Public Pension Punishments in a Progressive Posterchild

George Rebane

Illinois is a one of many states (e.g. California) that highlights the evils of progressivism applied wholesale.  It is worth holding up as an example of the latest problems with the trillions of dollars of unfunded public pension liabilities (much covered on RR) that are plastered over the nation’s fiscal landscape.  Today the state, a leader in corruption and crime, remains in a deep hole of public pension debt from which it hasn’t been able to dig itself out with past tax increases.  So now it’s time to raise them again.  (Here are some Illinois rankings published by their own Chicago Tribune.)

At issue is the replacement of the state’s flat income tax with a progressive version like we have in California – the more you make, the higher tax rate you pay.  And as in California, this has already caused an outmigration from the ranks of the state’s high earning residents.  But that makes no never mind to the public service employee unions like SEIU who are now being joined by some of the most misguided Christian clergy on God’s green earth.

The padres, priests, and pastors point out ‘For everyone to whom much is given, much will be required’ as the justification for the changeover from flat to progressive tax rates.  The fact that the Bible is silent on tax rates, and that the flat tax already takes much more from the high earners does not tarry long between the ears of these men (women?) of the cloth.  But what strikes me as their biggest sin, when they gather their witless flocks to demonstrate for higher taxes on the current earners, is their ignoring the morality of the whole notion of constantly taxing the future to pay the present for bad debts assumed in the past.

The unattainable pension promises were made purposefully and sub-rosa by sleazebag politicians working with scumbag unionists without any of their taxpaying constituents being told the extent of the benefits being conferred on the public employees and/or the liabilities assumed by the private sector workers and their children, some yet unborn.

When governments urge bankers to make loans to people who have no demonstrated ability, let alone hope, of even servicing their debt, then the country’s lamebrains are told to proscribe the bankers and their depositors, and give these money lenders government mandated haircuts.  But such an accusing finger is never pointed at government itself over the decades during which these Ponzi meisters piled up unfunded liabilities that now exceed $200,000,000,000,000 (that’s a two with fourteen zeros in its train).

So how should we look at those public employees with defined benefit or token contribution plans who stand to gain multi-million dollar pension accounts?  And what of those who are already sucking on that generous tit in the sky?  What do today’s taxpayers and their children owe these people?  Because of the enormously large number of dollars that are owing across the land, I’m afraid that pumping up current economy-killing tax rates (see below) and believing that to be a cure for what ails us is nothing but an empty article of faith now abetted by clergy with an extremely dim understanding of scripture.  Heather Wilhelm, former senior fellow at the Illinois Policy Institute has a more complete description of this Illinois movement that may be coming to a state near you.

And while we’re touching the topic of states’ economies, I’d like to recommend the just released An Inquiry into the Nature and Causes of the Wealth of States by A. Laffer et al, published by Wiley.  This tome, abundantly decorated with data, charts, and graphs, convincingly demonstrates “how taxes, energy, and worker freedom change everything” about where we live and what we do in these United States.  In this comprehensive effort “the authors have put together a solid case for lower state income taxes and decreased tax burdens.  Wealth doesn’t stay put.  Businesses and individuals in upper economic strata go where their interests are protected.  The result?  As this book demonstrates, almost every measure of economic prosperity at the state level – population, employment, and beyond – is linked to taxation.  Low-tax states in every region of the country are outperforming their neighbors.”

Comments

[Bill Tozer]

If a business person did what out elected representatives do on a daily basis, all private sector doors would be shuttered.

Can't add much to Dr. Rebane's fine post. Especially enjoyed the line "ignoring the morality of the whole notion of constantly taxing the future to pay the present for bad debts assumed in the past."

The Bible may not talk much about taxes, but does tells tax collectors to not rip off people. Honesty is the best policy. The Bible (Proverbs) indeed says a lot about the slavery called debt and even co-signing. That has saved me more that once from disaster.

So, I will exit this happy topic with an Obamacare song to cheer up the downhearted and lift their spirits. There is a parallel between public pensions and the song.
http://www.youtube.com/watch?v=Xv2UUcXCo9g

[Bill Tozer]

Fine post. Can't add a word to it. Especially enjoyed the line "ignoring the morality of the whole notion of constantly taxing the future to pay the present for bad debts assumed in the past."

