GrumpyCatFace wrote:What if I told you that this had almost nothing to do with tax policy?
Kansas went the opposite direction, and failed miserably as well.
Well, pretty much the "pension crisis", in pretty much any state you can think of, even those that aren't considered in "crisis" yet, are all failing from the Fed's ZIRP policy (or near zero for a decade+) coupled with the "assumption" (a poor one) of 7+% returns on what should've been "AAA safe" investments - which became hedge funds, risky CDOs, junk bonds, stocks, etc, in a scramble for returns to make their poor assumptions.
Add to that the fact that whenever things were going good and the returns were over their "assumed return" the states under-contributed thinking "it was going great", stealing the money for other things... And then in down years they didn't have the budget either so were lucky if they even made the full contribution...
The whole thing is based on an "average" return... But you need to keep contributing at the same rate, even in "boom times", because invariably there will be "bust times" when you won't make that average. Unfortunately governments are like lottery winners, they get a windfall and instead of investing it they go off like punch drunk sailors spending on shit, making poor decisions, etc... Then realize they're broke and start losing the 24,000 sq ft McMansion they "bought" (with a huge mortgage), having the Ferrari and two BMWs reposessed along with the jet-skis, yacht, etc - when instead they probably should've kept their 2000sq ft home, paid it off, bought a new SUV, and invested the rest (which could've earned them enough return yearly to live comfortably).
The fact that they start desperately looking for new ways to get money (bleeding taxpayers) is just a side effect of piss poor decision making for decades now.
"People don't like to be meddled with. We tell them what to do, what to think, don't run, don't walk. We're in their homes and in their heads and we haven't the right. We're meddlesome."
