The Public Employee Retirement System (PERS) crisis has hit a $22 billion deficit and the Legislature seems paralyzed to address the crisis. The media is sounding the alarm and experts are hinting that we might have to fall off a cliff before changes will come.
A website Oregon Ponzi Scheme helps to compare the Bernie Madoff Ponzi scheme to Oregon PERS crisis for which Katy Durant, former chair of the PERS investment council stated “We should have been addressing this 20 years ago and it’s just been building. It’s a little bit like a Ponzi scheme. Sooner or later it’s going to catch up with you.”
The Ponzi parallels are clear when you have a system that can not pay for itself and you constantly need new sources of revenue to prop it up and eventually delaying the collapse.
Law professor Scott Shepherd has proposed an innovative solution available to the courts in an op-ed entitled “Oregon pension reform already in place, we just need to use it.”
Some lawmakers have floated ideas, but they have not been taken seriously or moved and yet the Legislature is expected to close within the next nine weeks. If nothing is done the PERS deficit will grow, and the Ponzi model continues to become unsustainable and the cuts to public services like police, fire and schools worsens.
The next nine weeks are vital for the direction of Oregon.