Working Papers
A Network Approach to Geopolitics
Economics Working Paper 26127
October 16, 2026
Published: October 12, 2017
Stocks and bonds used to have high rates of return, but those times are gone. Bond yields are much lower than they used to be and achieving high returns requires taking on more risk. When shortfalls happen, taxpayers are on the hook.
Be sure to read “Hidden Debt, Hidden Deficits: 2017 Edition,” in which Joshua D. Rauh details the issues surrounding the pension system and the role of governments in increasing liabilities and deficits by means of their pension system.
Discussion Questions
- Why have pension funds had to rebalance their portfolios in order to achieve higher returns?
- What would it take for bond yields to return to their historical performance?
- If state politicians have to resort to raising taxes and cutting services to balance their budgets, why endanger their pension system by underfunding it in the first place?
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