This is the Cato Daily Podcast for Friday, September 24th, 2021.

I'm Caleb Brown.

Among Illinois's many problems, state pensions stand out, and they stand out because many other states will be

facing similar problems in a few years. Adam Schuster is a budget and tax research

director at the Illinois'

problems with pensions could be coming to a state near you.

To the extent that listeners don't care about

Illinois state pensions, which is to say pensions guaranteed to government employees,

former government employees, quasi government employees in some cases.

They should because Illinois is a case study in how not to fund, how not to set up, how not

to build pension obligations into your state constitution

and for a lot of states that our

pensions are a third tier, maybe a second tier issue, they will be a big issue and it's a slow moving title wave for a lot of state budgets. Is that fair to say?

That's absolutely fair to say. Depending on whether you do it on a market

basis or an actuarial basis, nationwide public pension debt is somewhere between basis. Nationwide

Nationwide public pension debt is somewhere between 1.6 trillion, as high as nearly 5 trillion dollars, so it is a nationwide problem.

Illinois is the worst in the nation when it comes to our pension crisis.

According to Moody's Investor Services, for example, just the state systems, not even including

local pensions for police, fire, all these other local government employees.

Just the state pension systems have 317 billion dollars in unfunded liabilities.

And this matters not only for the whole nation not only because what happens in Illinois

with our pension crisis is likely to set the stage for what happens elsewhere as pension debt becomes a bigger

...