Posted on 01/28/2012 10:38:13 PM PST by Lancey Howard
The pension bubble: It’s a well-documented, potentially disastrous phenomenon. State pensions for public employees are underfunded by about $30 billion, give or take a billion. That’s 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 — we’re talking really huge — tax increases and/or Draconian reductions in services. Maybe even the elimination of some. We’ve 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 one’s told him yet that the Legislature doesn’t respond to imminent disaster very well.
(Excerpt) Read more at phillyburbs.com ...
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...
ping
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
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