Report: Government Accounting Hides Debt

[Geee]

Free Beacon:

Your state may not be as fiscally solvent as politicians have led you to believe, according to a new report.

The Competitive Enterprise Institute (CEI) released a report in July detailing the multi-trillion dollar gap in state pension funding that could soon render many states, including Illinois and California, insolvent. The report paints a dire picture of a relatively obscure political issue that has been decades in the making and could drive entire states into bankruptcy.

“The rules that apply to government accounting of public pension plans enable governments to use rosy assumptions about investment returns to make pension assets look sufficient to cover pension liabilities,” the report says. “Many government reports show pension plans being well-funded, even though the accounting standards used by private companies in the United States and most governments throughout the world would show they are not.”