Rooted in Reason: Nurturing the Seeds of Liberty

You Can Run but You Can’t Hide by grassroothawaii
April 13, 2011, 11:57 am
Filed under: Uncategorized | Tags: , , , ,

by Frances Nuar

What’s the easiest thing to do when a problem arises? Run away? Hide? Ignore? Pretend it just doesn’t exist? All of these childish options lack one obvious component: an actual solution to the challenge at hand. It seems like this “run away” solution has been the only one thus far for the pension crisis spreading like wildfire throughout the country.  In Hawaii alone our unfunded pension liability is a whopping $7 billion, $7,987 per capita. What brought this about? Defined benefit as opposed to defined contribution for one thing–essentially promising the world without having the capital to back that promise up. Projections on the rate of return on pension monies were placed artificially high, equating to trillions of dollars in pension debt throughout the country.

How do you solve a fiscal crisis if you don’t have the right numbers? That is the dilemma facing governors, legislators and would-be reformers around the country trying to deal with the public employee pension crisis.

Faulty accounting practices stipulated by the Government Accounting Standards Board have allowed state retirement systems to dramatically underestimate their pension deficits. In most states, the trustees of these funds have not provided the right data or even agreed to release it. This cover-up stands in the way of designing the reforms needed to fix the most serious calamity facing state and local finances.

Read the rest here.

No more hiding behind faulty numbers–time to grow up and face the pension crisis for what it is, and provide real solutions to the challenge at hand.


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