This calls for a happy song about Progressive Poster children: Parallels are ironic.

http://www.youtube.com/watch?v=Xv2UUcXCo9g

[Bill Tozer]

Off to clear brush and eat yellow froggings. Oh, better stay on topic:

http://www.youtube.com/watch?v=-T2i9-0PL1o

[Bill Tozer]

I do recall Queen Nancy stating unequivocally that her proudest accomplishment after the first term when she took the gavel as passing Pay-Go. A female Speaker of the House was another historical milestone on our path to bankruptcy.
Yes, this ties into the crumbling state pensions as it has to do with debt, something the Bible says is an unpleasant thing with consequences. Same for co-signing. The borrower is a slave to the lender....don't co-sign or your very bed will be snatched out from under you. Bad juju. Wise Solomon. Bad government.

But, but, but....that was under Bush. The Prescription Drug Act is causing all of this. Seem to recall Queen Nancy voted for it to help all us po folk get our meds so we don't die in the gutter because of evil Big Pharma. Yes, that was then, this is now. Think the Bible did mention Jesus telling the tax collectors to stop ripping folks off and be honest.

https://www.youtube.com/watch?v=-T2i9-0PL1o

Now that I think about it, Common Core may indeed be needed if the former Speaker with that big gavel thinks the 1st Amendment gives us the right to bear arms.

There will never ever be enough taxes raised to satisfy the agenda of the Constitution shredding Progressives or funding state pensions. Never.

[Bill Tozer]

Sorry for all the posts that don't appear and then reappear. Redundant. Anyhow, back on topic:

http://www.washingtonpost.com/news/post-nation/wp/2014/04/24/illinois-is-the-worst-place-to-live-say-people-who-live-in-illinois/

In other news that could affect our own state finances:
http://finance.yahoo.com/news/toyota-moving-us-california-texas-182247217.html

"When you look at the whole package, it's difficult to be a business here," lamented Torrance Mayor Frank Scotto, whose community on the edge of the Pacific will suffer as the jobs migrate to Texas.

"If all these great, high-end jobs are leaving California, then we are going to turn into a place that's a retirement community" with low-paying service-sector jobs, Scotto said. "We can't have that," he added, warning that unless the state has a change of attitude, "it's going to be way too late."

This can't be good for those receiving public pensions hoping the taxpayer will bail them out. Darn those private sector types. They just don't stay put and count their lucky stars.

[Bill Tozer]

Easy to comprehend, hard to heed:

http://www.latimes.com/local/la-me-cap-teacher-pensions-20140428,0,6891680.column#axzz30FopJSNs

[Russ Steele]

How long is this sustainable, leaching off our neighbors? What if they decide to pull the plug on California?

California's oil production represents just 38% of its needs - and is falling steadily, even though the state has enormous onshore and offshore natural gas deposits, accessible via conventional and hydraulic fracturing technologies. The state imports 12% of its oil from Alaska and 50% more from foreign nations, much of it from Canada, notes Sacramento area energy consultant Tom Tanton.

The record is far worse when it comes to electricity. The Do-As-I-Say state imports about 29% of its total electricity from out of state: via the Palo Verde nuclear power plant in Phoenix, coal-fired generators in the Four Corners area, and hydroelectric dams in the Southwest and Pacific Northwest, Tanton explains.
Another 50% of its electricity is generated using natural gas that is also imported from sources outside California. Instead, the Greener-Than-Thou State relies heavily on gas imported via pipelines from Canada, the Rockies and the American Southwest, to power its gas-fired turbines. Those turbines and out-of-state sources also back up its numerous unreliable bird-killing wind turbines.

It adds up to a great way to preen and strut about their environmental consciousness. They simply leach off their neighbors for 62% of their gasoline and 79% of their electricity, and let other states do the hard work and emit the CO2.

[George Rebane]

Administrivia - Typepad's spam filter has gone hyper and I'm pulling out your comment posts as fast as I can. Please make it easier for me by posting the redundant ones you want deleted by listing their time tags. Thanks.

[Walt]

At least our LIBS haven't stooped this low yet... ( but give them time... Nov. is six months away.)
"Mike Dickinson, the Virginia Democrat who wants the House seat currently held by Rep. Eric Cantor, R-Va., is not on the ballot in his district, but continues to issue unhinged tweets as though he is a viable candidate. On Sunday, he urged his supporters to violate Virginia law and use the police to harass members of the Tea Party.

“Use the Supreme Court ruling to harass tea party members. When you see them call the police,” he tweeted. "

Remember what I said about a tattoo? " By any means necessary"