I generally try to avoid simply discussing other people's information rather than creating my own, but there is a need for fair, non-ideological discussion of the most important issue in public finance and services, and I feel the need to call attention to it. From an honest actuary (how does he make a living?) on pensions:
"Generation X and Gen Y are getting fed up and might not take much more. That's what I'm hearing from a number of younger public employees who responded to my column last month on the incumbent employee conundrum. The gist of their feedback was this: They don't appreciate bearing the brunt of pay cuts and benefits reductions — the ones imposed by employers who try to balance the books on their pension and retiree medical plans by slashing compensation for younger employees and new hires. They'd like to see their elders share in the pain — or at least pay their share."
Here in New York, it isn’t just “baby boomers” who have come out ahead and post baby boomers who have come out behind, because our history of fleecing the city and state and leaving behind high taxes, diminished public services, and diminished wages and benefits for new hires, goes back further. The generations that enriched themselves with “Tier I” pensions 40 years ago left a bankrupt city with awful schools, and future workers with “Tier II,” “Tier III” and “Tier IV” workers. So the second half of the baby boom, the generation that came of age in the 1970s, was also screwed.
And now it is happening again, and not just on penisions.
Raise taxes and promise better schools. Then bring in earlier retirement for existing teachers and gut the schools again.
Borrow $billions and promise the Second Avenue Subway. And then have contractors raise prices, run out of money, and say we have to be realistic and can’t afford it.
Keep unemployment insurance taxes low for existing large companies while increasing benefits. Then have to borrow $billions in a recession, and jack up unemployment insurance taxes on anyone stupid enough to start a new company here.
More tax breaks for seniors, higher tax rates for everyone else.
Raise the Social Security retirement age for those born later jack up FICA taxes for their whole careers. Then spend all the surplus money, and tell younger generations they will have to pay more and accept less a second time to “save Social Security.”
A new Medicare prescription drug benefits for today’s seniors. Followed by those seniors protesting any health reform with the prospect of anything for anyone else.
On and on. Won’t take much more? What are they going to do about it? Our institutions are controlled by the Greediest members of Generation Greed. Reform seems impossible, and votes seem not to matter, even for those who bother to cast them, in government or in stockholder proxies. The consequence will be an institutional collapse.