From Pine View Farm

Pensions Pending 1

This is something that has been nagging at me for some time, but I wasn’t sure how to address it. Now a letter writer to the Philly Inquirer has saved me the trouble.

When politicians complain about the cost of retirees’ pensions, they often leave out the full term: “Unfunded pension obligations.”

It’s not the pensions. It’s the politicians who refused to plan for them, but instead have used pension funds for other purposes.

Unfunded state pension plans were, from the start, a fraud on taxpayers. By paying public employees partly in unfunded IOUs, they enabled state governments to claim that their budgets were balanced when, in fact, state liabilities were increasing faster than state assets. The unfunded IOUs were a promise by the state to pay part of the salaries in the future from future tax revenues, and thus a promise to raise taxes if necessary. They were also a fraud on the employees . . . .

The situation with social security is similar.

Social Security isn’t broke; it’s looted, sacrificed to the fetish against taxes citizens paying for the services they demand from the government.

Share

1 comment

  1. cassandra m

    July 9, 2011 at 11:23 am

    This letter writer is very good indeed.

    The difference with Social Security is that it is technically fully funded until 2030 or so, after that able to cover about 75% of its obligation.  Almost everyone getting a paycheck is paying into Social Security, and its pretty substantial surpluses have been spent by Congress.  Unlike these state pension plans, SS requires no matching or funding from the Feds.   I see efforts to scale back SS as an effort by Congress to not do the work to pay back what they’ve taken.