Public pensions are like paper currencies: They work well when managed by principled fiscally responsible people, if you can find them, but are vulnerable to political decisions to boost spending, cut income, and leave the program unsustainable for future generations.
Pennsylvania is a prime offender: Under former Gov. Tom Ridge (R), the state in 2001 boosted pensions even as it cut taxpayer support. (Public workers also pay more than 6% of their paychecks into the fund, but it’s not enough to pay all the future checks.)
To replace lost state revenues, the plans hired hundreds of expensive private-sector money managers, some of them political donors, to jack up assets.
That hasn’t worked. The result is a multibillion-dollar and growing shortfall between what the pension plans have amassed and what they’re going to have to pay hundreds of thousands of surprisingly healthy retirees for decades to come; along with rapidly increasing demands on taxpayers that are driving local school taxes up, outraging citizens.
Outraging citizens, natch, at all those greedy teachers and cops and firefighters and whatnot, who SO TOTALLY HAD EVERYTHING TO DO WITH THIS. Who should be punished for the shitty decisions made by politicians because hey, “we” all need to suffer, right? I mean, let’s share the pain, by which I mean you need to hurt so that I can feel properly superior to you.
The comments are perfect, too:
“Guaranteed-pensions” are unsustainable! Period. They are only “sustainable” due to the taxpayers. If they were only funded by those paying into them, they would be a small fraction of what they are currently, or not exist at all. Public school teachers especially are paid very well and have amazing health benefits. Why should the public also have to fund their pensions? The money that will be paid out by these pensions will far, far exceed the money that these employees will have paid in. A 401k or 403b is good enough for the vast majority of Americans, but not for the six-figure teacher in Lower Merion, Central Bucks, Council Rock, Wallingford-Swarthmore.
A country of assholes, indeed.
A.