The unsustainable public pension problem is exemplified in California, where the state must cough up money to keep the defined-benefit program paying out to keep its promises. Voting for increases in public pension benefits is popular, since it’s an expensive debt that won’t come due for a while. A while is starting to be now in California: backfilling pensions is pulling $3 billion out of the general fund each year. Costs for the pensions have grown 2,000% in the past decade, while state revenues grew by just 24%. Over at Reason, Matt Welch points out a coming conflict: As ever, a thick chunk of the California commentariat refuses to grapple with the zero-sum reality of pension spending crowding out favored social programs. This will play out all over the country, with an astonishing “solution”: let the pension obligations continue to grow exponentially, and raise taxes to prevent cuts to social programs. It’s not a sound strategy and one that just postpones the day of reckoning.
