Everywhere You Look the Money Isn't There

Alex over at Marginal Revolution warns us about the next financial crisis. Always more good news every day. He says that not only are Social Security and Medicare underfunded, but also that, "state governments have vastly underfunded public pensions." He quotes this section from the recent NBER paper:

We conservatively predict a 50% chance of aggregate underfunding greater than $750 billion and a 25% chance of at least $1.75 trillion (in 2005 dollars). Adjusting for risk, the true intergenerational transfer is substantially larger. Insuring both taxpayers against funding deficits and plan participants against benefit reductions would cost almost $2 trillion today, even though governments portray state pensions as almost fully funded.[emphasis his]

So some of our healthiest institutions need $2 trillion to continue to function at the most basic of levels. Tip your mail-carriers, folks.