Estimates of aggregate funding requirement of the US pension system have ranged between $400bn and $500bn, but Mr Kramer’s analysis concluded that public funds would need to find more than $2,000bn to meet future pension obligations.
A shortfall of that size could force state governments to take unpalatable decisions such as pouring more public money into their funds or reducing pension benefits. State and local governments have already cut spending to close budget deficits.
Another reason why infinite QE will continue under the guise of recovery. Either public pensioners lose through reduced payouts now or reduced purchasing power later. The preferred solution will always seek the latter.