What's The Problem?

I read somewhere that when Dustin Hoffman heard an ad for pills to treat erectile disfunction that cautioned: "Seek medical attention for an erection lasting longer than four hours," he commented "What's the problem?"

That was my reaction when I read a Reuters news release about Republicans proposing legislation to allow states to seek bankruptcy protection because of enormous, unfunded, unsustainable public employee pension laibilities. Some govenment analysts "are concerned that opening up a bankruptcy option would spook the buyers of state debt, driving up interest rates and making borrowing more expensive."

What's the problem?

Not doing anything about these enourmous, unfunded, unsustainable public employee pension liabilities won't make them go away.

A federal bailout won't make them go away.

Slashing other state services to the bone - education, health care, road repairs, libraries, &etc. - won't make them go away.

Even eliminating them entirely won't make them go away.

In fact, the only effective treatment is the immediate termination of existing public employee pension contracts (defined benefits), and their replacement with defined contribution plans.

Anything else is like coitus interruptus - as ineffective for budget control as coitus interruptus is for birth control, and less satisfying.