The numbers are eye-opening for the amount by which states have been understating the amount that they owe public employees for their pensions.
The pension funds for state and local workers in the United States are understating the amount they will owe workers by $1.5 trillion or more, according to some economists who have studied the issue, meaning that the benefits are much costlier than many governments and taxpayers thought.Such stories cast a different look at what governors such as Scott Walker, Chris Christie, and John Kasich have been trying to do. The states have been making overly optimistic projections about the returns on investments in those pension plans. Check out how big a shortfall your state is facing in 2012.
Doubts about government pension accounting have been voiced by analysts for years, but with shortfalls in state and local pension plans exacerbated by the recession, the push to refigure pension fund shortfalls has gained political momentum.
The trillion-dollar gap arises from the government method of accounting, which several experts say significantly underestimates the cost of future pension payments.
"It's been a perfect storm," said Alicia Munnell, director of the Center for Retirement Research at Boston College. When the pension liabilities are correctly tallied, "you get a very, very large number."
Here's another statistic to wake people up.
In a newly released report, the Government Accountability Office (GAO) estimates that, in fiscal year 2010, $48 billion in taxpayer money was squandered on fraudulent or improper Medicare claims. Meanwhile, the nation’s ten largest health insurance companies made combined profits of $12.7 billion in 2010 (according to Fortune 500). In other words, for every $1 made by the nation’s ten largest insurers, Medicare lost nearly $4.It kind of puts the efforts of the Democrats and Obama to put as much as possible of our health care under government control in perspective, doesn't it?
This is sobering news for the minority of Americans who (for some reason) continue to think that government-run health care is a model of efficiency and cost-effectiveness. Last year, total outlays for Medicare were $509 billion; therefore, Medicare spent nearly 10 percent of its outlays on fraudulent or improper claims. Actually, it may have been even worse than that: The GAO writes that this $48 billion in taxpayer money that went down the drain doesn’t even represent Medicare’s full tally of lost revenue, since it “did not include improper payments in its Part D prescription drug benefit, for which the agency has not yet estimated a total amount.”
And if you had hope that a ban of earmarks would make a difference, Democratic Representative Jim Moran isn't concerned.
In response to a question about whether earmark bans have "curtailed" the Appropriations Committee's power, Moran responded, "No, and I have to say — and I'm going to be as candid as possible — the appropriators are going to be okay because we know people in agencies and so on. We will continue to do the best job we can for the country and to some extent for our congressional districts because that's our job as well."It's nice that he can celebrate his back-door deals to grab a bigger chunk of federal money for his district. Sadly, he's probably right.