49 ms·

Could it be pensions? After bankruptcy they can dump those expensive plans. (Like the city of Detroid and other states already did).

• yummyfajitas 13y ago
  Nowadays you are only allowed to underfund government pensions (USPS excluded). Private sector pensions must be fully funded - i.e., if an employee has vested a pension with an actuarial value of $20k, the company must put $20k into a separate fund to pay for it. (Some old pension plans are grandfathered to escape this, however.)
  • malka 13y ago
    Except that $20K today may not have the same value as $20K in 30 years.
    • erichocean 13y ago
      So, lobby the government to enact a law that adds X newly-printed dollars to each pension each year based on the government's own inflation calculation. Then the value of the pension each year would stay the same, and even better, the pension would not need to invest in risky assets. (If you want, mandate that the pension invest in T-bills, and then cover the difference.) This kind of approach involves no new taxes, and there's absolutely no reason to "borrow" the money from the Federal Reserve either, or future generations, or the general public via T-bills. Literally, you just need to change the amount of money each pension "has" on the books. The banks are regulated, and they'd be forced to except the updated balances by law.