The Pension Bomb

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State and local governments face a $5 trillion dollar unfunded pension liability. In other words, politicians promised workers $5 trillion in retirement benefits, but government doesn’t have the money. --------- Subscribe to my YouTube channel: http://youtube.com/johnstossel Like me on Facebook: https://www.facebook.com/JohnStossel/ Follow me on Twitter: https://twitter.com/johnstossel --------- John Stossel asks, how this could happen? City Journal Contributing Editor Daniel DiSalvo tells him, because “nobody was paying attention." Politicians keep promising government workers better pension benefits, but don’t set aside the money to pay for them. DiSalvo says that’s because “both parties, Democrats and Republicans have incentives to short the pension fund… For Democrats, if we cannot put as much in, we can free up more money for greater public spending on public programs. If we're Republicans, we probably want to say cut taxes." City Journal Senior Editor Steve Malanga adds, "5 years from now, 10 years from now, they're gonna have a problem. But 10 years from now somebody else is in office.” So someone will have to pay the bill. When Stossel asks Malanga for a solution, he answers “reduce the level of benefits ... put more of the contributions towards paying off the debt, and go to individual accounts,” like 401k's, what most people in the private sector have. So far, neither politicians nor the unions are willing to accept this. Stossel warns: one day, no matter what the promise, we simply won’t be able to keep it.

Comments

jon wcs : My city was $500 million short on the Firefighters pension, the city put out a 10% restaurant tax to start. Stop voting Democrat

Mordalo : Typical union goon. No clue of reality. If the private sector did this, we would be in jail.

Kraig : Any pension backed by tax payer money is criminal and corrupt, and it should be illegal.

Justin Peanuts : Notice how the union leader did not reply to the question. The problem with Western society is it is full of dis-honest people like the union guy.

Armand Rodriguez : The unions thought they were using the politicians to screw the tax payers and it turns out those politicians screwed both the unions and the tax payers. In the end only the politicians got everything they wanted.

Mark Marola : How did this happen???? Not paying attention????? What hog wash. They knew exactly what they were doing.

franco lopresto : I can't help but to despise union thugs....like the a-holes in this video.

YorickReturns : *Just assume that you're going to get nothing from the government.*

Roger didit : The teachers have been a CATASTROPHE in this country. Test scores are at an all time low. The kids are dumber than ever! Do you know that the government wanted teachers to undergo a BASIC competency exam. Just show that if you teach history, you know THE BASICS. The teacher Union REFUSED and fought it. The college professors are LITERALLY COMMUNISTS AND SOCIALISTS. No kidding. They do not hire or tolerate conservatives or right leaning thinkers. Starve them. Give them nothing. Don't believe it?? https://canadafreepress.com/article/how-socialist-school-teachers-brainwashed-the-snowflake-generation

Shatner Williams : What's crazy is the entitled spoiled cry baby pensioners do have a point in that 1) they were promised this pension and 2) as long as tax money is being used for things that are not promised like welfare and other social services, ESPECIALLY going to illegals, they have the right to say pensions should be funded first. This is why Democracy and Socialism DOES NOT WORK. There is no fixing it. He who holds the biggest political stick will win. What's fair is not a consideration, if things ultimately collapse completely in the long run is not a consideration.

BeardedVeteran : Social Security is next. Bankrupt by 2030.

Thomas Halecky : 2024 will be an interesting year... that is the year when Social Security claims are expected to spike based on age demographics.

Winston Smith : This is the main reason why there should be no public unions allowed - the unions are NOT negotiating with the taxpayers, they are "negotiating" with politicians by promising politicians their vote if the politicians give them what they want, the politicians always promising far more than current or future tax receipts will support just as they always do with virtually every benefit they promise to anyone, not just pensions.

Kirat Singh : first mistake:trusting the government second mistake: don't have weapon

JD K : Remember that government is always the problem, never the solution

Proman : Government screws up everything it touches. Anyone stupid enough to believe and depend on Government gets what they get. Every city, county, or state that tries to solve these problems the way Detroit did, is going to end up like Detroit did. Raise taxes and people and businesses move out and at some point revenue begins to fall faster than you can raise taxes to compensate. All the dirty politicians responsible will just retire to luxury when they see the end coming. Chicago's Rahm Emanuel isn't running for reelection because he knows the slide is greased and he doesn't want to be around to deal with the mess he and his predecessors made. Chicago has passed the point of no return, and when the head rat jumps off the ship, you know the end is near.

carterbroadway39 : NONE OF US PRIVATE WORKERS GET RETIREMENT...AND MY TAXES PAY FOR THEIR RETIREMENT. WHY DO THEY HAVE TO GET WHAT I DONT GET WHEN I PAY FOR THEM?

Yoshifan9511 : NPC's chanting at the beginning of the video.

Matthew Cioffi : "How do unions have disproportionate political power if unions are 10% of the population?" How do the rich have disproportionate political power if they are 1% of the population?

