| Welcome to The New Coffee Room. We hope you enjoy your visit. You're currently viewing our forum as a guest. This means you are limited to certain areas of the board and there are some features you can't use. If you join our community, you'll be able to access member-only sections, and use many member-only features such as customizing your profile, sending personal messages, and voting in polls. Registration is simple, fast, and completely free. Join our community! If you're already a member please log in to your account to access all of our features: |
| Two Americas: The Reality | |
|---|---|
| Tweet Topic Started: Aug 7 2010, 06:07 PM (98 Views) | |
| George K | Aug 7 2010, 06:07 PM Post #1 |
|
Finally
|
Two Americas: The Reality Earlier tonight I noted with some derision the "two Americas" of John Edwards' myth. However, as we have noted before, there are indeed two Americas: the fault line just doesn't lie where Edwards and other liberals place it. Rather, the key dividing line in American politics is between a strapped private sector and a flush, overflowing-with-cash public sector. Intuitively, it is odd: one might have assumed that those who pay the bills would look out for their own needs over the interests of those whom they employ. But this hasn't happened. A large majority of voters have been asleep at the switch, and public employees have been awarding themselves constantly-increasing salaries and pension benefits. Those benefits have now swelled to the point where there is no possibility that taxpayers can fund them. The situation has gotten so dire that even the New York Times has noticed. Its article is titled "Battle Looms Over Huge Costs of Public Pensions."
A trillion dollars; some say two or three times that much. This is the stuff of which epic political battles are made. One of the first such battles is shaping up in Colorado.
Note that all we are talking about here is reducing the rate at which the pensions of retired public employees will increase. This at a time when private sector employees are being laid off, seeing their salaries cut, and their investments have declined in value. The injustice is obvious. Yet the retired or soon to be retired public employees have a point: the law of contract. They took their jobs and worked for years or decades in reliance on promises by taxpayers (in effect) to, among other things, fund lavish pensions. Forever. Public employees all across America will sue to force taxpayers to make good on those obligations. The result could be significant demographic shifts, as taxpayers flee jurisdictions that have massive liabilities to former government workers. The result, presumably, will be municipal, county and state bankruptcy. I suspect that this is one of those fundamental societal divides that cannot be reconciled by applying conventional legal principles. My guess is that new legal doctrines will be developed to mediate between the legitimate but unrealistic claims of public retirees and the fiscal reality that the private sector is not rich enough to continue supporting those retirees in the style to which they are accustomed. But the struggle will not be an easy one. There will be many winners and losers along the way. For a decade or two to come, the division between public and private employees--in particular, retirees--will be one of the principal fault lines of our political life. =-=-=-=-=-=- I guess we can't just let them eat cake. |
|
A guide to GKSR: Click "Now look here, you Baltic gas passer... " - Mik, 6/14/08 Nothing is as effective as homeopathy. I'd rather listen to an hour of Abba than an hour of The Beatles. - Klaus, 4/29/18 | |
![]() |
|
| brenda | Aug 8 2010, 12:05 AM Post #2 |
![]()
..............
|
Huge issue in Minnesoooota. The Public Employees Retirement Account (PERA), the school teachers retirement fund, and other retirement funds in municipalities, such as Duluth, have all been asking for state handouts at a time when the state is trying to cut expenditures. |
|
“Weeds are flowers, too, once you get to know them.” ~A.A. Milne | |
![]() |
|
| Axtremus | Aug 8 2010, 02:40 AM Post #3 |
|
HOLY CARP!!!
|
OK, it's granted that public pension liability is a serious problem that should be addressed. If fixing it means reneging on previous promises and contracts, so be it. Private firms have done that to their retirees and pensioners, why not the public sector too? But then comes the bankruptcy threat to the public sector. Hello!?!?!? "Flush-with-cash" and "bankruptcy" don't go together. Such near-moronic incoherence just goes to show the author's lack of intellectual integrity when approaching the public debate on the issue. As for that "strapped private sector", consider this statement from Richard Fisher, president of the Federal Reserve Bank of Dallas: The $1.8T figure was referenced by Fisher in July, 2010. Go back to February 2010, and the cash reserve figure for S&P 500 companies was a combined $1.18T (source). You have a private sector, the S&P 500 companies, that piled up an additional $600B in cash reserves between February and July of 2010, that's a cash reserve growth rate of about $100B a month. Yeah, that's your "strapped private sector," alright. The author who wrote "strapped private sector" was likely fact-challenged, deliberately mischaracterizing the reality, or really meant to say "strapped-in-excess-cash private sector." |
![]() |
|
| « Previous Topic · The New Coffee Room · Next Topic » |








4:57 PM Jul 10