Governments, Insurance and Unfunded Liabilities

There are a lot of things one can criticize about the private insurance market, but one thing you can’t say is that they have chronic issues with unfunded liabilities.  In contrast, you can barely find a story about government pensions or retiree benefits that doesn’t involve funding problems. 

Simply put, governments are really bad at managing current commitments to future obligations.  They habitually fail to put enough money aside to fund their promises.  I suspect a deep sociological root to this, that those with immediate needs or experiencing immediate suffering will always take precedence over future needs which can only be understood now in abstract.  Or it could be a cynical political calculation that tomorrow’s voters don’t vote in today’s elections.  Regardless, efforts to write insurance through government agencies warrant skepticism. 

Ask the question of your elected officials: are you willing to ignore current needs and suffering in order to save enough money to meet future obligations?  If not, you shouldn’t be in the insurance business.