“Massive government and public-sector expansion combined with runaway deficit spending on increased welfare and pension programs has, in part, led to Greece’s economic downfall,” says Zack Pruitt in this week’s Acton Commentary. Could America be heading down the same path?
While America does not have the same problems collectively as Greece, similar pension debt vulnerabilities are arising across the country. Unfunded state public pension liabilities (the shortfall between promises made to retirees and workers and the funds currently available to pay for them) total an estimated $4.7 trillion nationwide. The City of Chicago alone has unfunded pension liabilities of $26.8 billion. The U.S. trend toward government reliance, despite its harm and lack of sustainability, is clear. Politicians routinely promise greater benefits without a concurrent plan to pay for them, preferring to pass the cost to the next generation. This starts a perpetual loop of politically expedient benefit increases without proper budget adjustments, creating substantial debt. Future generations will be held responsible for this immoral cycle which undermines both liberty and prosperity.