The Future Is Here and Now

Today’s (Thursday, December 23) NY Times has an article that tells me the future has arrived and it is not going to be pretty. The pundits and those who want to destroy all aspects of public service have been calling and complaining for years that public pensions are going to destroy the universe. Never mind that those public employees have often foregone higher salaries in order to have those pension plans. Never mind that it is the elected officials who failed to properly fund those public pension plans, it will be the retired police, trash collectors, fire department employees and all the other municipal and state employees in their greed that are going to be the end of civilization. (That’s snark for the snark deficient)

But regardless of all the calls for austerity, and all the calls and drum beating about things needing to be done to “rein in out of control pensions,” it is not civil servants that caused the meltdown to the world economy. Civil servants have not been the people who took tax cuts and placed the bets in the Wall St casino. They did not commit the fraud in mortgage processing.

The fact is, a quick check of der Google using “public pensions” brings 3.9 million hits. Just the first page has this article from Business Week in June of ’05 blaming public pensions for a “crisis.” Then the drumbeat really picks up this year with this from the NY Times Magazine from back in June, this from a PEW site on States from August, this op-ed from former Labor Secretary Elaine Chao from October at the Christian Science Monitor, and this from a couple of days ago at CBS Money Watch predicting:

The traditional defined-benefit pension that is the dominant retirement plan for public-sector employees officially has a huge target on its back. And 2011 is shaping up as the year politicians begin to take serious aim at cutting promised benefits. What was a mere trickle of states and municipalities starting to address massive unfunded pension liabilities in 2010, which are now estimated to total more than $1 trillion, looks to grow to a torrent in 2011.

Obviously the politicians in these states seem to think that defaulting on their obligations, obligations incurred through good faith bargaining (at least, good faith on the part of the employees) are just so many faithless promises on their parts.

Back to the original article from today’s Times and we can see how the future is going to play out in varying degrees. This is the future that will be ours if the states default on their pension obligations and it will be ours if the recommendations of the Catfood Commission are allowed to be implemented:

PRICHARD, Ala. — This struggling small city on the outskirts of Mobile was warned for years that if it did nothing, its pension fund would run out of money by 2009. Right on schedule, its fund ran dry.

Then Prichard did something that pension experts say they have never seen before: it stopped sending monthly pension checks to its 150 retired workers, breaking a state law requiring it to pay its promised retirement benefits in full.

Since then, Nettie Banks, 68, a retired Prichard police and fire dispatcher, has filed for bankruptcy. Alfred Arnold, a 66-year-old retired fire captain, has gone back to work as a shopping mall security guard to try to keep his house. Eddie Ragland, 59, a retired police captain, accepted help from colleagues, bake sales and collection jars after he was shot by a robber, leaving him badly wounded and unable to get to his new job as a police officer at the regional airport.

Far worse was the retired fire marshal who died in June. Like many of the others, he was too young to collect Social Security. “When they found him, he had no electricity and no running water in his house,” said David Anders, 58, a retired district fire chief. “He was a proud enough man that he wouldn’t accept help.”

Now the Times article goes on to say that this town has been through bankruptcy twice so it’s not as if the people shouldn’t have been aware of fiscal mismanagement from their elected officials. But that would defeat the point of the article which is to beat the anti-public pension drums louder and louder.

Why do the public pensions look like they are such a give away? Because businesses have spent the past thirty plus years doing everything possible to destroy defined benefit plans in the private sector. Of course, people also tend to forget how many times for profit businesses have declared bankruptcy precisely so they could dump their defined benefit pensions on the federal Pension Benefit Guaranty Corp.

So let’s see where we are. Private pensions have been pretty much destroyed or made non-existent. Public pensions are considered fair game for demonizing. As Scarecrow notes, George Will and the Catfood Commissioners are intent on destroying Social Security

Never mind that workers likely don’t mind paying a payroll tax — the polls confirm they’d even support exposing more of their incomes to that tax — when it’s explained to them this is their savings that they will get back with interest via Social Security, unless people like Dave Camp and his new friends Simpson, Obama & Bowles steal it from them. Sounds like a perfect antidote to moral hazard.

So we are left with no jobs, no pensions, Social Security being cut/defaulted. But hey! We bailed out the banks!

The future is here and now and it is not a pleasant one.

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