There are many forms of awful debt in America.
There is credit card debt, a trillion dollar ball-and-chain on millions Americans. There is medical debt, an insidious form of financial burden that is exacerbated by our terrible health care policies and politics. There is student loan debt, which I am personally dealing with and can say with 100 percent certainty, sucks ass. You also cannot easily get rid of student loan debt through bankruptcy. There is also the debt-collection industry, which John Oliver correctly pointed out is a scummy business with minimal barriers to entry.
Those are major financial threats and problems for Americans. With that said, Americans often overlook a debt that can be hidden in plain sight: pension debt.
This is a debt held indirectly by many Americans: their state legislatures are not funding their pension systems fully. Only three states in the U.S. have fully funded pension systems and the rest of them have not. This can have a dramatic effect on local and state economies. An example from my home state of Connecticut illustrates how.
Hartford, Connecticut is currently facing a municipal crisis. They may have to declare bankruptcy due to their pension obligations. This debt, and debt payments, mean that other parts of the municipal budget will go unfunded, or underfunded. This in turn means that residents will leave the area due to the degradation of these services (this is a proven phenomenon, it already happened in Detroit). This means that jobs could leave the area, revenue could dry up and the vicious cycle would continue.
Pension debt is almost $4 trillion dollars. That’s not just a number for states and municipalities. Those are lives made miserable, promises unkept and people who should be enjoying retirement forced to work until they die.
I’ve personally understood the fact that retirement is something I might get if I’m lucky. I’m almost 30 and have no retirement savings. All of my income goes toward my mortgage, my expenses and my daughter. I can’t think about retiring when I’m basically living paycheck-to-paycheck.
I just hope that I won’t wake up at 90 and have to go put in a double shift.