Posted on 12/31/2010 9:43:04 AM PST by eagles
Mark Hemingway: America's public pension crisis has tragic consequences
By: Mark Hemingway 12/26/10 8:05 PM
When the police found the body of the town's 58-year-old retired fire marshal, the lights had been turned off in his house and he had no running water. He had no money to pay his bills and he was too proud to accept help from his neighbors.
Perhaps because he was so proud, the New York Times was polite enough not to use the fire marshal's name in their account of his death.
Welcome to Pritchard, Ala., where the public employee pension checks just stopped coming. As the Times reported last week, leaders of the city on the outskirts of Mobile had known since 2004 the pension fund was scheduled to run dry last year.
The city tried to declare bankruptcy, but state law forbids the town from ducking its pension obligations and a judge wouldn't allow it. The city just stopped paying its pensions. Pritchard's 150 retired city employees are reduced to showing up at city council meetings begging for money to get through the Christmas season.
For some years now, there have been warnings that the public pension crisis would sooner or later reach critical mass. America's public pension plans are underfunded by an estimated $3.6 trillion.
And the pension problem might be worse than that eye-popping figure suggests. We don't have a good handle on the scale of the problem because so many cities and states are either ignoring it or cooking their books to conceal it.
But what happened in Pritchard should send a message to the rest of America: It can happen here. We are out of money, and our many of our public pensions are already on borrowed time.
The biggest obstacle to preventing what happened in Pritchard from happening nationwide might be the public employees themselves. Public union leaders simply refuse to believe America is out of money.
Just last week, Chicago Mayor Richard M. Daley -- usually no proponent of fiscal austerity -- was begging Illinois Gov. Pat Quinn to veto a deal that would raise property taxes in the Windy City by $550 million to fund public pensions.
"This is the highest real estate tax increase in the history of Chicago and that's only for fire and police. If you put the other unions in there, it's about $1.2 billion in one year. ... This will really hit the people. How are you gonna sell your home even if you're retired? Who would want to buy your home? Buyer beware," Daley told the Chicago Sun-Times.
In Chicago, the unions claim they are making concessions. Police and fire fighters agreed to reduced cost-of-living increases, salary caps and raising the retirement age from 50 to 55. The legislature further offered a meaningless pledge to make sure their pension fund was 90 percent funded by 2041.
Is that supposed to be a fair trade-off? Taxpayers get sharp tax increases and can't sell their houses, but still pay for firefighters and police to retire with 80 percent of their salary and full benefits a decade or more before most Americans can even dream quitting their jobs? And pensions still won't be fully funded 30 years from now?
It's no mystery why the Times reported Pritchard "stands as a warning to cities like Philadelphia and states like Illinois, whose pension funds are under great strain." (Philadelphia is also raising property taxes 9.9 percent to fund pensions.)
If the busted public pensions in small-town Alabama make for a particularly tragic tale, what kind of misery is going to unfold when some of the largest towns and states in the country run out of money?
Mark Hemingway is an editorial page staff writer for The Examiner. He can be reached at mhemingway@washingtonexaminer.com. Get Email Alerts
Read more at the Washington Examiner: http://washingtonexaminer.com/opinion/columnists/2010/12/mark-hemingway-americas-public-pension-crisis-has-tragic-consequences#ixzz19i7ROUKQ
The rank and file? They haven’t a clue as to what’s going on (save the goons and the thugs). Who are the unions?
The “rank and file” have their heads stuck where the sun don’t shine (the ones who aren’t goons).
“It is a matter of faith among many union members that the company is keeping two (or more) sets of books.”
That’s what the rank and file tell themselves when they don’t want to think very much about it. That’s what the leadership tells them to cover their criminal activities.
“The Union leaders see things through a very blinkered ideological lens.”
The Union leaders, and their goons, will embrace the ideology that brings them the most power.
What happens if Social Security is means tested based on pensions and then pensions are cut?
Doesn’t say what he died of...did he flunk his death panel?
What the h*ll was he doing retired at 58? The vast majority of private sector people, who PAY for his retirement, can't retire at 58. They need their money in order to retire some day themselves.
