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The issue being of course those same voters were in many cases are the recipients of said pensions. And those who were not and still voted for such things enjo
by phil21 9y ago
The issue being of course those same voters were in many cases are the recipients of said pensions. And those who were not and still voted for such things enjoyed the benefits of cheap government services without having to pay full freight.
Now that they enjoyed not having to fund the pensions for 30 years, they are retiring and expecting the next generation to pay for them having their cake and eating it too.
I find it very difficult to really figure out where the greater moral hazard here lies. As you state this was a problem everyone knew about when setting these public pensions up and it was easier to kick the can down the road. You will find it very difficult to convince me that the average union member in the 80's didn't know the sweet deal they were getting. It was a trope growing up in the 80's/90's to hear adults talk about "scamming" the overly generous pensions systems of the day.
I think it's interesting public unions in Illinois advocated 30 years ago for enshrining pension benefits into the state constitution. That language was added specifically because the public unions knew the deals they were making with politicians were not fiscally sustainable.
At this point I don't see a good way out and something major will break at a societal level before it gets fixed. There simply is no way to pay for these promised benefits and still maintain local and state government at a functional level in many states. I don't think bailing them out federally is an answer either - again for moral hazard reasons. I also don't think quadrupling taxes on the next generation is morally any better either.
In many ways this discussion is moot. The math is so overwhelmingly bad in some places it's simply not fixable from the revenue side only. Everyone is going to have to share some pain here, and that includes those receiving benefits.
- crdoconnor 9y ago>I think it's interesting public unions in Illinois advocated 30 years ago for enshrining pension benefits into the state constitution. That language was added specifically because the public unions knew the deals they were making with politicians were not fiscally sustainable. More likely it was added because they knew that there would eventually be a concerted political effort to strip them of their pensions )and raid those pensions) by a combination of business lobbies and wall street. >I also don't think quadrupling taxes on the next generation is morally any better either. What is your moral objection to taxing unearned income at a higher rate?
- sseveran 9y agoWall St (well most of it) would not want to strip people of their pensions. There is too much money in managing the assets in those pensions and they would I am sure advocate for federal money to make up for the shortfall.
- kazagistar 9y agoIf you propagate debts far enough, you are effectively trasferring wealth from not-yet voters to existing voters. In other words, taking from those who don't have a political voice yet.
- crdoconnor 9y agoAll the more reason to tax unearned income at a higher rate, no?
- gaius 9y agoAlso known as Corbynomics
- toomuchtodo 9y agoBut there is reason to do this. Not-yet voters inherit society and it’s infrastructure. There is value in what they’re inheriting. We’re just arguing about the amount of the transfer at this point.
- sseveran 9y agoThe federal bailout is exactly what is going to happen. The Pew numbers are somewhat optimistic in terms of overall liabilities. My estimation (and its just that) is that when we really dig in we are going to find that things are much, much worse. Some states will have their budgets overwhelmed with pension costs and I don't think there will be the political will to say, "Well Massachusetts, best of luck. This is what you voted for and now the tab has arrived." Washington will also look at this as an opportunity to take more power from states and move it to DC. Of course they can also print/borrow money do this.