Dan Lyons : That union rep is so angry. You can see the REEEE Rage in his head LOL.

Arcosian Cosine : I assume there will be no pensions or social security by the time I retire. In my experience government needs will take precedence over you and I don't have much faith in people to do what they say anyway let alone thrust that 40 years from now they will keep their word. The government isn't responsible with their money so why should I trust them with mine? Therefore, I'm planning my own retirement.

Jeremy Holovacs : 401(k)s are just this side of worthless. I have an idea: hold those lawmakers who refuse to fulfill their obligations to the law and the citizens criminally accountable. I'll bet that money would turn up if you could go to jail for shirking on your responsibilities.

Jimmy Cain : Screw the unions and their members.

Xx_Minecraft Gang_xX : You're the only funny o man i have ever seen before but I'm still a bit tired but still a little too much of a problem is this normal and i don't want you any better if i don't want to buy a pack or a ticket for 6 AM a bit too much for my own content even though i'm still in my class now but I'm not going anywhere else to be part with the same thing as a new one in a couple weeks of time and i don't want you any more than that is what i'm going through an hour of work and i'm still a bit too busy and my mom was still a little bit confused about it online and i don't want to buy a new strain of the time i was here for the first thing to be relatable i would have thought of the joke but the other one is a serious question but i'm still in the same thing with my sister in the time out and i don't want to buy a pack or a ticket for a couple weeks and i'm not sure i would follow the same people as my own death but if you don't have any idea why i'm still here and you know what i'm saying to him now that you have no choice and not be

SHUR SHOT : They were hired under the contract, spent years working for it, they earned it. Pay them.

Ted Schoenling : And this is why government shouldn't be in charge of anything.... much less schools. Teachers, wake up, working for the government is only hurting you... you really do want to privatize education, it is in your best interest.

Mark Marola : This is a classic case of purposeful diversion of money

J Mack : In some cases when the pensions get so short, and people get tired of paying the high taxes and move away to a more tax friendly place, those governmental agencies will have to file bankruptcy. There is not enough money in the world to pay for TRILLIONS of plans that are underfunded.

sergio gonzalez : Individuals should manage their finances not the government. It is the individual responsavility!!!!!!!!

Scott Anderson : Basic English is considered organized Mafia crimes got to take out the mafia head boss before fixed the problem to find the answer of solving the problem the union mob boss doesn't have the money he steals it from others by promise empty promises the under are the only ones that can can end it

Bob jones : Yup can’t wait till it hits California

William Price : All you union fools are going to get the Eastern Airline tretament; push and push, things go belly up and, YOU END UP WITH NOTHING! HA,HA,HA LOL.

Backmarker Vali : LOl at the union guy: "-So, you don't like democracy!" Unions...Democracy ...choose one. All pensions should be private. including for the state employees.

Audi Deus : Blah Blah Blah, paper money backed by nothing is worth... NOTHING! Time to oust the banking system.

Smoothbluehero : The idea of a pension is socialist and stupid. No wonder it doesn't work. When you rely on the government, you're screwing yourself over.

Roberto 123 Pl : John is best journalists hands down

RaoulDuke6666 : A great lesson for everyone. Don't get involved in ponzi schemes.

bjkarana : Pensions work if they're funded, but there's too much incentive to abuse the funds, which we have seen time and time again, but the public sector pensions are particularly egregious because they can reach into your pocket as a taxpayer decades after the promises were made. At least if a private business's pension goes bust, they can't just reach into your wallet to fix past bad behavior unless you're a shareholder.

Mark Jacobs : You Never Hear about The CEO's of Corporations taking a Pay Cut But They Cut what The workers get & Then Give Themselves Bonuses plus CEO'S have a Golden Parachute where it is in their Contract that if they Get Fired Before a Certain Date , They get a Lump some of Money which is Millions !

Climate C. Heretic : The ONLY golden calf pensions are in POLITICIAN BENEFITS.

Francis O'Connor : Three Stossel videos in one week? Christmas came early this year!

sickb2200 : Join the rest of us who have been forced to put their own retirement (401K) money aside and play the stock market without any training. Pensions? They're history now. Gone. It's all up to you, the employee now and you take all the risk.

Raghav M : *So you don't like democracy* The nerve to say that.

tiananman : if the government promises you something and you believe them I have to wonder about your intelligence

David Therwhanger : So public (government) unions are like the old roman praetorian guards, selling the seat of power to the highest bidder. I've thought the U.S. was like the Roman Empire for years. And we are going down just like them as well.

Eric S : Perfect example on why not to move to socialism ! The government screws so much up.

SoHo : Sounds like a Pyramid scheme

idekmusic : My investment account will not be cut!!! WHY WON'T ANYONE THINK OF THE RICH? #savetherichfolk

alnot01 : There are 5-10 states that will be able to weather the coming pension storm without cutting benefits or Federal bailouts.