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Jim in CT: I take your point that you draw a line in the sand and go forward but I think you are buying a major lawsuit that the state may well lose if it does not pay the money it was required to do so before the cut off date.
Piscator: In the private example there is no more money left at the company to pay into the pensions. With a state that has assets and the power to tax that is not the case which again that leads to a lawsuit and would really hurt the state in the bond market.
The current issue of the Economist has a great article on public sector employees and the issues facing both the US and the developed European countries. Well worth reading if you have the time.
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