“This, in my opinion, is the public issue of this decade,” according to New Jersey Governor Chris Christie as quoted by Bloomberg News. “Things that used to be sacred cows, that used to be the third rail, no longer are. They’ve been replaced by the unaffordability, absolute unaffordability.” He is referring to public employee pensions and retirement benefits, and I agree, unfortunately, that it will be the issue of the decade, and the morality of it will vary from place to place.
In some places, such as New Jersey, public employees have contributed a great deal to their own pensions, and it is the employer (former taxpayers) who didn't put in the required amount, to get more spending with less in taxes. In California and some other states, the public retirees do not get Social Security. Even in those places, however, the unions are guilty for cutting deals with the politicians to get undeserved, retroactive pension enhancements and collectively engaging in schemes to inflate pension payments relative to pay earned on the job. At the other extreme, with public service recipients and taxpayers nearly blameless, is New York City. And everywhere, Generation Greed has the same solution — solve the issue of the decade, caused by older generations making themselves better off at the expense of the future, by making younger generations worse off while avoiding politically difficult conflict by not asking those older generations to give anything back.
So as usual, with regard to the issue of the decade there is no one speaking for my point of view, and for the usual reason.
For the Manhattan Institute, Daily News and Post, representing those who do no rely on public schools, parks, transit, health care, etc., the quality of public services and extent of public benefits is irrelevant, save for the police. The solution is obvious: lay off public employees without seniority, the ones actually working, and gut public services in the short run. And slash the pay and benefits of future public employees to the point where only the worst work in public service, and allow public services to decline in the long run.
After all, the unions have shown they are willing to go along. Their goal is to ratchet down what the general public expects to receive in bad times, and then keep public services bad in good times, taking more in exchange for providing less. They only represent the grifters, the retired, and the near retired — not the majority of their members, who are forced to pay dues whether they like it or not. So they do one “screw the newbie flee to Florida” deal after another.
And the alternative perspective? Borrow as much money as possible as long as possible while allowing even earlier retirement for older generations “to save money,” hiding the future cost of past privileges as long as possible. And then raise taxes as high as they can go without setting off an economic downward spiral that might threaten the things that matter — pensions, retiree benefits, debt service, sinecure jobs, and special deal public services. And then gut public services and benefits for the general public. Or rather, allow someone else to do it while remaining silent. The silence you hear from the City Council right now.
What you don’t hear is anyone saying in the City Council and State Legislature is that older generations have taken too much, and those older generations — not future hires, not recipients of other public services and benefits — will have to give something back. Paying for their retiree health care. Paying more (or something) for their pensions. Paying the same state and local income taxes on retirement income as those working. More stringent means and needs testing of all those Medicaid and other senior benefits that New York City provides more of than anyone else.
What you don’t hear from the Mayor, any Mayor, is that past contracts that provided lower pay and benefits for new hires will have to be offset in future contracts, and that those on the wrong end of those deals should be informed — to create a little needed tension within the public employee unions. Too difficult and contentious. Better to victimize the easy victims. The same victims, over and over again. And not talk about it.
I just wish the media would stop repeating the lies. Pension “incentives” do not save money. Lower pay and benefits for new hires are not a better deal for the general public, since the competence and motivation of those new hires will be adjusted downward to offset it. While higher paid employees previously hired use it as an excuse. And new pension Tiers save no money for years, because there will be no hiring for years. Layoffs reduce public services at double the pace that they reduce costs. Because those working disappear, while debts, retirement benefits and payments to public employees with seniority who do not work, stay the same. And cutting public services is a ripoff for the general public just like raising taxes is, and by the same people. It is just getting less for the same instead of the same for more.
And I wish someone would challenge this “we have a contract” and “we just took advantage of the rules” mentality. By working the political system, they made a contract with each other and set the rules. They never told the rest what the contract really would mean for them, or even that it existed — a sellout of the future to benefit the insiders in exchange for political support. And now that the consequences are coming due, they say those who gained no benefit are on the hook. If that is the case, then I say I want bankruptcy. Shut everything down, lay EVERYONE off, and start all over with new local governments and new contracts.