States Warned of $2 Trillion Pensions Shortfall

Financial Times
Jan. 18, 2011

Here's how I explain the economic situation the US is in to friends and acquaintances:

The US is a drug addict with no money and a horrible addiction to spending other people's money. The US government for the last few decades went from being on top of the world with tons of money to totally broke and now it has to hit China up for cash just to get a fix.

But like anyone who lends money to a drug addict, eventually you have to realize you're not going to get it back and it's not a wise use of your money.

When the world finally cuts the government off, you're going to see one hell of a crash and a violent drug addict on a rampage. - ChrisUS public pensions face a shortfall of $2,500 billion that will force state and local governments to sell assets and make deep cuts to services, according to the former chairman of New Jersey’s pension fund. [...]

Chris Christie, the Republican governor of New Jersey, said in his state of the state speech last week that, without reform, the unfunded liability of the state’s pension system would rise from $54 billion now to $183 billion within 30 years.

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