The pension problem keeps getting worse; a Burypensions post reports that the decline in asset values due to Friday’s debt downgrade has delivered a major blow to pension programs in New Jersey.Garden State pensions were already in a hole; politicians lied like rats to promise state workers high pensions while hiding the costs from voters. The easiest way is to assume unrealistically high rates of return on investments.The current economic slowdown and swooning stock market will cripple state pension programs and not just in New Jersey. Pension fund investments will not do well, and states face low tax revenues in a bad economy.Some readers hate it when I quote Thomas Carlyle (who in some ways was a very nasty piece of work) but he was so right about this that it bears repeating:
Great is Bankruptcy: the great bottomless gulf into which all Falsehoods, public and private, do sink, disappearing; whither, from the first origin of them, they were all doomed. For Nature is true and not a lie. No lie you can speak or act but it will come, after longer or shorter circulation, like a Bill drawn on Nature’s Reality, and be presented there for payment, — with the answer, No effects. Pity only that it often had so long a circulation: that the original forger were so seldom he who bore the final smart of it! Lies, and the burden of evil they bring, are passed on; shifted from back to back, and from rank to rank; and so land ultimately on the dumb lowest rank, who with spade and mattock, with sore heart and empty wallet, daily come in contact with reality, and can pass the cheat no further.
Lies do not live forever. It is a good and necessary thing that this is so, but when a people has allowed its life to become tangled and mired in untruths, the process of extrication is neither painless nor fair.