Most people realize that America’s $22 trillion debt is a problem. After all, that money—or at least the interest on it—will have to come out of workers’ paychecks, leaving them with less money to spend on everything else.

Much less recognized are America’s hidden pension, or retirement, debts. That hidden debt is the money that workers across the country have been told they will receive in retirement—money that, all too often, simply is not there.

Social Security is the most obvious of America’s pension debts. The program has $13.9 trillion in unfunded obligations over the next 75 years. Fifteen years from now, when its notional trust fund runs dry, all retirees will receive about a 25 percent benefit cut.

For the average Social Security recipient, a loss of $4,200 per year in income would be a significant financial hit.

Unfortunately, the retirement outlook is drastically worse for private union workers and state and local government employees. On average, their pension funds are only 43 percent and 35 percent funded, respectively.

Multiemployer pensions have promised $638 billion more than they’ve set aside to pay their retirees. State and local pension plans are short between $4 trillion and $6 trillion.

A private union member with a $24,000 pension, could lose $14,000.

State and local workers could be even worse off. Some of those funds have mere pennies on the dollar on hand to pay promised benefits.

If Congress doesn’t act to improve Social Security and multiemployer pensions, benefit cuts kick in. But if state and local policymakers fail to reform their underfunded pensions, taxpayers will almost certainly pick up the tab because, in most states, retired workers receive their pensions before active workers get paid.

The pension-tax-hikes won’t be small. On average, pension underfunding amounts to between $12,200 and $18,300 per resident.

Such high tax increases could send some states into an economic death spiral. In Illinois, California and Connecticut, for example, per-capita unfunded pension burdens are $29,000 or higher. That’s about $120,000 in additional taxes for a family of four.

Relying on tax increases alone to cover state and local pension shortfalls would almost certainly cause workers and businesses to flee the high-tax states, leaving them with an even smaller revenue base to pay for their unfunded pensions.

Relying on tax increases—through Congress’s proposed bailout—to shore up private union pensions would wrongly penalize taxpayers and the majority of companies that do not participate in union-run pension plans

Similarly, relying on tax increases to shore up Social Security would dampen our economy and lower working families’ incomes. An analysis by Drew Gonshorowski and I shows that workers of all income levels would be significantly worse off if Congress relies on tax increases to solve Social Security. And this is true even if Congress also raises Social Security benefits.

Moreover, the economy would suffer significantly if policymakers rely on tax increases to solve Social Security’s shortfalls. Researchers at the University of Pennsylvania’s Wharton School of Business looked at two proposals to address the problem: the Social Security 2100 Act, which would raise Social Security taxes and benefits, and a more targeted reform that included cost-saving measures such as gradually raising the retirement age, reducing benefits to well-off retirees, and lowering cost-of-living adjustments. They found that the economy would be 7.3% larger with the latter, smaller Social Security program.

How is that so? As former Social Security Principal Deputy Commissioner Andrew Biggs explains: “The logic is straightforward: when taxes go up people work less; when Social Security benefits go up, people save less. If people work less and save less, the economy grows more slowly.

America’s largely hidden and yet-to-be fully realized retirement income shortfalls are on par with the size of our country’s public debt.

While the consequences of failing to recognize and address those massive deficits would be devastating—for retirees, workers, and the entire economy—the good news is that there are solutions. And those solutions—the economically constructive ones—do not include bailouts, massive pension losses, or tax increases.

Commonsense changes to union pension plans can prevent employers and unions from breaking their pension promises, and a properly-managed pension insurance agency can minimize pension losses.

State and local governments can overcome the inherent conflict between short-sighted political interests and long-term pension promises by shifting to defined-contribution retirement benefits that require immediate funding.

Americans can cushion potential retirement shortfalls by capitalizing on improved health outcomes and life expectancies that mean most individuals can work years longer than previous generations.

And Congress can return Social Security to its original roots by shifting benefits from upper-income earners to lower-income earners while letting everyone keep more of their hard-earned paychecks.