In July, Illinois Governor and future presidential hopeful JB Pritzker faced a moment that captured democracy’s greatest weakness. His own CFO had warned that proposed pension increases for Chicago police and firefighters would add $6.6 billion in unfunded liabilities over 30 years. With Chicago’s debt rating hovering just above junk status, the bill would push the city’s funding ratios below 20%—what actuaries consider insolvency. The state would be liable for the shortfall.
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Pritzker signed it anyway.
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When pressed, the governor offered a feeble excuse: Mayor Brandon Johnson "never once called" him to oppose the bill. Pritzker accelerated Chicago’s plunge off the fiscal cliff because he lacked the political will to confront Illinois' vicious cycle—public unions fund Illinois Democrats who then hand them ever-increasing benefits. This is what decades of unchecked one-party rule has wrought in Illinois: a system where the spoils of power go to the few at the expense of the many.
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The average career state pensioner now collects $25,000 more annually than the average worker supporting them. They contributed just $1 for every $19 in benefits they receive—working Illinoisans pay the rest.
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This isn't just poor governance—it's democracy devouring itself.

America's Colossal Pension Problem

But this democratic failure extends far beyond the shores of Lake Michigan. Across the nation, public sector unions—representing just 13% of the workforce—have engineered a system that grants them vastly superior benefits at taxpayer expense. While 54% of public union workers receive guaranteed pensions, only 8% of private sector workers do.
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Unlike other interest groups, government unions hold monopoly power over essential services. They can shut down schools, police departments, and fire stations to extract concessions. The pattern is the same everywhere: unions demand more, politicians fold, costs explode, taxpayers flee.
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The scope of the problem is staggering: state and local governments face $1.35 trillion in unfunded pension obligations, while Social Security—the largest pension scheme of all—is running a $28 trillion shortfall and will be insolvent by 2033. Yet neither party will touch the third rail of American politics. Republicans fear being labeled as hurting seniors; Democrats seldom acknowledge the mathematical impossibility.
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The federal government has only deepened the problem. In 2021, President Biden’s American Rescue Plan created the Special Financial Assistance program, which has approved nearly $70 billion in taxpayer-backed aid to failing union pension plans, discouraging reform. How many voters even knew about this bailout? Economist Anthony Downs once explained this “rational ignorance”—voters have little incentive to understand diffuse fiscal transfers that benefit small, concentrated groups.
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But this is not just the result of voter ignorance—it’s the predictable outcome of what economist Mancur Olson called the "logic of collective action.” Small, organized groups regularly defeat large, disorganized ones. Union retirees turn out in elections and mobilize to protect their benefits. Taxpayers, whose costs are spread thin across millions, look the other way. Private-sector workers who lost their own pensions now subsidize government employees who retire earlier and richer than they ever will.

The Global Pension Epidemic

This democratic flaw isn’t uniquely American— It’s spreading across the entire developed world:

• German Chancellor Friedrich Merz now warns "the welfare state that we have today can no longer be financed with what we produce in the economy" and that "the intergenerational contract must be rethought"—a political euphemism for stopping generational theft.
• Italy spent a decade fixing its pension crisis after nearly collapsing in 2010, only to watch unions now demand a rollback of those very reforms.
• France erupted in strikes when Emmanuel Macron tried raising the retirement age to a still-generous 64
• Japan spends nearly a quarter of its GDP on pensions, the highest in the world.

The OECD estimates that by 2050 most advanced economies will have only two workers for every retiree. Today, many are already devoting more of their budgets to pensions than to defense or infrastructure. Most leaders facing this reality choose the same path Pritzker did: defer the math in exchange for short-term political survival.
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Yet demographics aren't the problem —democracy's core vulnerability is. Concentrated interests outmaneuver the diffuse majority. Voters reward easy promises, not hard choices. The result is mounting debt that future generations cannot pay.

The Path Forward

Yet the solutions are not mysterious. Every economist knows them: link eligibility to life expectancy, raise retirement ages, trim benefits, and in the U.S. consider partial or full privatization of Social Security. These reforms are simple in design—but they require the political will that both parties lack.
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Until leaders—or voters—summon the courage, democracy will keep trading tomorrow’s solvency for today’s votes. And eventually, the math will prevail where politics would not.
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