Walter Russell Mead explains the public pension crisis in Rhode Island:

Rhode Island is one of the bluest states in the country, and one where public sector unions have long worked with sympathetic politicians to create a true blue system of well paid public employees retiring comfortably on generous pensions with cost of living raises automatically thrown in.

The only problem is that the state could never afford the beautiful utopia it was crafting, and so politicians and union leaders chose the path of systemic deceit.  Taxpayers weren’t told what the bill for the system would be; public service workers weren’t told that the pension guarantees they’d been sold were worthless because taxpayers would not and could not foot the bill.

An economic crisis is nature’s revenge on those who make and those who accept false promises; it is a holocaust of lies when the dross is burned away and only what is real and true remains. Think of cotton candy melting and charring in the flame of a blowtorch; that is what is happening to the secure retirements that “caring” blue politicians and “committed” blue union leaders promised gullible state workers.

It's called a Ponzi scheme. Read it all.