New year just like the old year … taxpayers face billions in ‘structural’ deficits

I've sounded the alarm for years and I must sound it again in 2012 — Nevadans and U.S. taxpayers in general are headed for a financial Armageddon with our so-called "unfunded liabilities" or hidden "structural" deficits built in to public employee pension funds.

Here's the latest bird's-eye view courtesy of Frank Keegan of the Franklin Center for Government and Public Integrity.

"Taxpayers – through governments and public workers – pumped $25 billion into the top 100 pension funds in three months ending Sept. 30, according to the latest report. Those fund’s managers paid out $52 billion and lost $199 billion in market value. How deep into the fiscal abyss do they have to plunge us before somebody wakes up?

"Even if by some miracle fund managers can meet promised average earnings to pay benefits through 2036 — which would require an average annual risk-free return of almost 10 percent  —  somebody must come up with an additional $45 trillion for all state and municipal pension funds in between to pay promised benefits.

"That’s about $1.5 trillion a year  —  one and a half times greater than the entire U.S. Defense budget —  to provide absolutely no public services. No police on the streets, teachers in classrooms, sanitation workers picking up our trash. No public buildings repaired or built, no food for the hungry or shelter for the homeless, no health care for the indigent  —  no anything."

The mess gets uglier when you know that private sector workers -- the people who really pay the tab for all this -- declined 3.1 million in the last 10 years. While private sector wages increased only 25 percent from 2001 to 2010, Keegan points out, government spending increased 73 percent.

Which means the game of spending more than we have will likely come to an end in the second decade of 21st century. it won't be a happy ending.

P.S. — Nevadans might be tempted to buy the party line that this warning is for everyone else. Here are 40 billion reasons to convince you otherwise.