues, and with these governments having created budgets with expectations of continued economic expansion, they find themselves overstretched and unable to meet their obligations without severely cutting services.

It seems as if there are major confrontations developing across the country, with unions and their backers on one side, and those who feel that state employees have been coddled and want to cut taxes and spending on the other. I think the fight that's been taking place in Wisconsin is only the first of many such battles we will be seeing in the near future.

Regardless of how it all turns out, it is very apparent that pensions and other benefits are very big expenditures for governments at every level to account for and one which a solution seems difficult to come by.

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