Paul Krugman pooh-poohs The Great Pension Scare
New York Times columnist Paul Krugman, a winner of the Nobel Memorial Prize in Economic Sciences, faults the Washington Post for falsely claiming that we have $3.8 trillion in unfunded state and local pension liabilities in this country.
The real figure, says Krugman, is $1 trillion.
And then he NOTES:
[I]n reality, state and local governments are making only about 80 percent of the required contributions, so there’s a shortfall of 3 percent of payroll. Total state and local payroll, in turn, is about $70 billion per month, or $850 billion per year. So, nationwide, governments are underfunding their pensions by around 3 percent of $850 billion, or around $25 billion a year.
A $25 billion shortfall in a $16 trillion economy. We’re doomed!
…[T]his is just not a major national issue.
So, why is it being hyped? Do I even need to ask?