Cris Lingle: Unions Dug Their Own Pension Grave

Cris Lingle: Unions Dug Their Own Pension Grave

Fergus Hodgson, 13 January 2017

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The American Legislative Exchange Council estimates that public pensions at the state and municipal levels in the United States are 35.1 percent funded. In other words, two thirds of the assumed liabilities do not have backing, to the tune of $5.6 trillion. At the federal level, a conservative estimate from Moody’s places the number at $3.5 trillion.

Not surprisingly, one by one, municipalities have been declaring bankruptcy and defaulting on their debts, including at least nine cities since 2010, and Puerto Rico last year. The pressure on these government retirement systems is only building and set to accelerate the defaults this year.

Cris Lingle, originally from Georgia, is an international economist with a teaching position at Francisco Marroquín University in Guatemala. In particular, he specializes in political economy and public-policy reform, and he joins me to unravel this mess. He asserts that public-sector unions have promised themselves unsustainable pensions, and that they should not be entitled to unionize in the first place. Further, he singles out the Federal Reserve as a contributor to the debt load and foresees a rocky road ahead.