"Today, public pension debt stands at an alarming $4.4 trillion, with outstanding state and local municipal debt at nearly $3 trillion," a U.S. Senate report said last month.
Nobody knows yet whether Detroit will be forced to slash pensions and health care for thousands of retirees left in limbo by this crisis. Nobody knows yet how many other U.S. cities might follow Detroit's demise. The looming menace is so huge that one website is titled "Pension Tsunami."
One problem is that Americans keep living longer -- so they collect pensions for more years and run up astronomical geriatric medical bills.
"As the baby-boom generation (those born between 1946 and 1964) retires, fewer workers must support more pensioners," The Economist observed. "New York City now has more retired policemen than working ones, and spends more on cops' pensions than on cops' wages."
Many private corporations have addressed this dilemma by switching to "defined contribution" pensions, in which employees pay into 401(k)-style investment plans and collect stock market earnings when they retire. But most governments still provide old-style "defined benefit" plans that guarantee public employees fixed pensions -- usually more lucrative ones.
Despite the Washington Examiner report, West Virginia has taken bold steps to cure its underfunding nightmare. Wise leaders sensibly used state surpluses to shore up set-aside funds.
When Joe Manchin became governor in 2005, he and legislative leaders such as then-Senate President Earl Ray Tomblin faced a more-than $10 billion shortfall in teacher pensions, public employee pensions, judge pensions, trooper pensions, plus workers' compensation debt. They privatized workers' comp and funneled large surpluses into the skimpy pension reserves. Hurrah. Today, West Virginia is more solvent than many other states.
Meanwhile, the pension tsunami is deluging various parts of America. The number of looming Detroits can't be predicted. We hope Mayor Jones is correct in declaring that Charleston won't be among them.