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10 June 2015

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Russ Steele

If the government does not have the money, do they have to pay the promised pensions?

New Jersey's top court sided with Gov. Chris Christie on Tuesday in a legal fight with public worker unions over pension funds, sparing a state budget crisis this month but leaving unanswered questions about how the state will pay for the promised pensions as Christie prepares to announce whether he'll run for president.

The state Supreme Court overturned a lower-court judge's order that told the Republican governor and the Democrat-controlled Legislature to work out a way to increase pension contributions for the current fiscal year, which ends June 30.

A decision in the unions' favor likely would have sparked a contentious scramble to come up with billions of dollars that Christie has repeatedly insisted the state doesn't have, while drawing additional attention to New Jersey's fiscal problems, which Christie's rivals are sure to point to often if he chooses to run.

In a 5-2 ruling, the court said that state constitutional provisions calling for an annual budget process trump a 2011 law requiring high pension contributions from the state.

Bottom line, if State does not have the money, they do not have to fund the pension plan. The question is, could this same ruling apply to California pension holders. If I were a Nevada County government employee, I would be worried.

Russ Steele

Where are the liberal crickets?

George Rebane

RussS 552pm - I think you're hearing the liberal crickets. The data has been there for years. Public pensions were negotiated by our elected dummies and scoundrels, most of whom are long gone. We are holding the bag whose dimensions have been long described, most recently here by Rich Ulery. Against this data there is little to be said by those who believe in public retirees über alles.

Bill Tozer

Not a day goes by when there isn't some unfunded pension liabilities in the news. How long and how far can be kick this can down the road?
Not exactly on topic concerning local county woes, as well as not the best article on the looming awakening of Hungry Sleeping Giant, but sheds insight nonetheless. Big ouch coming for us non pension recipients who will get left holding the bag.

http://www.marketwatch.com/story/whos-responsible-for-the-chicago-teachers-pension-fund-2015-06-10?siteid=yhoof2

Bill Tozer

Ok, I got lazy. Just hit RR's link to Pensionwatch and copied the first story. No bad. "I think what we have here is a failure to communicate", he says swerving his car to miss another pothole.

http://unionwatch.org/retiree-with-183690-annual-pension-attacks-pension-reform/

Todd Juvinall

I heard Obama is trying to get reparations for slavery. Anyone else hear that?

fish

From another spot I visit!

New Book Offers Blueprint to Resolve America's Public Pension Crisis California Dreaming Lessons on How to Resolve America's Public Pension Crisis By Lawrence J. McQuillan

State and local governments across the United States are facing their worst financial crisis in years--a public-pension "tsunami" of epic proportions. Some, such as Detroit and Stockton, have already been forced to declare bankruptcy, but others, such as Los Angeles, Chicago, and the State of California, are still rushing toward the fiscal cliff.

How did the public pension crisis begin? And what will it take to resolve it?

These are questions that economist Lawrence J. McQuillan answers in his new book, California Dreaming: Lessons on How to Resolve America's Public Pension Crisis, published by the Oakland-based Independent Institute.

McQuillan offers a comprehensive solution that would resolve California's pension problem in an equitable and responsible way that would preserve pension benefits already earned, allow governments to provide competitive, defined-contribution pensions to public employees, and grant governments the flexibility needed to avoid making future generations pay for deals they didn't make. McQuillan's solution could be applied anywhere in America facing a similar problem.

Order your copy today!

And if you'd like to help us spread the word, please buy multiple copies for your family and friends and support our campaign!

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Praise for California Dreaming:

"Mayors, governors, and other policymakers around the country are struggling to maintain services while paying for the skyrocketing costs of public employee retirement benefits. California Dreaming explains why it is so difficult to solve this problem and identifies a key framework for solutions."

--Chuck Reed, former Mayor, City of San Jose, California

"Lawrence McQuillan's California Dreaming is a superb, wake-up call to all those depending on generous pensions from state and local governments--they simply won't be there, or at least in the amounts expected. The book is also a wake-up call to California taxpayers--who will be shocked to learn of the huge tax liabilities they face. McQuillan explains how governments have created this mess and offers sensible reforms to end the crisis and preserve retirement benefits--without bankrupting taxpayers."

--James C. Miller III, former Director, U.S. Office of Management and Budget; former Chairman, Federal Trade Commission; former Executive Director, Presidential Task Force on Regulatory Relief

"California Dreaming is a horrifying must-read that exposes the steal-as-you-go policies driving the state (and our country) straight down the tubes!"

--Laurence J. Kotlikoff, William Fairfield Warren Distinguished Professor and Professor of Economics, Boston University; former Senior Economist, President's Council of Economic Advisers

"Notice the crucial word: "former." A former mayor recommends this. A former director of the budget recommends it.

Where were these guys when we needed them? What did they do when they were in power? They did what all officials do. Nothing. The model is former Treasury Secretary William Simon, who hired Edith Efron to write A Time for Truth for him to put his name on. His time for truth was 1974-76, when he was in office. Instead, he supported the U.S. bailout of the IMF. He opposed the re-imposition of the gold exchange standard. He went along to get along. You can buy a used hardback copy of his book for a penny, plus postage and handling. Don't bother. It's too expensive.

HOPELESS

The ad sounds good. Maybe there is hope.

There is no hope. No major city will apply the book's recommended solutions, whatever they are. No city council will hear of the book, let alone read it. No city manager will adopt it as his blueprint for reform. No municipal union will tolerate it.

The issue is moral. The voters want something for nothing. "Don't tax you. Don't tax me. Tax the guy behind the tree."

Voters prefer to stick it to the retired union members. "Retired? Tough luck, dreamer. You're not on our list of endangered species. We are."

That's why nothing will be done. The mentality of the Great Default is basic to our society. "Promise them anything that will keep them happy now. We can default later." This attitude begins with marriage vows, and it extends to every aspect of society.

Call it no-fault bankruptcy.

Trusting souls always gets hurt. Pensioners believed their unions' leaders back in their working days. "We can't get you higher wages, which are taxable today. But we can get you retirement benefits, which will be taxable when you are retired. Avoid income taxes now." The faithful members believed it. They used coercion to get their contracts -- the NLRB -- and they figured: "The taxpayers will pay. They have no choice." But the taxpayers do have a choice: default. And they will exercise this choice.

We have seen 50 years of this promise: "How to save Social Security." (We don't see this: "We can save Medicare." It cannot be saved.) But no one ever implemented the plan in "We can save Social Security." No one in authority ever mentioned it.

Decade after decade, we hear this: "We can still save Social Security. It's not too late." The defender of the status quo says this in response: "We didn't save it 50 years ago, 40 years ago, or 10 years ago, but you say it can still be saved. Someone will promise the same thing 50 years from now. No problem. Buzz off."

The Great Default from Washington will legitimize the mini-defaults locally. Municipal union members will get stiffed.

I guess I should feel bad about this. I don't. The state giveth, and the state taketh away. Be prepared."

Bill Tozer

Darn Fish, your paste was so long I had to scroll to the bottom to see if it was Paul or Ben or stevenfrirch or me doing another much too long incoherent monologue. But, nooooo, it was Fish spreading his wings for that long flight to Wal-mart to pick up 5 copies of the book. Are you going to share your books with the class?

fish

Posted by: Bill Tozer | 11 June 2015 at 04:39 PM

I'll save you the time William......whole bunch of civil servant retirees are gonna get stiffed!

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