Satisfactory Essays
In Roger Lowenstein’s (2010) article The Next Crisis: Public Pension Fund, it states that public employers have given less than the amount they are supposed to give towards pension funds (Lowenstein, 2010). Public employers have done this by borrowing against retirement plans so they can avoid budget cuts and rises in taxes (Lowenstein, 2010). States such as New York are suggesting municipalities borrow from state pensions in which they already owe money (Lowenstein, 2010). The problem is that many municipalities are already indebted to the State (Walsh & Zezima, 2010). This relates to Dorner’s concept of only looking at the problems we are facing now and not looking at how the situation will unfold (Dorner, 1996). Right now it is a satisfiable solution for the present pension issue, but for the long term the government needs to find some form of reform for the long term issues. Even states such as New York have gambled with state money hoping to get a payoff in the investment (Lowenstein, 2010). For example New York State invested money into hedge funds, private equity, real estate and timber (Lowenstein, 2010). In 2008, the investments lost values by 29 percent and Thomas DiNapoli New York State comptroller lost 40 billion during that year (Lowenstein, 2010). Some of the funds returned in prosperous market periods but they still lost a lot of funds (Lowenstein, 2010).
Additionally, in Mary Williams and Katie Zezima (2010) article Small City, Big Debt Problems, we can see problems in accounting and management which is pushing the pension crisis further. In Central Falls, Rhode Island the city has landed in bankruptcy because of the pension problem (Walsh & Zezima, 2010). They are spending more than they can replenish according to...

... middle of paper ... law suits for cutting cost-of-living adjustments for existing workers’ pensions (Lowenstein, 2010). States must fight against unions to cause changes for pensions (Lowenstein, 2010). Places such as Rhode Island need changes in the management of funding. One main issue is that the government is shoving out more benefits than it can pay for. This means that the government needs to find more revenue, change the management of resources, or cut pensions. If I was a candidate for a governor I would legalize marijuana in every state to fund pensions. It is not that I’m pro marijuana, but it is in the best interest of saving the states from becoming bankrupt. There are probably other cash grabs that involves lesser risks. While generating income there also need to be reforms in management and accounting policies, where we no longer offer benefits that we cannot supply.
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