Being down 600 points one day, up 400 the next is not just an emotional roller coaster for professional investors. Many Americans' retirements are based on what happens in the markets... and last week's roller coaster is turning into a potentially stormy future for taxpayers.

Why? Because Wall Street's volatility has hit state pension funds - just as they were beginning to recover. According to the Associated Press, California's main public-employee pension fund - the nation's largest - has lost $18 billion since July 1, or about 7.5% of its value.

Florida's pension fund has lost $9 billion in that time - a decline of 7%. Virginia's retirement system shrank $3.5 billiona decline of nearly 6.5% since June 30.

Kentucky has seen the value of its public pension fund decline nearly $2 billion - or 15%- since July 1.

So this just means these public sector workers will get fewer dollars in their pension funds right? Wrong! These pensions are protected by law - for life.

State constitutions in most states require these funds be backed up by tax dollars if need be. These funds are a major reason why many states are drowning in red ink - California already faces an estimated $75 billion in unfunded public pension liabilities.

Nationwide, states have a combined total of more than a trillion dollars in pension and health care obligations. Again - retirees aren't going to miss a payment - taxpayers are going to have to pay more.

Some states are working to fix the problems brought on by stock market swings. For example, New Jersey's pension portfolio is more diverse than ever and includes real estate, hedge funds and private equity investments.

But even as some of these states wise up to the fact fundamental changes need to be made, taxpayers should be nervous about their future liabilities to government retirees.

Is this not a perfect example of why it's time everyone was on the same level? Drop these defined benefit plans for life and put all workers, public and private - on a 401(k) type plan.

These workers are not paying for my retirement, why should pay for theirs?

Be sure to catch the Willis Report on the FOX Business Network every weekday from 5-6pm ET.

Gerri Willis joined Fox Business Network (FBN) in March of 2010. She is the host of "The Willis Report" (6 & 9PM/ET), a primetime program that covers the leading financial and political stories of the day and their impact on consumers.