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Not if it ends up costing more in the long run, like when instead of spending money on prevention it must be spent on disaster recovery. If the agreement was "W
by dwater 4y ago
Not if it ends up costing more in the long run, like when instead of spending money on prevention it must be spent on disaster recovery. If the agreement was "We won't give you this money now, and we won't rescue you later when it turns out you would have needed it" the attitude might be different.
- rayiner 4y agoIf any state is going to be demanding a federal bail out anytime soon it’s going to be blue states like Illinois and New York facing catastrophic pension burdens coming due.
- tptacek 4y agoThe federal government probably should not bail out IL and NY's pension systems, which are mismanaged. But have you done the math on this red/blue net dependency thing? I pulled up the numbers on proposed and theoretical pension bailouts, and then the net federal dependency numbers for red states, and it does not appear to be a close call. But I didn't look very carefully. Did you? Illinois has the highest tax burden in the country. We're not Greece. We are paying through the nose for, well, everything. We get 95 cents on the dollar for our federal taxes, and we pay a lot of those. Texas is a lower-tax state. It is, in some ways, better managed than Illinois. But it gets 20 cents back on every dollar it pays in federal taxes. It seems to me that the reason not to bail out pension systems is that they're long-term unsustainable, and that they're mismanaged, and something has to be done to stop the bleeding. But it's hard to argue that bailing them out would be a redistributive injustice. We subsidize the low-tax red states. (A comically similar microcosm of this debate occurs within Illinois, with rural Illinoisans regularly making noise about wanting to divest itself of Chicagoland. Go right ahead, Peoria!)