I see they are playing the really big number game in my home town. The Chicago Tribune headlined a news story: "Chicago pension tab: $18,596 for every man, woman, child." That's pretty scary. Fortunately my Chicago public school teachers taught me about fractions and denominators. That is what is missing here.

The key point is that Chicago does not have to pay this money tomorrow or even over the next year. This is a liability over the next 30 years. The relevant denominator then is Chicago's income over the next 30 years. I don't have the time to check the city's income data just now, but if we assume that disposable (after-tax) per capita income is the same as for the country as a whole ($40,000 a year), we get that the discounted value over the next 30 years will be roughly $1.1 million. (This assumes 2.4 percent average annual growth and a 3.0 percent real discount rate.)

I also don't have time to review the basis for the $18,596 pension tab, which puts the unfunded liability at around $50 billion, almost twice the official figure. But taking the number at face value, we get a liability that is equal to 1.7 percent of the city's projected income. That amount is hardly trivial, but also not obviously a path to poverty.

By comparison, the slowdown in health care cost growth over the last five years has probably saved Chicagoans at least this much money, with costs close to 10 percent less than what had been projected back in 2008. You didn't see the big news articles touting the big dividends from lower costs? Oh well.

Anyhow, the unfunded pension liabilities are a big issue with some big villains. At the top of the list is Mayor Richard M. Daley who thought it was cool not to meet the city's pension obligations for his last decade in office. Surprise, that leaves a shortfall. The bond rating agencies also should be strung up from the bridges over the Chicago river. They signed off on accounting back in the 1990s that assumed the stock bubble would continue growing ever larger. This meant that the city didn't have to contribute anything to the pensions.

When the city got in the habit of not contributing in the boom, it became much more difficult to suddenly find the money in the bust. Hence we get Mayor Daley's decision not to cough up the money the city owed. (Yes, this was predictable, as some of us said at the time.) These are the villains in this story, not the school teachers, the firefighters, and the garbage collectors who worked for these pensions in good faith. Not paying them the pensions they are owed is effectively theft and if Chicago is going to get into the game of stealing, it makes more sense to steal from the people who have the money than retired workers who will be living on a bit over $30,000 a year.

Full disclosure: My mother is a retired employee of the state of Illinois, so she may be among the pensioners who are on the chopping block in this story.