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
Powers of deduction seem to be destroyed. They have to know that one condition must drive another condition...hence:
broke government = can't pay the bills = no checks for pensioners...
...which seems to escape unions.
..when the unions start rioting here in America, I hope that normal people will not just put up with it....but actually push back.
I think SS should be means-tested. I know it’s not suppose to work that way, but we’re bankrupting that system, too. So if you have an adequate pension or means from some other source it only makes sense to limit SS to the needy.
I don't know what it is like now, but in California when my husband taught there 1961 to 1979 they did not pay into SS. So all they had was the teachers retirement.
You're on the wrong site.
Socialism is that way ----> to DUh. Have fun.
The goal of Ubama and the rats has always been to turn America into a fully unionized, socialist welfare state like France and many other countries of old Europe, where nearly everybody is essentially a government employee. Then, when "other people's money" runs out and some politician dares propose that the government-mandated work week be increased from 35 hours to 37 hours, or the government-mandated retirement age be increased from 55 to 58, the unions can go on strike and essentially close down the entire country - - until taxes are raised (yet again). Rinse and repeat.
“I think SS should be means-tested. I know it’s not suppose to work that way, but we’re bankrupting that system, too. So if you have an adequate pension or means from some other source it only makes sense to limit SS to the needy.”
That’s another step to penalize success and initiative.
If some decide to “voluntarily” give back their benefits, that would be his or her decision and not the gumint’s.
Do not be so certain about that especially for the rank and file. It is a matter of faith among many union members that the company is keeping two (or more) sets of books. The Union leaders see things through a very blinkered ideological lens.
I wonder why they don’t regulate them like they do private pension plans? My husbands plan has to by law (federal/state) and it’s own by laws keep large reserves they actually have to be funded. They actually changed the rules this year including the age, amounts, etc. because of the downturn.
I suppose it’s a political trick for government employee’s pensions because they would then have to come up with real money they couldn’t touch to fund them and people would know the true cost.
Congress does play a role in this the Democrat’s allowed some private companies exemptions to the funding and I suppose we will get stuck with the bill when those plans fail. That’s going to be tough because...
Pension Insurance Agency Reports $23 Billion Deficit
“When Mr. Grafmeyer was Greyhound’s lobbyist, he helped to secure the sponsorship of Representative Charles B. Rangel, Democrat of New York, for a provision letting Greyhound treat its pension plan as 90 percent funded, even if its assets fell to just 85 percent of future obligations.
Normally, a pension plan that dips below 90 percent for an extended time is considered underfunded, and the company must make special, accelerated contributions.”
http://www.nytimes.com/2003/06/22/business/pension-reserve-what-s-enough.html?pagewanted=4&src=pm
Our government should not have been allowed to steal the social security funds either wait until that comes home to roost.
I think SS should be means-tested.
You’re on the wrong site.
Socialism is that way ——> to DUh. Have fun.
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No, SS is actually socialism. When was the gov’t supposed to involve itself in our retirement accounts? If you get out more than you pay in (aside from capital gains such as you would receive if your investment went up in value)you are receiving wealth from someone else. The Dems have resisted calling SS welfare, but that’s what it is. It’s time to stop the lying & treat it that way.
My post on the previous thread was pretty much what you posted:
“I don’t know if Prichard is a good example of what is happening in other cities. Prichard has been broke and on the border of bankruptcy for a long time. It is probably 95% black and is and has been riddled with corruption for years. The crime rate is outrageous and it has virtually no tax base.”
Someone, I don’t remember who, didn’t get my point that this is not new for Prichard. In my opinion, the current economic situation, which is the cause of the problems with a lot of other cities, isn’t causing Prichard’s problems. I think they were so far gone already that they weren’t necessarily affected by this recession. I believe our black population estemates may be a bit high. I think it’s more like 85% black as they have annexed some outlying areas some which actually have an upper middle class white populaiton. It wasn’t nearly enough to save them, though.
The only way to retire from life is to go to a better life, in Heaven!
No amount of money can spare anyone the hazards of living in a society with no regard for life.
Here come the government employee sob stories..
Tell these SOB the private sector has been going through this for **YEARS** now....
That’s another step to penalize success and initiative.
If some decide to “voluntarily” give back their benefits, that would be his or her decision and not the gumint’s.
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No, SS isn’t a result of anyone’s success or initiative. The gov’t took our money & pretended to put it in a lock box. What we get back is usually far more than what we put in. It is actually redistribution - this time from the young to the old. Time to stop the nonsense. The only way to do that is force people to realize what it is & then start dismantling it. Means test & privatize.
Government employees are robbing and gang raping the American private sector
That's absurd.
Means test & privatize.
???
Are you trying to make my head explode? How do you reconcile those two?
The benefit you receive from SS is based and projected on the income you made while contributing to the system.
You are suggesting people who did well in their work and careers and have other resources should forgo their SS benefits by means testing. That penalizes success.
Won’t happen.
I’m all for privatization for future retirees...
58? Why can’t a 58 year old man work? I mean no offense to him, maybe he was sick, but it’s not like an 85 year old sitting in an unheated home.
Most of my family worked/is working well past 65, and some are not in the best of health, either. But they still work.
I will use myself as an example. According to my most recent statement from SS, I paid in $51,394 which was matched by my employer for a total of $102,788. Members of my family generally live well into their 80’s. Assuming I start collecting SS at age 62 & live until 85, receiving my estimated monthly benefit of $1,100(actually $1,138 on the statement), I will receive back $303,600 (23 years x 12 months x $1,100).
Privatize for everyone coming into the system now, or those relatively young. Means test for those currently in the system or about to retire (so the truly needy don’t end up naked in the street) & let those of us with state pensions or fat 401k’s take care of ourselves.
Now that wasn’t difficult, was it?
That’s some of the rank and file. Who are the unions?
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