The Phoenix Network:
About  |  Advertise
Moonsigns  |  Band Guide  |  Blogs  |  In Pictures
 Latest Slideshows

Michael Walsh joins the cast of Spookyworld

Sound Tribe Sector 9 at House of Blues

Slideshow: ''Double Solitaire'' at the Davis Museum; ''Two Kindred Spirits'' at Howard Yezerski Gallery

Conservative Think Tank: RI's Pension Crisis Twice as Bad as You Think

Conservative think tank Rhode Island Center for Freedom & Prosperity is touting a new report from the Mercatus Center at George Mason University suggesting the state's unfunded pension liability (for state and local government) is twice as bad as the state estimates: $18 billion rather than $9.3 billion.

The state and the various cities and towns invest their pension funds, of course. And the Mercatus report is based on the questionable assertion that they should assume a rate of return equivalent to the modest yield on Treasury bonds rather than, say, the 7.5 percent return assumed for the state pension plan.

The report points to the state's poor returns over the last decade - only 2.28 percent, it says, for the state system - to justify its argument. But those poor returns include the effects of the Great Recession, of course.

Charting the liability requires a longer view, most economists would agree - even if there is a reasonable argument to be made about whether 7.5 percent is a bit high or a bit low.

But there is another problem here, too. The Rhode Island Center claims Mercatus is an objective, outside evaluator. But the center, funded by billionaire libertarian brothers Charles and David Koch, has faced no small amount of controversy for its furtherance of the conservative line.

I don't know the motivations of the authors of this particular report, of course - and the paper comes with a little disclaimer that it represents the views of the authors and not the official positions of the Mercatus Center. But the institution's reputation bears keeping in mind.

| More
 Friends' Activity   Popular 
All Blogs
Follow the Phoenix
  • newsletter
  • twitter
  • facebook
  • youtube
  • rss
Latest Comments
Search Blogs
Not For Nothing Archives
Monday, November 14, 2011  |  Sign In  |  Register
Phoenix Media/Communications Group
Copyright © 2011 The Phoenix Media/Communications Group