Andrew Biggs provides a reminder that governments are the main source of concern for future retirees’ incomes.
while household retirement savings are growing, government retirement plans—Social Security, government employee pensions and the federal Pension Benefit Guaranty Corp.—are underfunded by up to $26 trillion. The World Economic Forum estimates that 85% of the retirement savings gap in the U.S. is owing to government underfunding, not workers’ failing to save. The same is true world-wide, and for the same reason: political pressures to promise benefits without levying the taxes to pay for them.
It should go without saying that the same pressures apply to the health benefits and pensions of state employees.
