There’s an old saying that goes: If something can’t go on forever, it won’t.
In Illinois, there are so many people on the public pension system right now that some folks are starting to worry that the’re going to run out of funds.
This is similar to what happened in Greece a few years ago. It’s what happens when there are too many people living off public retirement funds and not enough people working to carry the burden.
From Real Clear Policy:
Illinois’ Pension Bomb Has a Short Fuse
A crisis exposes weaknesses.
The COVID-19 economic crisis showed the danger of government making promises it can’t afford.
Here in Illinois, the crisis has served as a dress rehearsal for the kind of havoc the state’s pension crisis could inflict on the Illinois economy and government retirees if nothing changes.
More than 1 in 10 Illinoisans – 1.1 million, or about 11.4% of the adult population – are members of an Illinois public pension system.
Those government retirment systems are sitting on mountains of debt. There’s $144 billion in debt just in the five statewide systems, by the state’s conservative estimate, or $261 billion by a more realistic, independent estimate. They average only 40% of the funds needed to pay out retiree benefits long-term.
If you add in local pension debt, Illinois’ unfunded pension liability totals more than $200 billion by the state’s measure, and that amount grows every year. Another shock such as the Great Recession could cause the first pension fund to run out of money by 2039, according to actuarial analysis.
To make matters worse, the population of Illinois is shrinking.
Illinois had 12.9 million residents in 2013, slipping to 12.59 million now.
The state's population is now #6, falling behind Pennsylvania.
Illinois had unfunded pension liabilities of $137 billion in 2019, rising to $141 billion in 2020.
The tax base? On a beach somewhere. pic.twitter.com/oisIil1FwZ
— Jeff Weniger (@JeffWeniger) April 13, 2021
This is a recipe for disaster.