Guess which state is too small to fail? The smallest, Rhode Island, has a huge public pension problem. NY Times: "The little state with a big mess."
After decades of drift, denial and inaction, Rhode Island’s $14.8 billion pension system is in crisis. Ten cents of every state tax dollar now goes to retired public workers. Before long, Ms. Raimondo has been cautioning in whistle-stops here and across the state, that figure will climb perilously toward 20 cents. But the scary thing is that no one really knows. The Providence Journal recently tried to count all the municipal pension plans outside the state system and stopped at 155, conceding that it might have missed some. Even the Securities and Exchange Commission is asking questions, including the big one: Are these numbers for real?This is part of the same theme I rail about when it comes to runaway entitlement spending: state and federal governments have made a long line of promises that cannot be kept but nobody wants to do anything to fix the problem. Does anybody sense a bold move that will restore Standard & Poor's AAA assessment of America's long-term credit? The Congressional supercommittee? Oh, please.
“We’re in the fight of our lives for the future of this state,” Ms. Raimondo said in a recent interview. And if the fight is lost? “Either the pension fund runs out of money or cities go bankrupt.”