I have been paying roughly $14,000 per year into the Social Security "lock box" for 20 years so that I can start withdrawing my Social Security when I retire. Give me back what I was forced to pay into the ponzi scheme system. Federal government employees on the old retirement plan never paid, and don't currently pay, a penny into Social Security so it is a retirement system, not a tax to help others. Otherwise all would be required to pay into it.
Obviously it still is for you. You don't understand interest and compounding. Please read up on it a little.
Slowly but surly, the private sector tax payers are becoming wise to the tens of thousands of these government payroll prostitutes who forgot long ago who the hell they're working for...
The private sector peasants are tired of being robbed and gang raped by government
The rank and file have nothing to do with “the unions”...it is the people in charge of the unions and others that are pulling their strings that are “counting on it”...
The union members are just cannon fodder to these miscreants, a convienent tool to use and discard.
There is no basis in law for calling SS a trust fund or giving any legally enforceable claim to future benefits. It is also not some sacred inter-generational promise since future generations were not even alive when the promise was made. It also is not due and payable because you were promised by some politician that it would be there for you. If you have a problem with that then look up the person who made the promise and make him pay.
At some point the amount of taxation (not contributions) needed will exceed what the workers are willing to pay or the economy can absorb and then changes will start.
So, start with means testing so that we can define SS for what it is WELFARE. Then cut off benefits after a date say 20 years from now. In reality its what most people under 50 expect anyway.
Until then be grateful for every dollar you collect.
In the case of the UAW it paid off big time since Obamessiah gave it to them in full.
The rest of us whether it is public employee pensions or SS payouts are screwed. There is simply not enough to go round for everyone to retire.
In the case of the UAW it paid off big time since Obamessiah gave it to them in full.
The rest of us whether it is public employee pensions or SS payouts are screwed. There is simply not enough to go round for everyone to retire.
Someone who gets it. Congratulations!
Well, that's the heart of the problem. Wonder how young he was when he retired.
As a matter of fact, it requires the math of a complete simpleton. Why don't you try adding in compound interest on all the cash you flushed down the toilet over the decades? Use an unrealistic, conservative rate if you wish. Then, knock off the "benefits" that would have been paid to the one or two people in your family who will unexpectedly drop dead or otherwise die by age 55, or 58, or 62, or 68. Whatever.
If you are still convinced that you and your family will get back more than you were forced at gunpoint to put in, then write a check to the US treasury and have yourself a party. But don't write any of my checks to the treasury, please.
In other words, "means test" yourself all you want, but don't try to pull that Nazi socialist Democrat scumbag "means test" stuff on me.
Thanks.
Now that's not so difficult, is it?
By the way, I completely agree with you that SS is a Ponzi sheme and a stealth welfare program at its core. It should be completely privatized, if it can't be abolished altogether. But as long as I have been forced to "contribute" my whole life, I want every last dime back that I can get. The fact that I worked hard and saved for retirement shouldn't mean that my social security benefits should be "means tested" and diverted to some lazy, irresponsible slug. Screw them. I am sick up to here of "the poor".
FRegards,
Lancey, the Old and Grouchy
Obviously it still is for you. You don’t understand interest and compounding. Please read up on it a little.
______________
SS is not invested in anything. There is no interest, there is no compounding. That is the problem. Our money was taken by the gov’t & pissed away & if any of us see it, then we’re d*mned lucky. At this point FedGov is bankrupt & can’t afford to pay us. And if we don’t want to see the total economic collapse of this country, then we’re going to have to do something drastic. Which probably means letting those with pensions from other sources forego the promised SS payout.
When SS was set up the average life span was 61 & the retirement age was set at 62. They didn’t expect many people to live long enough to actually receive SS. Now the average age is 78 years & longer. And there’s no way enough was paid in to sustain a person on ‘earnings’.
It was the NAZI’s who set up this ponzi scheme. And if you have any wealth at all, it will be taken from you to keep this scheme going. Unless we figure out something else, & it will either mean means-testing or just letting the gov’t collapse.
I’m getting so p*ssed off I don’t really even care anymore which of those happens.
Let’s start with a clear disclosure of optimistic, realistic and pessimistic estimates of how well funded each pension fund is, along with an idea of the likelihood of occurrence. And the rules for government pension disclosure ought to be no less stringent that private sector pension fund disclosure rules.
I heard though that the (union influenced) public pension umbrella groups oppose rules calling for increased disclosure.
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