The Newark Star Ledger again editorialized about the dire funded status of New Jersey’s public pension plans and again they disseminated false information.
There was the promulgation of that understated $54 billion shortfall that no independent actuary would ever sign on to as well as the claim that “Christie and Sweeney would both reduce pension benefits” when there has been absolutely no movement toward touching benefits already accrued which represent the real problem. However, another lie propagated was more subtle:
In his state of the State address Governor Christie did claim that there was an independent study that said New Jersey would be one of eleven states whose pension plans would run out of money by 2020:
That reference was to a study by Joshua Rauh of Northwestern and Robert Nowy-Marx of the University of Chicago. New Jersey was indeed on their list. They were tied with Illinois for third with a projected bankruptcy date of 2018.
Had Governor Christie claimed that New Jersey was on a list of 40 states whose pensions would run out of money by 2030 (another ‘true’ statement) would the media be using a 2030 drop-dead date for New Jersey?
How about if the state legislature passed a law to raise the interest assumption to be used for funding from 8.25% to 10%. Would state and local pensions then be underfunded by at least $24 billion?
This is not to suggest that the Star Ledger should leave off editorializing on the dire state of the state pension but rather that some context be provided, perhaps through a footnote along the lines of:
The numbers herein are provided by politicians, through their paid stooges, who have powerful incentives to lie about them. We do not possess the wherewithal to refute their distortions nor the inclination to call them out as liars for fear that they will pull their legal ads from this paper.