This display represents a visual accounting of four failures:
First, there is constitutional delinquency. Borrowing against the pensions, forbidden by our constitution, has been the defacto policy of Pennsylvania’s state government since 2003;
Second, as the credit rating downgrades have been telling us, there is economic doom heading our way as the liabilities of the state pension systems rise and their assets decline. Total pension insolvency is possible and even likely within 15 years. When that happens 35% or more of the state and school district budgets will be payments to retirees necessitating severe cuts elsewhere across programs and services.
Third, there is continuing bipartisan political mischief as debt is the drug of choice for politicians and the defined-benefit plans of SERS and PSERS allow elected officials in the present to benefit from and increase current spending on other budget items while pushing the current costs of earned pension benefits down the road.
And all of this is subsumed by a fourth failure: moral bankruptcy—we are committing intergenerational theft by forcing future taxpayers to bear burdens from the past and present for which they may have received no benefit.
The essential takeaway lesson of this very scary debt clock is that the right way to deal with this problem is the right way to deal with any debt problem—pay it off sooner, not later; and aggressively, not pusillanimously. We should do that for the sake of our economy, for the sake of justice, and for the sake of the future of Pennsylvania.