10-14-2010, 08:30 PM
The issue from a pensions perspective is that the accounting rules for pension funding were relaxed to take 'expected growth' into consideration. Which, in a constant growth economy, was considered 'good and normal'. But when growth stopped and was replaced by recession, the theory collapsed and already undervalued pension funds went to critically undervalued and/or broke.
Empirically, pension fund valuation was handled and reacted the same as real estate valuation.
Or Tulips. Or Beanie Babies...
Strengthening the pension fund accounting rules and slowly adding a requirement for less risky investments would make our country a 'saver' country instead of a 'risk taking debtor' nation.
Empirically, pension fund valuation was handled and reacted the same as real estate valuation.
Or Tulips. Or Beanie Babies...
Strengthening the pension fund accounting rules and slowly adding a requirement for less risky investments would make our country a 'saver' country instead of a 'risk taking debtor' nation.