Skip to comments.Pension Fix: Heading Off a Disaster
Posted on 01/28/2012 10:38:13 PM PST by Lancey Howard
The pension bubble: Its a well-documented, potentially disastrous phenomenon. State pensions for public employees are underfunded by about $30 billion, give or take a billion. Thats money that was promised to workers upon their retirement and is guaranteed, regardless of stock/bond market performance. By law, investment shortfalls have to be made up by the state or some other government entity. The choices when that happens are slim and equally unappealing: cut services or hit the taxpayers harder.
The bubble is about to burst, perhaps within a year, and that could result in huge were talking really huge tax increases and/or Draconian reductions in services. Maybe even the elimination of some. Weve known about this for a while. But the state Legislature knows only two speeds, slow and stop, and pulling teeth is easy compared with getting Harrisburg lawmakers to move. Not even an impending tax catastrophe has shaken them into taking action to resolve the pension crisis.
Warren Kampf is a freshman Republican state lawmaker, and apparently no ones told him yet that the Legislature doesnt respond to imminent disaster very well.
(Excerpt) Read more at phillyburbs.com ...
This is from a local Philadelphia suburban (Bucks County) newspaper, but the issues discussed could be applied to most states.
By the way, I read through the comments following the editorial and most are moronic. Some of the comments go off on a bizarre tangent about legislation authored by the drunken swimmer, Teddy Kennedy (D-Hell), known as “No Child Left Behind” - - except the posters of those comments seem to think Bush wrote it. ??? Whatever... Ignore the comments at the site - - they are a waste of time.
Or the country.
” ..their retirement and is guaranteed, regardless of stock/bond market performance. By law, investment shortfalls ...”
And there you have it. The entire reason for the “bailout” of 2008, and the frantic passage of Federal Arbeitsziehungslager-Care.
How many times have I to say it, the so called “market” is a false “market” agented with government pension money.
The next QE is already being floated until they kick in the Arbeitsziehungslager shackles.
I’ll note again, what so called candidate has mentioned even ONCE, in any of these so called “debates”, an immediate EXEMPTION executive order for EVERYONE, based upon non-discrimination, UNTIL that time in which Arbeitsziehungslager-Shackles is repealed or eliminated!
Until I hear it, they are ALL after the government vote!
The tax payers should refuse to honor obscene pensions agreed to by corrupt politicians.
That’s an excellent post, and I agree completely.
Over the last decade, the cost of benefits for government workers in Pennsylvania has risen 50 percent more than the same costs for those working in the private sector. Guess who pays for those benefits.
Ubama, of course. From his stash.
There is no more tax money to be had. The private sector people for the most part are broke, those who still have homes struggle just to make their freaking payments.
And it's not just the cities. It's the counties, states and the federal government. Corrupt bloated government at all levels have left the country bankrupt and broke.
At the moment there are three things in life I am sure about, may be not about in that sequence but here they are any way. Death, taxes and the direction this country is headed. Sooner than later something has to give, but what it will be I am not so sure. Unfortunately there are still way too many people who are either too ignorant, too dumb or live in a dream world to recognize and see what is coming down the pike. Just been looking at the polling results from Florida and from what I could see there are still way too many who apparently have not seen the light. Makes one wonder what it will take, perhaps an event of biblical proportions to get this once great country back on track, or some revelation which will take most people by surprise. All I can say is that we live in interesting times.
There's corruption on all sides.
or a "surcharge" or some such...
you can't retire people when they are in their late 40's or early 50s' plus medical and expect it to be feasible...its NOT sustainable...
that goes for all govt entities including the military.
FDR strongly opposed public sector unions, but JFK gave them the green light to unionize.
Unfortunately those voting with their feet will urge those bankrupting policies on their new community.
Its the next bailout if Obama gets back in. He won’t be able to do it while campaigning since its a sure loser for him.
Simple solution. ALL government employees are immediately put into a private pool with companies like Goldman Sachs and others underwriting it.
This forces these companies to perform for every administration and takes the cronyism out of the game. It also take politics and unionism out of the game, because there is no longer contracts to negotiate.
And it frees up billions in government money to lower taxes for the people.
For decades, politicians nationwide have purposely underfunded pensions to preserve enough funds in the general fund to buy votes. It’s simple: politicians agree to terms with the unions (reliable voters) then the pensions are underfunded so politicians can get reelected. By the time the fiscal crisis hits, the polticians who agreed to the contracts and underfunded them are now retired with the same types of generous pensions the other public employees have.
What about states that have no income tax for anyone? Would you have them enact an income tax? More taxes is not the right answer in any case. Less spending is the answer.
Disclosure - I live in Illinois and Illinois does not tax my retirement income.
Illinois gets in my pocket in every other way imaginable and we are one of the top states in underfunded pension liabilities. States are legally bound to pay what they have promised to retirees, some cases, in writing. What states and other government entities are learning and it should have been obvious from the start, is that regardless of legal obligations, that if the money isn't there, it simply isn't there. The very least they could do is stop making promises that obligate future tax payers and can't realistically be met any way but new or higher taxes is never the answer.
Making rash promises is how politicians of every stripe stay in elective office, in my state it's predominately democrats that do it but it isn't simply a democrat problem, republicans do it to, just much less so in most cases.
Gingrich is behind and about to lose Florida because he's telling the truth and the truth scares old people to death. Old people and people feeding at the public trough.
“...there are three things in life I am sure about... Death, taxes and the direction this country is headed.”
Well, after trying to pay the taxes to fund 0’s green, socialist utopia,
I think death will be just a tired feeling...
The law can change. WI did it. With a Republican governor (marginally) and legislature, PA can do it, too.
The only choices are to lay off government workers, cut services or change the law as WI did. States cannot print money and states will not get a bailout from Uncle Sam (i.e. Obama). The GOP House will not pass a state bailout (at least, they had better not).
ZIRP hurts these pension funds as well as it hurts anyone who keeps their investment/retirement income in a low risk place.
The base salary for a Pa. legislator is $82,000.
A hack is a hack is a hack regardless of the party.
The Republicans control all branches including the state Supreme Court.
Do you mean
Arbeitserziehungslager = labor camp