So the Times has a two part series on collapsing public pensions in the business section today, with a debate on what to do about it. What the debate doesn't say is that all "solutions" discussed involve younger generations becoming worse off, as taxpayers (due to deferred costs that have to be paid for with interest later) and public employees (lower compensation relative to those who came before). And that even if the pay and pensions of future public employees is slashed, public services are going to be completely gutted for decades — particularly if inflation doesn't devalue what is owed. No matter what. Done deal. And, or course, the massive debts run up over the past two decades are on top of that.
In the era of Generation Greed, "small government" Republicans and conservatives were consistently in favor of government-destroying debts and deferred obligations, in what some admitted was a "starve the beast" strategy to get rid of the public services and benefits that only the lesser people required. And equality of opportunity.
Democrats, pushed by their union backers went along because, it seems, they were so selfish they couldn't help themselves — even those who call themselves "progressive." Want to get a public employee union member mad? Speak of all the retroactive pension enhancements they grabbed in the past 12 years and the gutting of public services for others in the same sentence, violating their "right to rationalization."
I have three quibbles with the Times articles. First, they fail to distinguish between states where public employees do not get Social Security and contribute a lot to their own pensions (like California) and where taxpayers have shorted the pension plans (like New Jersey), and those where the employees get Social Security too, contribute little to the pensions, don't pay taxes to the pensions, and impose a cost that creates much higher taxes relative to income and inferior public services (New York City).
Second, the Times buy into the assumption that whatever cost must be born, it must be imposed on younger generations and future public employees due to "circumstances beyond our control." Rather than asserting perhaps the generational gang rape should be resisted by whatever means necessary.
Third, there is this sentence. "In virtually every case, the officials who granted the rich pensions thought they were offering something affordable, because the cost estimates were too low." No, this was not a mistake. The unions and those they keep in office sought out intentionally fraudulent cost estimates. The corrupt actuaries are no different than the corrupt accountants and executive compensation specialists pushing up executive pay, or the corrupt appraisers and bond raters who helped Wall Street pillage during the housing bubble. Get the right answer or you don’t get the job. Nobody’s gonna pay you to tell the truth.
Remember the quality of NYC public services in the 1970s, the last time the UFT had a 25/55 pension deal? I’ll concede that Lindsay made a mistake. Back then, younger generations were earning more at each age than those who came before, not less. Back then the majority of private sector workers received pension plans, not a small minority. Back then everything was for the young, so it seemed to make sense to give something back to those older. But those older have been taking more and more ever since, leaving future generations worse off, and today’s old and aging who were advantaged in youth are again advantaged in old age. And yet they want more and more and more. And refuse to acknowledge any link between what they take and what others lose, as if money comes from the sky – rather than being borrowed with someone else required to pay it back.
The first time was a mistake. The next time was a plan. The New York State legislature knew exactly what it was doing. They did this to us on purpose. Pataki, Bruno, Silver, Skelos, Spitzer – he of the 25/55 pension deal that was the last straw – and all the rest of the legislators. Giuliani and Bloomberg.
Good luck collecting taxes from working two jobs at lower pay whose children do not get a descent public education. From those who will know that they will face poverty and sickness in old age without Social Security or Medicare. Who no longer visit parks filled with trash, and get docked pay for arriving late on mass transit that often breaks down or roads that are falling apart. All while the police and fire departments no longer protect them – because they don’t think the people deserve to be protected because their pay is so low, with all the money going to the retired. The Republican idea seems to be that the rich will get their bonds paid even as the rest get nothing. But “liberal” is going to go back to its original meaning, opposition to government which is assumed to be an agent of the privileged.
What kills me is that a prior generation raped and pillaged New York City, and then moved out to the suburbs, taking pensions with them. The minority who stayed, and those who moved in since the 1960s, rebuilt this city. Lots of honest hard work and sacrifice was involved.
But the descendents of those who destroyed the city have since done the same to the entire state. And through working the system to create perpetual incumbency, they still control the city’s state legislative offices even though they in reality represent the interests of those in the suburbs, where the highest paid NYC public employees live, and in Florida, where they are going to cut their tax bill. They are like a rear guard keeping the outraged mob at bay while the pillagers ride off with their booty. They have gotten away with it by hiding the cost until the future. Well, it is the future.