When adjusted using a more appropriate discount rate, however, states’ unfunded obligations were 22 percent of U.S. GDP. All but 10 states and the District of Columbia have total adjusted unfunded liabilities above 15 percent of their state GDP, and four states — Alaska, Hawaii, New Jersey and Ohio — have adjusted unfunded liabilities above 35 percent of their state GDP.
Have a nice day!
Sep 22 2010
We know Leonard Read's famous "I, Pencil" essay, where he says that nobody knows how to make a pencil. Somehow, the market arranges it so that wood, graphite, dyes, cutting tools, and other inputs come together to make a pencil. It feels very good to say, "Nobody knows how to make a pencil." Now, say, "Nobody knows ...
Sep 22 2010
Rod Long replies to my "Why I Am Not a Left-Libertarian":Bryan's response focuses on the ways in which free markets would solve the problems I point to if they were really problems. But the whole point of my position is that we don't have a free market! Left-libertarians have pointed out in detail the ways in which the...
Sep 22 2010
A NCPA study finds When adjusted using a more appropriate discount rate, however, states' unfunded obligations were 22 percent of U.S. GDP. All but 10 states and the District of Columbia have total adjusted unfunded liabilities above 15 percent of their state GDP, and four states -- Alaska, Hawaii, New Jersey and Ohio...
READER COMMENTS
David R. Henderson
Sep 22 2010 at 2:09pm
Stock vs. flow? Relevant comparison is between annualized obligation and GDP (flow and flow). Still scary, but less scary.
Dan Hill
Sep 22 2010 at 4:16pm
Wow, it takes real talent for the governing class of Alaska to create massive unfunded liabilities – this is a state which has so much oil money it sends residents a check every year and gets way more back from Washington than it sends in taxes.
John Goodman
Sep 22 2010 at 5:10pm
Get ready for lots of defaults. Also get ready for all kinds of Congressional proposals to bail these plans out. It will give a whole new meaning to the term “moral hazard.”
tjames
Sep 22 2010 at 10:54pm
Hawaii, New Jersey, and Ohio are among states with the higest tax burdens (local and state), according to http://www.taxfoundation.org data. This certainly contradicts those who would have us believe that the solution to the Federal Goverment’s unfunded liabilities is higher taxes. Higher taxes might help or hurt, but an overall climate of living within your means – whatever those means – is really what is needed.
Alaska is some sort of outlier, with the lowest tax burden. They might have room to manuever on taxes, plus they could just divert the oil money to these liabilities.
Jack Dean
Sep 23 2010 at 4:24pm
You can follow the rapidly accelerating public pension crisis daily on PensionTsunami.com.
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