Milton Friedman’s Solution for Social Security Would Work for Government Pensions Too
By Lawrence J. McQuillan • Tuesday October 20, 2015 3:16 PM PDT
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Friedman’s approach to Social Security can also be applied to ending the state and local government pension crisis. The programs are very similar: Social Security and state and local public pensions have massive unfunded liabilities; and they promise a stream of benefits after retirement.
Applying Friedman’s solution, state and local governments across the country would close their defined-benefit pension plans and issue bonds to beneficiaries equal to the current expected value of the stream of benefits owed. The bonds would be due today or at retirement depending on the beneficiary’s stage of life.
As with Social Security, this approach would ensure that people receive what they have been promised. It would force governments to acknowledge the true extent of the unfunded pension liabilities and establish a specific financing plan (something they refuse to do today). And it would permanently close these politically mismanaged defined-benefit plans.
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The current 18T+ national debt and the guesstimated 200T+ in unfunded liabilities is what our posterity will have to deal with.
“When there’s an elephant in the room introduce him!” From his “Last Lecture” by Randy Pausch (RIP 2007 at age 47)
Just pretending it’s an “off balance sheet” entry is reminiscent of Enron.
Take the medicine now when it’s just disgusting; rather than dies a horrible death from a self0inlicted wound.
Take off the blinders and wake the flock up.
“We, The Sheeple” are heading for a slaughter!
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