What Could Go Wrong? For Public Pensions, More Than You Know
Here’s a loaded question for you: “What could go wrong?”
In some contexts, it can express mistaken confidence, as in, “Sure I’ll put my hand between that crocodile’s jaws. What could go wrong?”
Investors should ask the same question before entering a position. “What risks am I taking with this trade? What could go wrong if it doesn’t go as planned?”
But here’s the problem: What if you never think to ask the question because you have no idea you’re in that trade?
And guess what—this is your problem if you are a taxpayer anywhere in the US.
Photo: DWS via Flickr
Pension Pain
Part of my job is helping John Mauldin with the research for his Thoughts from the Frontline letters. Regular readers know John isn’t a doom-and-gloom guru. He’s optimistic on most of our big challenges.
Except for a few things—like the brewing state and local pension crisis.
The more John and I dig into it, the worse it looks. We have both spent many hours trying to find any good news or a silver lining, without success.
All over the US, states, cities, school districts, and other governmental entities have promised their workers generous retirement benefits, but haven’t set aside enough cash to pay what they will owe. At some point, perhaps soon, either they will have to cut benefits to retirees or stick taxpayers with a huge bill, or both.
You can read John’s September 16 letter, Pension Storm Warning, to learn more. Then you’ll see why he says to Build Your Economic Storm Shelter Now.
What else could go wrong? Plenty.
…click on the above link to read the rest of the article…
