As if hanging on to your hard-earned money is not difficult enough, now comes another issue that investors/taxpayers have to face. That is, state and local governments openly admit to $1.4 trillion in unfunded liabilities ($11,000/household), while the Federal Reserve estimates the number to be $4 trillion ($32,000/household).
Why should you care about public pension liabilities in your in your state, county, and city? Because the courts have ruled that such pensions are mandated and that governments can be required to raise taxes to meet those pensions, which means that your home is under siege.
In Phoenix, taxpayers are well aware of the problems with pensions. Candidates for the city council seek the support of “First Responders.” After getting elected, they then support both high salaries and extremely generous pensions for fire fighters and police personnel. Some number of years ago, the city doubled water rates in order to meet its pension obligations.
For a five-minute video on how this situation arose, see Public Pensions: An Economic Time Bomb.
