Beware! Govts do default on pension liabilities

The faith displayed by employees in a future government's ability to pay pension is perplexing when stories abound of state governments having difficulty in paying salaries

Let us begin with the story of an emperor who ruled over a prosperous kingdom. His employees demanded a pay hike for which the royal treasury didn’t have the resources. The emperor instead promised them a gold coin every month after retirement for as long as they lived. The employees agreed.

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