Latest / The Fiscal Policy Podcast with Fexingo: Government Budgets, Stimulus, and Public Spending
How the Federal Governments Unfunded Pension Liability Works as a Stealth Tax
Beyond the headlines about Social Security trust funds, the federal government has a massive unfunded pension liability for its own civilian and military retirees — an obligation that exceeds $2 trillion on an actuarial basis, yet doesn't appear on the balance sheet like corporate debt would. In this episode, Lucas and Luna trace how this liability accrued: starting with the 1984 shift to the Federal Employees Retirement System, the government's decision to fund current benefits rather than pre-fund future obligations for military pensions, and the bipartisan reluctance to change…
The skinny
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