Bovie illustrates pensions’ impact with the example of a retired firefighter. He directly impacts his local economy when he uses his pension income to buy a lawnmower. The indirect impact of his purchase is an increase in income not just for the store where he purchased the lawnmower, but for every company involved in its production and distribution. When those companies benefit from increased income, they can hire new employees who spend their paychecks in their local economies, the induced impact of the firefighter’s purchase.
While a single firefighter buying a lawnmower is unlikely to have such a dramatic impact on the national economy, the combined force of the 10,000 baby boomers who will turn 65 every day for the next 19 years (according to the Pew Research Center) and begin retiring and using their pensions, make that pension ripple effect look more like a wave.
In addition to the impact on output, expenditures made from pension-benefit payments supported 6.5 million Americans and paid nearly $315 billion in labor income. Retirees’ expenditures of pension benefit payments contributed $553 billion to GDP and $134 billion in federal, state and local tax revenue.
It’s amazing. It’s almost like everything we’re hearing from Republican lawmakers about how America can’t afford to pay pensions is … total bullshit. It’s almost like even if all those fatcat union workers are spending their money on T-bone steaks, that still benefits … the cattle industry. Astonishing.
The lone comment on this eminently sensible argument is my favorite conservadouche thing ever:
This is true only if defined benefit pensions are pre-funded. If they are not — and they are not — the result is a net loss. They rob younger generations. Underfunded private pensions ameliorate that by reducing payments to pensioners, who share the risks. Government pensions do not, so they result in reduced services, higher taxes and threats to bondholders.
WELL THEN WHY DON’T WE FULLY FUND THE FUCKING THINGS? I’m sorry for yelling, but there actually is a solution to this, Mr. Almighty Taxpayer. It’s to start treating promises we make to those who work for us like we treat promises made to defense contractors and fucking pay them what we owe them. It’s to start acting like this shit is actually important, and be grown-ups, and stop braying about taxes and what we can and can’t afford while whole pallets of cash go missing overseas and nobody even ASKS where that money goes. I swear to God I can’t have a sincere conversation about this while we’re still dumping money down basically a wishing well in Afghanistan because somehow we only ever seem to get fiscally responsible when it’s time to fuck over somebody who works for a living.
x-posted at Firedoglake