That large unfunded liabilities exist around the Western world is not news. The problem has been known for some time. Yet the wilful denial, creative accounting and fairy tales that surround the issue, have kept it in the background.
On Monday, Stanford University's public policy program released their report on California's unfunded pension liabilities. They cam in at $500 billion, nearly eight times greater than officially reported. This is almost seven times larger than the sum of outstanding voter-approved state general obligation bonds in California.
This growing problem is repeated in many other countries. It points to larger deficits and, where this isn't possible, severe budget cuts. Of course this will also be accompanied by tax hikes. All a poisonous cocktail for sustained recovery.