Posted on 07/08/2014 5:05:54 PM PDT by Kaslin
Retired city workers in the Liberal Utopia of Detroit are being asked whether or not they want the city to exit bankruptcy, by slashing retirement pensions and cost of living adjustments. Officials are urging retirees to agree to a 4.5 percent cut in pension payouts, and an end to COLA. Unsurprisingly, some former city workers are less than thrilled by the idea of taking a pay-cut in an attempt to lessen the city’s debt obligation.
Now, I understand the retirement pension of an average city worker is not amazingly lush in the city of Detroit; but (and this is a purely economic observation) such poor choices are primarily the consequence of being the major creditors in a poorly-managed municipality… In other words: This is what happens when you depend on liberal government for your livelihood. Heck, if Detroit was a financial institution we would see Occupy Wall Street protestors demanding the forfeiture of every policeman’s pension within the 142.9 square miles of Detroit’s geographical footprint.
But, I guess things are a bit different when we’re talking about publicly elected snake-oil salesmen running a major metropolitan area into the ground. After all, Detroit politicians have been employing the same big-government spending campaigns as Chicago, LA, and New York for decades… Why on earth would we expect creditors of such a spending spree to suffer the consequences of deficit finance, right?
The truth is, this isn’t a matter of public employees taking a cut to their pensions. Nor is it a matter of Democrat promises being broken. This is merely the result of dependency on government. Reliance on any big spending city budget tends to be anchored (whether liberals want you to believe it or not) in fiscal reality. At the end of the day, the promises made by government are only as solid as the financial reality backing said promises.
Just like Solyndra, government contractors, or a Social Security beneficiary depending on the continued funding of a bankrupt “pay-as-you-go” system, Detroit retirees are at the mercy of the deficit they voted into existence. It might not be “fair”, but it is the fiscal reality of the real world. After all, pensions based in private companies go bankrupt all the time… And such a result is generally chalked up to the consequence of mismanagement and executive incompetence.
Well… Welcome to Detroit.
Now, there will be a number of personal tragedies that unravel in this mess. But, it would be good to remember what, precisely, is responsible for the destruction of so many retiree accounts: Big Government, decades of Democrat politicians, and government over spending. In other words: Those big-mean liberals used Detroit tax dollars (present and future) as a slush fund to implement their form of statism. Well… Kinda like splurging at a Vegas night club, the bill eventually comes due. But, in this case, whoever is left at the end of the night will suddenly find themselves responsible for a half century of Democrat expenses.
Yeah… Most of these retirees simply put in their time for the city, and don’t (necessarily) share responsibility for driving the general fund into an accountant’s debt ridden nightmare. Now, just imagine how much better off workers would have been had they been given the freedom to invest their money as they had wished… I mean, heck, with a bankrupt government, and a dying city, it would be hard to imagine doing worse in the free market. (Of course, I guess they could have invested in Solyndra, or Abound Solar.)
Unfortunately, the bottom line for would-be beneficiaries of Detroit pensions, is that the city doesn’t have the money. And, really, isn’t the idea of modern-day liberalism focused on “spreading the pain” around? Well, congratulations Detroit: You’re finally seeing the cost of Big Government in actual dollar amounts. I know: It’s far more fun spending the money, than paying the bill… Welcome to the real world of finance. But, don’t forget what John Maynard Keynes pointed out when advocating for increased government spending: “In the long run, we’re all dead.”
Of course, he never said we’d be able to afford the coffin.
The retirees were promised too much in many cases.
Low-information workers.
Detroit public employees got rich of Detroit government mismanagement seems only fair.
Are they figuring in the effects of the Death Panels in the fiduciary calculations?
If not, the long term scenario is probably better than predicted. Every year sliced off the lifespan is a big plus for a pension plan.
I’ll bet their pensions are pretty good no matter what this article states....any govt retiree with a defined pension has a huge gift on the backs of taxpayers and they must know that.....so no sympathy from me....
"Promised too much" hardly describes it.
Its more like the unions manipulated and blackmailed the politicians, while sticking it to the taxpayer to receive benefits that could never have been paid.
While I think the individual retirees are the least guilty of the guilty parties, its still going to cost them something.
Union members nationwide should be asking themselves if the deal they’re getting is too good to be true.
If they won’t help their city, they are not good citizens.
Besides, who in TF retires after 20-25years of work, at 80-90% of their highest wage earned in a year or the top three highest years?
well they voted for it, now they can pay for it
“If you like your retirement, you can keep your retirement. Period.”
Exactly. This is such a horrible situation. The Dems promised government workers rich, unaffordable pensions to buy their votes. The workers should have known better and saved more. But now that the Ponzi Scheme has fallen apart, these workers old and not in a position to work to earn the money they should have been saving. So they are screwed. Sure, its their own fault, but I don’t want to see them starving. It makes me so angry at the Democrats that they created this horrible situation to buy votes. They disgust me.
Everything Obama says should have an asterisk after it.
It must end. Such debts are illegal under almost every state law. Budgets are not being voted on by currently elected councils but by benefits offerings of the past.
Harry Reid would refer to such sacrifices as “Patriotic.”
They could make it more enticing for these workers to accept these pension changes by sweetening the deal: Give each retiree a free Detroit home! They could have the option of buying it for their full market value of $1 or $2... but, because they are understanding ex-municipal employees... Homes for FREE!
Thank you Michael Schaus for not putting ‘tic’ on the end of the word Democrat in your title.
The government of Detroit and been anything but democratic for years and years.
I have real mixed feelings about hurting the retirees to ‘save’ the city. Looks to me like no amount of money can ‘save’ Detroit.
There is a lot of pressure for them to settle. It is bankruptcy. So if they don’t agree the judge can and will impose a settlement which may be less.
A 4.5 percent cut doesn’t sound too bad considering how they were over-promised in the first place.
That’s true (employees promised too much), and bankruptcy is actually healthy. Detroit is finally getting a much needed wake up call that OPM (other people’s money) eventually runs out. Our nation is headed for a similar wake up call. We’ll all be millionaires of course, but what good is that when a million won’t buy dinner? Even the Ryan budget plan didn’t purport to balance the budget—much less spend down the debt—for something like a decade. Our leaders don’t know how to extricate our nation from Detroit-style overspending, and the end result will probably be worse.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.