Too much was promised to city and state employees, and America is on shaky ground. Taxpayers are on the hook for an estimated 4.1 trillion dollars. We have gradually fallen into this trap by making future promises that did not cost anything at the time, but now are coming due at a rapid rate.

According to the Wall Street Journal, the average spending on pensions for the country's largest 250 cities was

2.25% in 2007. This rose sharply to 10 percent in 2013. That is a jump of 7.75% over just six years. Several of our cities have declared bankrupcy to get control of their spending.

How did we get to this place? For one thing, dishonest accounting, or at best estimates that were far too optimistic. According to Barron's, the city of Detroit assumed its pension assets would grow at a steady rate of 8%. In reality, the average growth on the Dow Jones stocks was 2.2%, and the S&P gained 1.36% during those years 2007-2013. Admittedly, we are judging by 20/20 hindsight, but these are recent years, and we should ask why weren't those numbers revised to something closer to reality along the way? Weren't professional forecasters involved in this tragic scene?

The public employees unions have a lot to answer for. Reality now shows these unions asked for more than the long term market would bear. Now the parties must decide how to proceed from here. It needs to be done with cool heads and strong leadership. This country needs effective leaders in the worst way today.

I hope we can solve this huge problem by taking small bites of this elephant at a time. W need incremental changes. Everyone has to be willing to give up something. Right now too much is being paid out of the average city budget. Ten percent is much too high, and to go higher is suicide. We will reach the point where we will pay more to people who used to work for the city than we are paying for the people doing the work today.

We can blame unions. We can blame politicians. We can blame ourselves as taxpayers for not paying more attention, or for not raising more alarm to city hall to wake up. The tendency is to find fault in others and make them pay for our troubles.

Let's use this lesson to revise our budgets and do it evenly among the main parties, which include the employees who are being paid, and the taxpayers who are making the payments. An incremental approach is necessary here. Suppose we freeze the 10% as a ceiling, then decrease the pensions by 1% per year for several years, then hold it there. Get the best qualified people for proper oversight. Keep a long term perspective. We can win this battle if we keep our eyes on the road.