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.
Successful parasites are those that have learned to not take so much from the host that the host dies or sickens to the extent that nourishment for the parasites is constrained.
Many government parasites have ignored this reality and have overloaded the host with too many parasites and taken too much nourishment from the host. Consequently the host dies or sickens to such an extent that nourishment to the parasites is limited.
Such is the case with Detroit today. And that “sick host” condition will be coming to a city and/or state near you soon. And, eventually, to the federal government and its employees and contractors also.
bump
Detroit was run by communists, specifically Mayor Coleman Young (id. CPUSA for decades), and CPUSA supporters (City Councilwomen and then Chairwomen), Maryanne Mahaffey and Erma Henderson.
Both women later joined the marxist Democratis Socialists of America when the CP started its decline in the 80’s.
Other Detroit City Council members also had significant ties to the CPUSA and the DSA.
In 1975, Sen. Carl Levin (d-Mich), then head of the city council, gave the key to the city to a KGB-controlled “World Peace Council” delegation headed by Indian Communist Party leader Romesh Chandra. Photos available in the WPC’s booklet on this event and possibly in Trevor Loudon’s 2013 book, “The Enemies Within: Communists, Marxists and Socialists in the US Congress”, www.pacificfreedomfoundation.org.
The UAW was, for decades, run by the CPUSA and then by the Reuther Brothers who were associated with the Socialist Party and/or the Democratic Socialists. Walter Reuther was identified as a member of the CPUSA in internal reports to the FBI in the 1930’s. He later broke with them in the late 40’s and fought them for control of the UAW.
Rep. John Conyers Jr (D-Mich) was a member of a CPUSA Local, 600 as was he father, who later when with the Reuther faction.
Just a little history to give the main story some context.
Far too many cops and firemen earning in excess of $100,000 a year in pension checks, way beyond what is necessary to support yourself in retirement. There are lots of classifications getting $100,000 to $500,000 pensions - that's what should be cut. A lot of pensioners are living off pensions first received decades ago that are tiny compared to what is doled out now - leave them alone, it's hard living on $15,000 to $20,000 a year. Go after the big earners who sometimes receive more in retirement than what their standard salary was.
They destroy rights when they have cop badge priviledges, and when they retire and have no priviledge, they whine they do not have rights and are kicked like old whores to the curb.
why do i not feel sorry.It is what they signed up for and promoted their entire careers in crime.
Teachers? At least by me they take their 3 highest years...
Quite a Very Good idea!
Well, you’re right of course. Politicians are nearly all LAWYERS, not accountants. Why anyone would trust a lawyer to run anything is beyond me. They’re a necessary evil sometimes if one needs legal advice, but as far as running a business, I’d sooner trust someone picked at random off the streets.
Every time I hear stories like this I remember Margaret Thatcher’s words of wisdom about socialists running out of other people’s money.
95.5% of a pension is better than no pension at all.
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?
Nobody before work date starting 1980. Now it is 1 percent a year. So you work 20 years, you get 20 percent. You work 50 years, you get 50 precedent. You work 100 years, you get 80 percent....80 percent is the cap, but who on Earth is going to work 80 years or more.
Well when this started. They had to compensate the horrid salaries of government workers and they came up with a better than poor pension to make up for the horrid salaries. It was good until about 1980 and then they chopped the pensions and still paid crap. Today you barely get a pension and the pay is atrocious.
If only those retirees would just pay their fair share.
That someone picked random likely has more acumen; I read once that the Chinese government is made up primarily of men with scientific backgrounds and mindset. It would explain how they pinpoint problems, solve them, and don’t let principles or emotion get in the way of doing what has to be done.
Lawyers are groomed/trained/inclined to argue and debate and prove their point, which means there is no uniform agenda or cooperative mindset. This is why our government is so fractious and increasingly unstable. At least with accountants the numbers would be set up and there wouldn’t be any additional expenditure. The accountant’s mindset is centered on the bottom line and cost effectiveness and we’d likely end up with less government and a lot less waste. We’d also likely end up with better immigrants and a lot less problems with taxation. Until our government is loaded with less lawyers, I am certain that we’ll continue this perpetually conflicted government.
Agreed. And the irony of it all is that the janitor probably worked harder than did the manager.
Yes. I never understood why their wasn't some sort of cap on retirement pay. A maximum of 2/3 of your working pay would seem reasonable.
It's the unions. Police and fire unions are very powerful and exert a lot of influence. Regular workers have caps around 2/3rds of their pay, but police and fire often have a cap hovering near 100 percent. For example, a regular worker would receive a pension based on 2 percent times number of years of permanent employment, attained if retiring at age 60, with a cap around 35 years of employment. 2 times 35 is 70 percent, only if they worked to 60 years of age. If less, they are penalized. Often the penalty is a sliding scale of 1 percent at age 50 to 2 percent at age 60. Retire at age 55, you get 1.5 percent times years so if you worked 35 years you would get around 52 percent of your salary as your pension.
If you're fortunate enough to be a cop, you may get 3 percent times number of years of permanent employment, attained if retiring at age 50, with a cap around 32 years employment. 3 times 32 is 96 percent, for retiring at age 50. On top of that, they're often allowed to boost their salary by including overtime as part of the calculation, while regular workers cannot. So it's possible to get more than 100 percent of regular salary as a pension. The unions make the rules.
If they hold out long enough; Detroit’s failings will vanish in the tsunami of America’s...
OPM is the religion of the sheeple. Heck, I think I’ll make that my new tagline.
OPM is fuel for the FSA.
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