Time to stop. This recession is just a bump in the road compared to what’s coming.
And what’s coming is a Black Hole.
And into that Black Hole will go all sense of financial stability and The American Dream.
For years the so-called “public sector” has been working overtime to sell you a bill of goods to the effect that “public employees” get paid less but have job security. And the central tenet of that “security” is typically fully paid health care benefits and a guaranteed retirement program. The latter is the basis for a complete financial melt down that is going to make 9.6% unemployment look like the really good old days. Really good.
I’m not going to beat a dead horse on this subject, there’s been a whole bunch of stuff written – albeit not in the One-Party-Media – about the current and coming disaster. The stories looked like this: NJ Governor Christie told the NJ education association that they could avoid layoffs if they started paying a small amount toward their health care benefits. The NJEA said “No!” There are gobs of stories like this, and specifically dealing with the fact that “government jobs” pay roughly twice what the same job in the private sector would pay. Google is your friend.
Now, to the real problem. Pensions. In the so-called “public sector” the game that’s been played looks like this:
- Public employee unions like ASFCME spend millions on electing Democrats at every level.
- Make that statement above “hundreds of millions”.
- Those same unions then negotiate with either the elected officials they paid to elect or they negotiate with people appointed by said elected officials.
- The key isn’t necessarily wages and salaries, it’s benefits.
- “Management” gives “labor” a defined benefit retirement plan that “labor” can typically take advantage of after 20-30 years. A typical public employee can retire with full benefits in their fifties and go get another job. It’s called double dipping. And if said employee is working for another governmental unit he can build a second retirement plan.
- Employees typically contribute little or nothing to their retirement.
- The government frequently overstates the projected return and/or simply underfunds the retirement plan. They kick the financial can down the road.
- Here’s what the road looks like now:
There’s a change in the wind. There have been articles written about public pension shortfalls for several years. So far, it’s all been talk by the media – most notably Forbes – but mostly “new media”. Journalists who get paid to talk about this stuff have been silent. If I had to guess, they’ve been silent mostly because they’re Democrats. Well, things have made a sharp turn according to The Hill.
Labor groups will be invited to the U.S. Chamber of Commerce to talk about an alarming shortfall in state employee pension plans that some believe could lead to a new government bailout.
Randy Johnson, the Chamber’s senior vice president for Labor, Immigration and Employee Benefits, told The Hill the total shortfall for state pension funds could run as high as $3 trillion.
An August report by the Kellogg Graduate School of Management at Northwestern University found government pension programs in as many as 31 states are headed for financial disaster by 2030 and that taxpayers will likely wind up paying for unfunded liabilities.
“Even if states uniformly eliminated generous early retirement deals and raised the retirement age to 74, the unfunded liability for promises already made would still be more than $1 trillion,” Kellogg associate professor Joshua Rauh said in prepared remarks.
“Assuming states don’t start defaulting on their bonds and other debts, it seems that taxpayers will be footing most of the multi-trillion dollar bill for the pension promises that states have already made to workers,” he added.
So here’s the problem. 31 states are totally in the tank. The unions that represent employees who will be collecting guaranteed benefits are going into high dudgeon over the shortfall in those plans. And now the US Chamber of Commerce is signing on. Here comes the tidal wave.