Paying People Not to Work
Pensions major drain on economy.
Throughout my spendthrift youth, my father was wont to remind me that money doesn't grow on trees. Yet it wasn't only me who apparently thought and acted as though it did. Everybody who set up a pension through their public or private sector employer was banking that the retirement Ponzi scheme wouldn't collapse before they got their share.
Too late; the scheme has busted. And this isn't part of the junk mortgage scam: This is the "shrink a 45-year-working-career-into-20-and-get-paid-for-the-next-40-60-years-to-goof-off" scam. Guiding economic principle: Working people, no matter how productive they are, can't support non-working people once the population of non-working pensioners reaches the tipping point. Case in point: The New York City Metro Transit Authority. "Twenty-and-Out" is the Union mantra among public service and private sector union employees across the nation.
Sweet deal, if you can get it. But who set that ridiculous standard? AM New York recently featured a half-page ad for New York correctional officers. $78,000 salary after 5 years (plus guaranteed overtime), full benefits from day 1, 10 years in and you don't even have to contribute to your own pension any more, and (guess what?) you can "retire in 20 years with 60% salary. People in their twenties will retire on 60% salary plus full benefits in their forties. All on your tax dollar. Same for cops, clerks, firefighters, maintenance and sanitation workers, you name it. Remember when a government job meant lousy pay?
A public school teacher teaches for 20 years and then retires on approximately half of his salary (spiked to average the last 3-to-5 years of employment) plus full benefits - more if he lasts 30 years and retires in his mid-fifties.
Bend, Oregon is loaded to the gills with retired teachers and other former public employees in their mid-fifties, who will be on the public dole as they play golf and fish into their 70s, 80s, and 90s. School libraries are closed, music programs scrapped, and other services curtailed, even as we spend more real dollars for education than ever before in the history of the planet.
The system must support the retired firefighter on half pay while it pays a working firefighter 100% of his or her salary and benefits to replace the retiree. Not to diminish or minimize the value and dedication of public employees, but the jig is up.
Michael Bloomberg wrote, in the December 18th edition of the New York Post, that the city has finally reached the point this year where it spends more on paying pensions and pensioners' benefits than on the salaries and benefits of current employees. With more and more Boomers retiring each year, this disparity and imbalance is likely to keep tipping toward the working and taxpaying few supporting the retired many for 20 to 30 more years. Where's the money going to come from to pay off the promises?
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