In today’s economy, the needs of retirees seem destined to be pitted against the needs of the young.

David Freddoso, a New York Times bestselling author, takes a look at the pension situation in Illinois, which is adversely effecting the state’s education budget (hat-tip Instapundit):

What does it look like when your state’s pension obligations begin compromising its ability to provide basic government services?

It looks a lot like this, from the Chicago Tribune’s editorial board yesterday:

Indiana lawmakers are proposing huge increases in state education funding this year. Ditto those in Wisconsin.

Here in Illinois, The Deadbeat State? Just the opposite. Education funding is being strangled by the same python that is strangling the rest of state government’s finances: pension obligations. Every day that the Legislature delays the enactment of pension reform, the unfunded liability of the state’s five pension funds grows by $17 million, according to Gov. Pat Quinn’s office….

Several of America’s most important state and municipal governments are soon going to be faced with a difficult choice: Repudiate their enormous pension obligations to government employees by simply defaulting (in the case of states) or declaring bankruptcy, or else meet them by letting all other necessary government services go to seed. You have a huge stake in this if you like having your roads paved, dangerous prisoners held behind bars, children educated, etc.

The third option — higher taxes — is at best a temporary patch that won’t solve the problem over the long haul. Moreover, still further tax increases will also be a stretch for many of the jurisdictions that face this problem. Often they have already raised taxes beyond the point of diminishing returns, because it turns out that the same kind of politician who gives away the store in “friendship negotiations” with their campaigns’ union financiers also likes to raise taxes.

The other way out — a federal bailout (of California, Illinois, New York, Detroit, Chicago, etc.) — would make a permanent national minority of whichever party agreed to it.

If you live in a relatively well-governed state where they’ve already dealt with this problem either through a top-to-bottom reform of the system (Michigan and Alaska long ago, or Utah recently) or at least by demanding a bit more skin in the game from public employees (New Jersey or Wisconsin), then you can consider yourself a lot better off.

But for those owning property or a business in Illinois, congratulations: You’re the co-owner a $100 billion in unfunded pension liabilities, in addition to your state’s $9 billion in unpaid bills and $30 billion in general obligation debt. You should probably be thinking of a Plan B for educating your kids or fixing potholes on your street.