The people are willing to allow unions to run rampant until they actually tread on our toes. At that point, we win and they lose. The public sector employee unions are stomping ever closer to the toes of the taxpayer. Don’t think for one second that we will live a life of poverty and penury so they can live as wealthy, retired monarchs.
(Shamelessly stolen from Monty, who regularly brings a buffet of doom to Ace of Spades that you should read regularly lest your urge to horde your
pennies silver dimes ever wanes.)
It’s hardly news anymore that public-sector pension promises will be made good (or not) on the backs of taxpayers, but I still think that the average private-sector packmule has no idea of the amount they’re going to have to pony up to vouchsafe the various municipal, state, and federal pension promises. The amount required over the next several decades beggars the imagination. In fact, the amount is preposterous: there’s no way the money is ever going to be paid out as promised. Even if it were mathematically possible (which it isn’t), taxpayers would revolt over the massive increases that would be required. If I were a public-sector worker, I’d be making a point of saving every dime of my own money that I could, because that fat public sector pension is unlikely to ever be paid out in full. (And I’m not even getting into the healthcare benefits, which are even more onerous than the pension benefits.) Basically, the bedrock truth is this: money that can’t be paid out, won’t be, no matter what agreements were signed or what the courts say.
That is his summary of this article, entitled More Pension Truths and Why You Should Be Very Angry, a portion of which is excerpted below. The public employees unions have persuaded our bureaucratic overlords that they have fleeced us, but possession is 9/10th of the law and I’m not convinced they will get our drachmas in the end.
Let’s look at the taxpayer’s responsibility another way. Sandy, a teacher I know, worked for 24 years in CA and retired at age 61. The amount of money she contributed into the system at retirement (including interest accrued along the way) was about $150,000. Sandy started collecting a pension of about $40,000 year (plus a yearly 2 percent COLA increase) for life. Whatever interest this money accrues over the next few years, Sandy’s contribution will have evaporated in about four years. So, at age 65 she will start living off other people’s money – whatever the “employer” (i.e. taxpayers) kicked in, whatever the “government” (i.e. taxpayers) kicked in and whatever is left, the taxpayers will have to fork over.
Should Sandy live to be 80, 15 years of her pension will be coming from the taxpayer – about $600,000 worth. (Note: there are about 755,000 current and retired teachers in the state as well as another 1.6 million in the California Public Employee Retirement System who can and are taking advantage of this system.)
Teachers and other public employee pensioners need to come forth and be a part of the process. They need to recognize that pension fund managers are clueless Pollyannas and that their unions have conned them by insisting that the current system is sustainable. This cannot happen too soon. If we don’t do something in the near future, the state could conceivably go into default and we could see the current exodus of business owners and taxpayers become a full-fledged stampede if California’s fiscal malaise gets any worse.
I’m going to go out on a limb here and say, “That’s not going to happen.” California is notorious for their wishful thinking, their ability to deny the obvious, to obliviously march over the cliffs of destruction. I just wonder what’s going to happen when the world’s eighth largest economy goes belly up. I know if I were NV and AZ, I’d start working on a border fence well.