Will you be able to retire? Maybe not.
Will your state pay what its politicians promised? Almost certainly not.
Politicians in Connecticut, New Jersey and Illinois are especially irresponsible when it comes to not funding pension plans, but most every municipality has promised more than it will have.
"The money hasn't been set aside for years and years," says City Journal editor Daniel DiSalvo in my new internet video. "Nobody was paying attention."
His colleague Steve Malanga complains that the media rarely report on the coming crisis.
"To a certain extent, I have sympathy with the media, because the media's looking for what happens next," says Malanga. "This is not something that's going to happen next week."
But the collapse is coming. Current retirees may find their pension check is cut by 10 percent or 50 percent.
"We just don't have enough money, and the amount of money that we have to put into this is just mountainous," says Malanga.
Neither party wants to make the tough choices involved. "Both Democrats and Republicans have incentives to short the pension fund," says DiSalvo. "For Democrats, if we can not put as much in, we can free up more money for greater public spending on public programs that we think are good. If we're Republicans, we probably want to cut taxes."
"Ten years from now, they're gonna have a problem," says Malanga. "But 10 years from now somebody else is in office!"
Some pension plans are promises that should never have been made, but few politicians will say that. At most, they talk about making small changes to "keep our promises."
Small changes won't be enough.
Detroit and several California cities already ran out of money and declared bankruptcy.
"At some point, your debts are so great that you can't afford to provide basic services to people," says Malanga.
"Police force, fire protection -- all will be on the chopping block," added DiSalvo.
Instead of making cuts now to avoid crisis later, some politicians increase retirement benefits.
New Jersey passed 13 separate benefit enhancements between 1999 and 2003.
I assume politicians make these unsustainable promises because powerful municipal unions demand them.
"Public employee unions regularly lobby and seek to elect politicians who offer them better compensation packages. They've been intimately involved in the whole system from the beginning," says DiSalvo.
But Steven Kreisberg of AFSCME, the biggest government workers' union, tells me that unions didn't create this problem.
"There's plenty of money to pay our people."
What about the $5 trillion in unfunded liabilities?
That's "a figure that's used by some anti-pension zealots," replied Kreisberg. "It's fake news."
But it's the number (actually, now $6 trillion) you get if you use accounting standards that the federal government demands from private pension plans.
Unions fight to keep every penny that politicians promised. But Detroit's bankruptcy changed the rules on that.
"The federal bankruptcy judge created a precedent that said pensions could actually be cut," says DiSalvo. "That was a shock to the unions. (It) called into question these strong legal protections that public pensions have so long enjoyed. They can't just sit back and say, well, we're going to get paid no matter what."
Some politicians hoped that a rising stock market would fund their promises. Many assumed their investments would grow by more than 7 percent per year. Do you make that much on your savings? I don't. Seven percent seems like wishful thinking.
Malanga says it was "more than wishful thinking. It borders on criminality, frankly. If after nine years of a bull market we haven't begun to fix this, when are we gonna fix it?"
Malanga and DiSalvo argue that the only honest way to fix it is to reduce benefit levels and switch to individual retirement accounts like private sector 401(k)s.
That way, instead of a promise backed by nothing more than political hot air, there's an actual account with money in it, and people can track how well their retirement investments do.
The politicians and union bosses, by contrast, would like to ignore the problem -- until one day, no matter what promises they've made, they simply won't be able to keep them.
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