Most people think about public employee pensions — to the extent that they think about them at all — as a financial problem. They hear them discussed in opaque actuarial terms like funding ratios, discount rates and annual required contributions. And the numbers are daunting: More than $4 trillion in outstanding liabilities by one estimate.

But this mindset misses the fundamental problem, which is not financial but political. State pensions’ fiscal problems are actually a reflection of a deeper political problem: How to combine modern democracy and fiscal responsibility.

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