This is the issue nobody is talking about. The unfunded pension crisis for states, municipalities and the federal government. As government has expanded exponentially, especially over the last 40 years, pension funds for government workers have received little notice. Every state has a major issue with this that is mindblowing. Lots of these long term employees will be retiring soon. Texas and its cities have a big problem. This is why Perry cracks me up as he tries to portray himself as the anti-government governor. A lot of the other big government states have the biggest issues...California, New Jersey, New York, etc. Below is a small post regarding New jerseys problem: By John Bury February 10, 2010, 7:11AM S2 was introduced last Monday looking to make changes to the New Jersey State Pension System based on some of the 41 recommendations made in 2006 that then-governor Corzine scuttled to placate the unions. In this multi-part series I will look at the proposed legislation in detail starting with some of the assumptions in that 2006 report that make their proposals suspect. Quoting from the Executive Summary: "New Jersey’s retirement systems have an $18 billion unfunded liability.....The State’s health care benefits unfunded liability is estimated to exceed $20 billion." Both assumptions are wildly off, even using 'official' phonied-up numbers. The unfunded pension liability was reported as $34.4 billion on June 30, 2008 and that number should rise to at least $50 billion when the June 30, 2009 reports are released. Using honest assumptions I get a deficit of $133 billion. As to health benefits for retirees a report released July, 2007 pegged it at $68.8 billion, far larger than any other state (New York at $49.7 billion and California at $47.9 billion were the only ones even in the ballpark) and those numbers would likely escalate with the demise of health care reform and insurers needing to recoup losses from bad investments. The major issue here is that the steps you would consider taking to solve a $38 billion problem are far different than those to solve a $250 billion (and growing) problem. Current participants must be impacted. Benefits must be cut....substantially. Anyone who can't see that becomes part of the problem. __________________________________________________ This is one of the reasons for the democratically pushed healthcare reform package. The "escalating costs of healthcare" bs pushed by Obama and his cronies was not for the people that have insurance, its for all the unfunded healthcare payments due all of the government employees. They spent and wasted so much damn money they couldnt even take care of their own. Now the private sector is going to get screwed again. We could tax everyone, every company, 100% of their income and not make a dent in our unfunded liability crisis.
This is a GIGANTIC problem. I saw one estimate of 3 trillion in unfunded pensions. Again, entitlements are going to absolutely destroy our economy. The only way out at the state and local level is to file bankruptcy and default on all their muni bonds. Show me a state where unions are strong and I will show you a state that is going to ******* die economically. Witness my state, Illinois. $61 billion in unfunded pensions. The numbers do not, and will not ever, work. Never. Here is how this works. You promise unions the moon because they will turn out and vote for you 100%. Problem is when the bill is due, you dont have enough people to tax to pay for all those promises. This is just a precursor to the Social Security crisis. You will not have enough productive members of society to tax to balance to books on the entitlements. You can print money up to a point at the federal level. Cant do that at the state level. This will absolutely get ugly. Very ugly.
According to the Texas Pension Review Board, more than 80 taxpayer funded pensions have unfunded liabilities that exceed $20 billion. The Link
I wouldn't call this an entitlement. It's more a deferred income. They save money in the short run by paying employees less with the promise of retirement money. __________________________________________________ I think they would call it an entitlement if they lost it. Government employees make more on avg. than the private sector american worker yet the american worker is footing the bill. Moreover, it was deferrred income, than some of that money should have been put away as part of a yearly budget. The government didnt do that. I received a partial pension for one of my jobs but it was funded by the corporation, the money was there, paid for by us. The day they try to go back and raise my taxesto pay for those pensions is the day things will get really ugly.
I am fully expecting my full pension, SS, and IRA payments when I retire. Unfortunately, I'm pretty sure a loaf of bread will cost $75 by that time, and my million dollar nest egg won't seem so significant.
I would be okay with pensions IF govt workers didnt become higher paid than private sector workers over the last decade. Its the worst of all worlds. The government especially is the employer of last resort and pay and benefits should reflect that. Moreover, public sector jobs have exploded while the private sector has trimmed. When was the last time you interacted with an exceptional government worker? You have bus drivers up here in Chicago that are retiring with six figure pensions at 55. There is never going to be enough money to make that work. Our public employers are that morbidly obese guy who cant fly on the plane. Hell the guy is too fat to even get on the plane without bringing it down. Overall, Texas is doing pretty well. You want to be long the right to work states and short the union states. Indefinitely.
I think its difficult to make the argument that govt workers make more money, yet the govt is an employer of last resort. Also, I would like to see some data regarding what govt employees make compared to their peers with similar qualifications. If it is more than the private sector, then I could see I problem. But, when you say that govt workers make more money on average, you start factoring in every burger flipper in America. Just to be clear, I am not defending six figure bus drivers and whatnot when you would have a line around the corner if you posted the position for half the salary.
The govt is the employer of last resort because the govt gets a lesser quality of worker. I know its a generality but nobody can seriously argue that point. Public sector jobs and comp have exploded. www.cato.org/pubs/tbb/tbb-59.pdf
it was one thing to supply pensions to teachers working for 35k a year, police officers, fire dept and millitary. They risk their lives for us daily and teachers provide a valuable service. But to provide these pensions to all government workers, especially those making 6 figures is rediculous. Government jobs used to be good jobs to go to and get lots of early experience, then leave. The head of HISD makes over 400k a year. She gets a pension paying her that much every year when she leaves. Its BS with a capital B.
As of 2007 the US Dept of Transportation had ONE person making 100,000 a year. Now, in the midst of one of the worst recessions in history, they have 1,600. And we are paying their salaries. Hey, dont take my word for it, take the Office of Personnel Management. This is criminal. 3.bp.blogspot.com/_otfwl2zc6Qc/S3FeVTGGqrI/AAAAAAAAMto/LEtQonC-IA8/s1600-h/fedemp.jpg
Here's another disconcerting article from a sharp guy Daniel Amerman, who talks about unfunded pensions and the rising inflation for baby boomers and how the value of your pension is going to be shot to hell. It's pretty sobering stuff. The US masses need to start waking up to the cold reality that our government has been and continues to perpetrate on its citizens. The Link
