Not according to a report called: The Origins and Severity of the Public Pension Crisis.
The report is issued by CEPR, the Center For Economic and Policy Research.
It is authored by Dean Baker.
This is from the last page – The Conclusion –
The shortfalls facing most state and local pension funds have been seriously misrepresented in public debates. The major cause of these shortfalls has not been inadequate contributions by state governments, but rather the plunge in the stock market following the collapse of the housing bubble. Given the low PE ratios in the stock market, pension fund assumptions on the future rate of return on their assets are consistent with most projections of economic growth and past experience. Furthermore, when expressed relative to the size of their economies, most states are facing shortfalls that appear easily manageable.
That’s not what you’re being told? I’m so surprised. No, you’re being told that this is a first-rate economic catastrophe and we have to do some horrible things to these state employees who foolishly believed the government of the state when it said they would have pensions when they retired.
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