The Other Pension Crisis
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Another update to my previous post and earlier update on how the Pension Benefit Guaranty Corporation generally, and the airlines in particular, are foreshadowing the looming Social Security crisis:
The mechanics, economics and demographics of the Social Security crisis are essentially identical to the PBGC crisis. In essence, too much was promised and too little put away, with a mountain of paper-pushing sleight-of-hand in the meantime to give the illusion of solidity. It's unfortunate that some are trying to downplay the latter as an aberration triggered by two dysfunctional industries (airlines and steel). That's simply not true -- the flaws in the schemes are structural and not exogenous. The PBGC crisis is a perfect opportunity to analyze, experiment and educate about the much larger crisis looming on the horizon.
Meanwhile, here are some of my other major Social Security posts:
The Social Security Meta-Crisis
Social Security:AvP GvK
Getting Kerry-ed Away on Social Security
Social Security: Read It and Weep
Social Security: What's in the "Lockbox"?
The U.S. government agency that insures corporate pensions will run out of money in 2020 if current financial conditions persist, imperiling the checks of millions of retirees, a new independent study shows.There's one for your doublespeak dictionary -- "cash exhaustion."
...[W]ithout a taxpayer-funded government bailout, "retirees would suffer strongly from cash exhaustion'' at the agency, which pays benefits to some 1 million Americans and insures private pensions of about 43 million more. If it functioned as a private insurer, the pension agency would already be deemed "insolvent."
...
"The present level of premiums would not cover expenses, much less promised pension payments, once invested assets were exhausted,'' it said.
Concern about the pension agency comes as many Americans worry a bout the long-term health of Social Security, the government's vast mandatory savings program for retirees. Social Security trustees earlier this year estimated the program's trust fund assets would likely be exhausted in 2042.
The mechanics, economics and demographics of the Social Security crisis are essentially identical to the PBGC crisis. In essence, too much was promised and too little put away, with a mountain of paper-pushing sleight-of-hand in the meantime to give the illusion of solidity. It's unfortunate that some are trying to downplay the latter as an aberration triggered by two dysfunctional industries (airlines and steel). That's simply not true -- the flaws in the schemes are structural and not exogenous. The PBGC crisis is a perfect opportunity to analyze, experiment and educate about the much larger crisis looming on the horizon.
Meanwhile, here are some of my other major Social Security posts:
The Social Security Meta-Crisis
Social Security:
Getting Kerry-ed Away on Social Security
Social Security: Read It and Weep
Social Security: What's in the "Lockbox"?
Posted by KipEsquire on
14 September 2004
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