Optimistic about the economy? The looming public pension crisis will cure that

A survey this month by Loop Capital Markets found that only 58 of the 149 state-level pension plans it viewed were funded at 80 percent or more, the standard by which funds are judged to be financially healthy. The median funded ratio for state pension plans fell from 76 percent in 2010 to 73 percent in 2011.

What passed for good news here was that while Loop Capital said the situation was “bad,” it argued it was not “catastrophic.” Not yet anyway. States and local governments could still make up the shortfall.

That’s the most positive spin on the situation. The bipartisan State Budget Crisis Task Force used a colder, more clinical eye in a July report. It found that state and local governments underfunded their pension plans by more than $50 billion between 2007 and 2011. The shortfall will have to be made up.