According to the Wall Street Journal, “over the next decade, Mr. Bogle said stocks are likely to generate an average annual return, including dividends, of around 7%. ‘Your money will double in 10 years,’ he said. ‘How bad is that? People ought to get over the illusion [of higher expectations] and realize that they may have to invest for longer time periods, start earlier and save more.’"
That is an optimistic forecast. But New York’s public employee pension funds assume a much higher rate of return, for a mixed portfolio of stocks and lower yielding bonds. So politicians can avoid admitting how much they have harmed taxpayers and those who rely on public services and benefits, by retroactively enhancing the retirement benefits of those who already had the richest retirement benefits, as part of political deals. In New York they keep denying, even as required pension contributions soar and services are cut despite the nation’s highest tax burden. After all, those with privileges expect rationalizations to go along with them. Remember that when politicians and public employee unions organize protests against layoffs, cuts and pay and benefits for new hires, service cuts, fee increases and tax increases. And if you point out what has been done, they cover their ears and scream.
Of course when you tell the executive class that the false economy of paying workers less but selling more to them, with the difference funded by soaring debts and going to inflated executive pay, has collapsed, they don’t want to hear it either. And so it goes, as we approach institutional collapse with those responsible simply unwilling to acknowledge what they have done. After all, they were only seeking more and more for themselves, and didn’t intend to make others worse off. The proof? They never gave a single thought to the long run effects of what they were doing on anyone but themselves.