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.
A large majority of those ‘poor pensioners’ were also liberal public employee union members and partisan liberal democrats. They made the mess, both by the ways they did(n’t) their jobs and by the way they ran Detroit’s politics for at least the last 50 years. Nail the hypocritical whiners! Send a message to their ilk all around the country that consequences are possible.
Manipulation and blackmail aren't necessary. Unions turn out the vote for rats, rats reciprocate by approving hefty pay and benefit increases. Rinse, repeat, every two years. You scratch my back, I'll scratch yours.
“...the unions manipulated and blackmailed the politicians...”
I’d call it collusion. We are talking about Democrats here. The unions colluded with Democrat politicians to carve out generous benefits in return for votes. It worked very well for both groups...until OPM ran out.
The city of Detroit and the American auto manufacturers: Numbers one and two on the Hit Parade of Liberal spending failures.
I don't see evidence they want to.
The "Ryan budget" itself was a gimmick. It would have no control over what future Congresses spent.
Why don’t the retirees sue the Democrat Party? The Democrat politicians lived high on the hog and left the retirees holding an empty bag. The Democrat Party has lots of money. Heck, Obama is going to a dinner in Texas where all the Democrats there are paying $32,000 for the meal. How many retirees could be paid with that kind of money?
We shouldn’t even call the retired city employees of Detroit “retirees”. If they aren’t smart enough to go after the Democrat Party, then they should be called “suckers”.
“Those politicians were willing participants.”
You beat me to it, but I see we agree. The unions weren’t manipulating the politicians so much as working together to plunder taxpayers. The education establishment is very much the same. They basically sell their votes to those politicians who can best deliver the goods. It has nothing to do with delivering better service to the community (as government workers) or educating the children. It’s all about payola.
What you said.
I’ve got lots of reasons to dislike Rick Snyder but I am really glad that he finally forced this to a head and brought it all out in the open. I just wish someone had done it 30 years ago.
Most people have defined contribution plans like a 401(K). Gov’t workers usually have a defined benefit plan, where they are guaranteed a certain amount of monthly benefits no matter how much was contributed, how the investments performed, or how long they live.
I say "tough toenails!". I certainly didn't vote for your mayors and city councilmen who were in charge of your pension funds. I certainly shouldn't have to pay your squandered pension now.
Politicians and public sector unions sit at the table and trade favors using taxpayers’ money. Politicians get re-elected, unions get feather beds, and the taxpayers are stuck with the check after politicians and the unions have sated themselves.
Public sector unions should be against the law.
The biggest problem I have with this is it treats the retired manager sucking up $200,000 a year the same as a retired janitor getting $17,000 a year.
The cut should be 10% off anything over $35,000 a year, with a $100,000 hard cap. COLA’s should be kept until reaching the $35,000 level. I would bet that would save more money and would better represent what pensions are supposed to do, give retirees a respectable, moderate level of income.
At some point the hog trough becomes empty and all the piggies squeal they are still hungry.
defined benefit plans are stupid, especially when the “worker” hardly contributes anything.
“Politicians and public sector unions sit at the table and trade favors using taxpayers’ money. Politicians get re-elected, unions get feather beds, and the taxpayers are stuck with the check after politicians and the unions have sated themselves.
Public sector unions should be against the law.”
Too true; what happened in Detroit is happening statewide here in NJ. A cop I know retired at 46 (had 25 years on the job), and now we’ll pay a nice pension to him for probably another 30 years. The taxpayers are screwed, and fleeing these costs.
4.5 percent cut
HAHAHAHAHA
“well they voted for it, now they can pay for it”
Exactly. They are getting what they voted for.
The main reason they don’t know is because none of them are educated and smart enough to handle finances.
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