And also, you're whitewashing the role of public employees. Those "corrupt politicians" are Democrats who keep getting elected with the support of teachers', police, etc., unions. Chicago's pension holidays, for example, resulted in that money going to CPS directly, to support higher salaries and the "pension pickup" (where the school district covered most of teachers' required pension contributions).
Additionally, I agree there were failures at many levels regarding the promises made to the people of Illinois.
Honestly, I don't completely absolve the citizens of Illinois ( Of which I am one ). As the article states, these pension numbers NEVER added up and for some reason people kept buying into the "free golden ponies" narrative.
It would be interesting if ComputerGuru's post was "politicians promised mathematically impossible pensions" instead of "undeserved pensions".
Maybe the replies would have focused on that aspect. The issue is that the unrealistic pensions were promised by politicians instead of competent actuaries. With promises like automatic 3% annual pension increases, they've created an exploding liability that even Norway and Sweden couldn't fulfill. Illinois created promises that exceeded the productive capacity of its citizens' tax base.
And how did those corrupt politicians get into office and stay in office?
I don't KNOW if it was corrupt politicians. Better to say: "The money was badly mishandled"
Yes. In Illinois, that portion is supposed to cover on the order of 10% of their pension, and taxes are (presumably) supposed to cover the other 90%. This figure is including market returns from initial contributions.
Bad mishandling may have made the situation worse, but, even if it had been handled perfectly, it still would have been unworkable.
Doesn't matter if the failure is intentional, luck, whatever.
http://www.sacbee.com/news/politics-government/the-state-wor...
That's hardly unique. It's the expected result when you let the government hold on to money for the future, rather than a bank.
Banks are bound by laws designed to prevent these kind of problems. Governments are not.
The thing is: part of a person's paycheck goes into a fund that is supposed to support their pension. So they're not really passing the buck to the next generation, the money they contribute is supposed to be there for them when they retire.
The PROBLEM is that corrupt politicians in the 90s used the pension money and basically lost all of it. So we're in a situation where the money that should have been sitting around for people with pensions to draw from is GONE, and all we can do is scoop and throw until a miracle happens.
edit: I shouldn't editorialize and say "corrupt politicians", please mentally replace that phrase with "The money was badly mishandled"