Author: Larry Littlefield

In our tell all society, there are still some things that the media is just not going to talk about. With all the argument over Paul Ryan's plan to eliminate Medicare, all the articles, all the analysis, there was virtually no discussion of the fact that Ryan proposes to spend even more on Medicare for those now 55 and over and cut taxes. So the debt would rise for another 30 years. And then cut Medicare funding far more than would otherwise be required for those 54 and under. There was one blog post quoting CBS news quoting the owner of this site quoting me. There was one brief New York Times column. A Wall Street Journal columnist wrote the exempting those over 55, the richest generations in U.S. history, from any "shared sacrifice" is what "everyone wants to do" because we need to pay for their promises to themselves. And that's it. No one asked why the same rules shouldn't be applied to the generations making the decisions as to those who will be sacrificed to pay off their debts.

And with all the argument over teacher layoffs, all the articles, blog posts, press releases and protests, no one else has mentioned the connection between falling resources for the classroom and soaring pension costs due to the 2008 deal to allow teachers to retire years earlier. Even with an independent actuary and a retirement research center both identifying the NYC teachers retirement fund as one of the most underfunded major plans in the country. I guess Generation Greed doesn't want to hear "we scored and future generations are screwed." And the mere truth has little standing in our society without some self-interested self promoter to speak it.

It measures the time until pension disasters two ways. On a termination basis, future money paid in by taxpayers and public employees is used to pay for the pension benefits that are being earned today, to ensure the non-retired will also get a pension. On an ongoing pensions, all the money paid now goes to the retired, including the money paid by current employees, leaving no money for their own pensions. So what happens to the NYC teacher pensions under that scenario?

Comptroller Liu released a report that claimed, media stories based on a press release said, New York City pension expenses have increased due to poor investment returns and not retroactive pension enhancements for NYC public employees. But that isn’t what the report, which contained little more information than a press release and no back-up, actually said. Liu claimed that 48% of the pension hole, which he is apparently prepared to admit exists, is due to low investment returns, and 44% is due to retroactive pension enhancements that were voted for by the state legislature in Albany. The rest is due to the fact pensions have automatically become richer for public employees, as they live longer in retirement relative to the years they have worked. For private sector workers, longer lifespans means living on less each year or running out of money.

Adding it up, 52% of the pension hole according to Liu is due to NYC public employees getting a richer pension deal at the expense of other people, the majority of whom are less well off. And just 48% is due to what he calls low investment returns. This is nearly plausible, but I have five main problems with it.

So Ryan is coming out with his proposal to eliminate Medicare and Medicaid. The details are sketchy at this point, and I’m not someone to deny that something has to be done and thus dismiss a proposal out of hand. Nor am I a Democrat looking for partisan advantage, or someone unconcerned with the deficit or the cost of government.

But I already know Paul Ryan and the Republicans are a fraud because no sacrifices will be imposed, and no changes will be required, for those age 55 and older. Which means those born in 1956 or earlier. Which means means those who were 17 in 1973, the year wages peaked for most American workers. The richest generations in American history, the first to leave those coming after worse off in the private sector, the ones that created all those deficits and debts and unfunded pension obligations in the public sector, the ones who wanted more senior spending and less in taxes, Generation Greed, gives back nothing. And there is a barely an acknowledgement of what this means in a moral sense. The plan is for the distinction between those under and over 55 never to be acknowledged, discussed and justified. With a help of the same media that is run by the same generation as government — and even the Tea Party. So entitled is Generation Greed that it is demands not only to get more benefits at the expense of those coming after, but also to have this hidden so they don’t feel bad about it. I’ll bet they’ll even say they are “doing it for the children.”

I just got an e-mail from the Center for Retirement Research at Boston College touting this report. The Center takes a very pro-public employee, pro-senior citizen position: there is "no choice" but to cut benefits for future employees and defer needed funding from the past to burden future generations of taxpayers as public services melt away. No way anyone who benefitted from retroactively enhanced pensions should be asked to sacrifice.  The title of the report is "Can State and Local Pension Plans Muddle Through."

Now I cited independent actuary John Bury's analysis of all state pension plans and major city plans that shows that the NYC Teacher pension plan is one of the most underfunded in the country. Now this from the CRR: assuming an 8.0% return (which is nonsense as I showed here), most plans have at least 15 years before running out of money under the termination concept and 30 years under the ongoing concept. "Notable" exceptions include eight plans mentioned, including the New York City Teacher's plan.

When I heard that New York City’s population did not rise as much as expected, my initial reaction is there must have been a large reduction in average household size. With the city becoming relatively more affluent, one might assume that fewer people were crammed into each housing unit. Or perhaps some of the roommates were not admitted to. With the large baby boom echo cohort moving out of childhood, however, I thought the share of housing units occupied by empty nesters might have risen.

But a quick look at average household size shows an increase from 2000 to 2010, reversing decades of decline. Which makes sense given that every generation is becoming worse off than the last, because of the last. Whereas the 1960s generation moved to apartments in Manhattan, my first NYC apartment in Kingsbridge, the Bronx was shared with three other people, one to a room. Now young people live four to a room. Nevermind.