Earlier this year, Illinois said it had found a way to save billions of dollars. It would slash the pensions of workers it had not yet hired. The real-world savings would not materialize for decades, of course, but thanks to an actuarial trick, the state could start counting the savings this year and use it to help balance its budget.
Actuaries, including some who serve on the profession’s governing boards, got wind of what Illinois was doing and began to look more closely. Many thought Illinois was using an unorthodox maneuver to starve its pension fund of billions of dollars, while papering over a widening gap between what it owed and how much it had. Alarmed, they began looking for a way to discourage Illinois’s method before other states could adopt it.
They are too late. The maneuver, and techniques that have similar effects, are already in use in Rhode Island, Texas, Ohio, Arkansas and a number of other places, allowing those states to harvest savings today by imposing cuts on workers in the future.
If average people did this it would be fraud.
Likewise, we threw Bernie Madoff in jail for a massive ponzi scheme. But good lord, he is small time compared to Social Security, Medicare, ObamaCare, and all the other government ponzi schemes like the bloated pension systems.
Apparently our political class has learned that when you can’t stand up to the costs of leadership or responsibility, just do what J. Wellington Wimpy would do.
I would gladly pay you Tuesday…