Across the nation, a rising irritation with public employee unions is palpable, as a wounded economy has blown gaping holes in state, city and town budgets, and revealed that some public pension funds dangle perilously close to bankruptcy. In California, New York, Michigan and New Jersey, states where public unions wield much power and the culture historically tends to be pro-labor, even longtime liberal political leaders have demanded concessions — wage freezes, benefit cuts and tougher work rules…
In California, pension costs now crowd out spending for parks, public schools and state universities; in Illinois, spiraling pension costs threaten the state with insolvency.
And taxpayer resentment simmers.
The politcos just don’t understand cutting current government services without dealing with underfunded public pensions is not only bad economics and bad politics, it will hurt everyone, including the pensioners, in the long run.
Imagine, for example, taking your family to a Yankee game and shelling out $200 for tickets, hot dogs, peanuts, beer and soda. After finally taking your seats just before the opening pitch, your hear these words from Paul Olden, the public address announcer,
Ladies and Gentleman, welcome to Yankee Stadium! Because of budget constraints, the Yankees and Red Sox will only be playing two innings today. Reggie Jackson, Don Mattingly, and Bucky Dent DO thank you for their pensions.
Nothing less than a freaking riot would ensue! We’re certainly not stating that public pensions are the only cause of the fiscal woes of state and local governments. The situation is further complicated by a lack of transparency. The public doesn’t have the time, nor the patience to listen to debates and obfuscation on what investment return assumption a pension fund manager should or should not use.
The Tea Party backlash could be, at least in part, the beginning of the coming intergenerational war that many have written about. We thought Obama’s election may have been the start, but the young seem to have taken a sabattical from politics, at least, in the November election. Can you blame them? Kentucky’s new Senator, Rand Paul, did, however, refer to Medicaid as “intergenerational welfare,” during his campaign.
Mish’s Global Economic blog has been all over this important issue. We’ve saddled the younger generation with massive debt and liabilities and now it seems they’re about to revolt. And, if they don’t, the markets will. The politicians have failed miserably in addressing these “third rail” issues and maybe its the just the way the system is rigged. And this not just an American issue, but a global one, and potentially more acute in other Western countries.
So how ’bout this for a New Year’s resolution. Maybe we baby boomers, who can afford it, start playing Top Flite instead of Titlelist. That is, engage in some burden sharing for our younger brethren. Take one for the kids. We’re fighting enough wars, let’s not have another one between generations.
The first Baby Boomer turned 65 today.