“We Are All Going to Pension Hell”

2013
I have been writing about this subject for years. There is an unholy alliance between politicians and public employee unions. That alliance has contributed significantly to the financial woes, if not bankruptcy of many cities and states. By comparison with the private sector, public pensions and other retiree benefits are generous, there is no getting around it. They have defined benefit pensions, typically with cost of living increases. They have good, if not generous health care benefits for both early and Medicare-eligible retirees and more. Even the argument that these benefits are justified because of lower pay is bogus. It would be far better for taxpayers if pay was increased and benefits were standardized to large employers in a region (except in many cases pay is not lower than the market now). With the money being spent on wages, the costs would be transparent and could not be passed along to future generations. With pensions the cost is underfunded and allowed to accrue without regard to the long-term consequences. In other words, politicians play games for votes with generous promises not paid for.

When a crisis hits, as it always will, the blame game starts, the guilty run for the hills or claim ignorance. Scapegoats are found (see the picture below) and always those hurt are the innocent workers (except they elected the politicians and union leaders who promised all this) and the taxpayers (many of who did the same). So, if you live in Detroit or Chicago, or NJ or many other locations yet known and you feel bad for union workers who are experiencing benefit cuts or broken promises and you are unhappy with your property and other taxes, it is after all your bloody fault isn’t it!

I urge you to read the full article as contained on Bloomberg.com via the link below.

One of the most startling moments of the Detroit bankruptcy was when a judge stepped in to stay the bankruptcy at the behest of the city’s public sector unions…and then said that she was going to tell the president about this.

“It’s cheating, sir, and it’s cheating good people who work,” the judge told assistant Attorney General Brian Devlin. “It’s also not honoring the (United States) president, who took (Detroit’s auto companies) out of bankruptcy.”

Aquilina said she would make sure President Obama got a copy of her order.

“I know he’s watching this,” she said, predicting the president ultimately will have to take action to make sure existing pension commitments are honored.

Megan McArdle –
Megan McArdle is a Bloomberg View columnist who writes on economics, business and public policy. Her book, “The … MORE

For more on the subject of public employee unions, their employee benefits and the impact on taxpayers and ultimately their members, search “unions” on this blog for several articles on this subject.

via We Are All Going to Pension Hell – Bloomberg.

This picture says a lot about America today.

Photographer: Jeff Kowalsky/Bloomberg

Related articles

• Public Pension Shortfalls Are Everyone’s Problem – Bloomberg (bloomberg.com)
• Bloomberg Warns New York May Be Next to Go Bankrupt (lynleahz.com)
• Pensions don’t cause bankruptcy, people do (most often politicians) (quinnscommentary.com)
• NYC may collapse like Detroit, Mayor Bloomberg warns (nzweek.com)