The Economist on the U.S. Pension Crisis

This week’s Economist features a report on the crisis in U.S. state pensions, with special reference to New Jersey and the recent study authored by Andrew Biggs of AEI and myself. The piece begins with a view of the municipalities, in this case, San Jose, California which has seen its pension costs triple in the last ten years. San Jose offers workers its own muncipal plan and according to Robert Novy Marx and Joshua Rauh, their unfunded liability is about $4 billion, or 321% of the city’s 2006 revenues.