Pensions Lesson in Government’s Incentive to Spin


If more citizens–in towns, cities, and states–understood the calculations and rhetoric of the pension systems dependent on their taxes, they’d be kicking out incumbents at the nearest opportunity.

When then-General Treasurer, and now Governor of Rhode Island, Gina Raimondo, embarked on her “Truth in Numbers” campaign, enough people understood the problem to help her push through a reform of the state’s pension system, for which she received national recognition.  But not enough people had learned the lesson of skepticism, and thusly believed her when she announced the problem had been solved.

Complexity is only one side of the wooden nickel that ought to make Americans wary of allowing government to grow beyond some basic responsibilities.  The other side is incentives.

Continue reading on (and feel free to leave comments over there, too)…

  • Greg

    Yes, Justin, those who are astute politically (so few) know what is going on. Politicians who hide the facts know they can escape retribution.. Hence, the need for a vigilant public. Whoops! That’s the problem we are so few. Unfortunately, the general public only becomes aware of the problem when the crisis rears its ugly head. Meanwhile, our politicians will continue to kick the problem down the road because it serves their self-interest. Right on!

  • Warrington Faust

    I think the public is well aware of it, while missing the forest for the trees. I know several several self-employed guys who have made terrific efforts to get their wives government jobs. That takes care of health insurance, and the pension doesn’t hurt either. If you follow Massachusetts news, the House Speaker (the only one since 1990 not to be indicted) just got a “rules change” which will kick his pension to $140,000. It was in the news. Do you think the voters missed that? Do you see revolution in the streets?

  • Winter Solstice

    I posted on and will continue to follow your comments on that site. However, I checked the RI Auditor General;s site ( for the June 2013-June 2014 FISCAL year. According to Dennis Hoyle, the pension system had eight and a half billion dollars on June 30, 2014. At the end of the CALENDAR year, it had $7.96 billion in it. We (taxpayers and retirees) lost half a billion dollars in six months. Treas refers to volatility in 2014 but if my memory serves me well, then-Treas Raimondo repeatedly stated that the 25% allocation to alternative investments would lower risk and volatility (hedge funds less risky and volatile???). Also, serious problems have emerged with two of her hedge fund investments, Mason Capital and Brevan Howard. Reforming the payouts of a pension is only half the job. The other half is prudently managing the funds to safely maximize returns, especially when we enjoyed a strong bull market these past 5 years. Leaving half of the “reform” undone is NOT solving the pension crisis. Please continue to investigate this issue.