It’s bad enough that we’ve been talking about a $14 trillion national debt. As Kevin D. Williamson notes in a cover story for the latest National Review, the real national debt figure is closer to $130 trillion.
Most of that larger figure encompasses the unfunded liabilities for Social Security and Medicare, but there’s also a significant chunk — roughly $3 trillion — tied to state pension fund liabilities:
[T]he states, in their capacity as the laboratories of democracy, have been running a mad-scientist experiment in their pension funds, making hug promises but skipping the part where they sock away the money to pay for them. Every year, the pension funds’ actuaries calculate how much money must be saved and invested that year to fund future benefits, and every year the fund managers ignore them. In 2009, for instance, the New Jersey public-school teachers’ pension system invested just 6 percent of the amount of money its actuaries calculated was needed. And New Jersey is hardly alone in this. With a handful of exceptions, practically every state’s pension fund is poised to run out of money in the coming decades.
As we’ve noted in this forum, North Carolina’s position is relatively good — with the emphasis on “relatively.” But the Tar Heel State is not free from worry about its pension fund, a situation N.C. State professor Robert Clark discussed during a March presentation to the John Locke Foundation’s Shaftesbury Society.