The majority of states are facing enormous budget deficits. Approximately half of them also have large unfunded liabilities in their public employee pension plans (due in part to their refusal to make the recommended annual payments), including those covering teachers. Currently, teacher pensions are protected by state constitutions and payments guaranteed to pensioners.
|Retirement for Public Workers? (Image by Clemson)|
However, there is now some movement in Congress toward allowing states to declare bankruptcy, which would allow them to nullify existing contracts, including those between states and public employee unions that had protected their pensions. If successful, it could consign the majority of public employees to a lifetime of toil or a retirement living in poverty.
The wealthy, of course, would continue to enjoy their large tax breaks, miniscule capital gains taxes, record corporate profits and a retirement living in luxury.
|Retirement for the Ruling Elite (wikicommons)|