Walter Russell Mead, commenting on a piece at The Tennesseean, writes:
We’ve already seen what happens when these bets don’t pay off. A major factor in Stockton, California’s bankruptcy was its decision in 2007, just before the crisis hit, to issue $125 million in bonds to cover a shortfall. When the market tanked, the city was on the hook for millions more it didn’t have and wouldn’t be able to raise. The Tennessean mentions a 2010 study by the Center for Retirement Research at Boston College, which found that “most pension obligation bonds issued since 1992 were in the red.”
City governments trying to handle pensions is a microcosm of a larger problem: promises made by governments to state employees that cannot be backed up. At the city or county level, the problem is of pensions and benefits that last a lifetime for something less than a lifetime’s work. It’s not just cops, firefighters and teachers – The Big 3 of Emotional Argument when pensions come up – it’s all the worker bees that keep municipalities in order. The worker bees fulfill their end – they sweep the streets, manage the sewers, keep the streets safe, put out the fires etc – and they understandably expect to be rewarded with what they were promised.
[Yes, I'm generalizing here, but the point is sound.]
At the Federal level, the problem is twofold: Social Security is seen by the people of my parents’ generation (they’re both in their 70s) as earned – they didn’t volunteer to pay into it for the 40 or so years of their working lives, ergo, it’s not an entitlement. Social Security is evil for any number of reasons, the first being that people my age know we’ll never see it, the second being that the people of their generation believe they rightfully earned it, the last being it’s a trainwreck waiting to happen. Think of Algore saying the word “lockbox” and amplify it with the force of a trillion suns. It’s that bad.
Then there is Medicare.
And before long, we have more than $100 trillion in unfunded liabilities (the number I keep hearing of late is $117 trillion).
And that’s just at the Federal level.
Ratchet that down to the States and their workers and their pensions and benefits, and the Counties of those States and theirs, and then all the Cities, and you see a pattern emerging: politicians of all stripes enacting policies that will go sour long after the politicians who enacted them are long-gone. I’m still trying to figure out how the ACA aka Obamacare will end up being blamed on Conservatives.
Who’s left with the bill? Duh – the taxpayer! Me and you and everyone we know. Everyone who works in the private sector, owns businesses in the private sector and, my fear, has retirement money in the private sector – we’re the people on the hook.
The average American in the average City, County or State job didn’t ask to bilk the taxpayer, but increasingly one gets the sense that government workers don’t seem to understand they are paid in Tax Money. If one is familiar with small towns, one knows that the most-coveted jobs are government jobs. Where I grew up, a high school drop-out getting on the County road crew was like winning a small lottery. Your fat idiot un-screwable cousin getting a teaching job was like a burden lifted from the rest of the family – you can’t get fired barring the worst of the worst crimes, you’re employed for the rest of your working life, and then you retire to benefits private sector folk can’t fathom.
The real evil in this is the people at higher level Federal jobs who commit crimes against the American people – IRS All-Star Lois Lerner is the posterchild of this – get paid leave while they’re being investigated thus not missing their high-six-figure salaries, then get to retire into anonymity at a full, platinum Federal package.
As I’ve been wont to say on Twitter of late: Fuck this gay earth. This country is so doomed it’s not even darkly comic.