(Natural News) Despite a bull market that's been running strong for more than 10 years now, public pensions are in very serious trouble, as many states struggle to bring in anything even remotely close to the amount of cash needed to cover their ever-growing pension liabilities.
While public pensions in many areas of the country have been bringing in impressive double-digit returns in recent years, factors like an increasing number of retirees combined with fewer overall employees has hit these public coffers hard – and many of them are on the verge of total implosion.
"This is a microcosm of a problem that is occurring across the nation," reports Zero Hedge, warning that public pensions are operating "in ponzi like fashion" – meaning they rely on the stock market for high returns, much like a Las Vegas casino.
"The main issue is that the amount owed to retirees is accelerating faster than assets on hand to pay those future obligations," the report continues. "Liabilities of major U.S. pensions are up 64% since 2007, while assets are only up 30%."
For more related news about the impending burst of the public pensions bubble, be sure to check out Pensions.news.
One day the whole financial bubble is going to burst – and it's not going to be pretty!
Starting in the 1950s and beyond, pensions generally rose faster than liabilities – at least for the first five decades. And in the 1980s and 1990s, stock market returns were so high that many governments decided that it was a safe bet to continue increasing employee pensions.