In vignette after vignette, this mash-up provides a helpful (and amusing) take on California’s pension fiasco:
It’s not easy thinking about government-enacted pensions, I guess. Everyone wants to retire young and well-off, and no one wants to appear stingy. But there has to be responsibility in how these things are set up.
I touched upon the subject earlier this week, in “Pension Declension.” Two of my commenters — Charles Sainte Claire and SkipppingDog — strike me as perhaps not quite getting why pension reform is necessary.
What Charles and Skipping aren’t saying is that a defined benefit plan guarantees a certain return whether or not the money has been invested to produce such a return. So, where does the money to pay the defined benefit come from?
Yep, you guessed it: The taxpayers. Future taxpayers who can’t even be blamed for having elected the dishonest pols who cut these fraudulent deals with the politically active and powerful public employee unions.
In the public sector, the pressure will then be off the workers and politicians to actually fund today what will be spent tomorrow. Which means embracing the sort of chaos now destroying states and municipalities in California and across these United States.
What about in the private sector? Did someone say “private” sector? Well, even in the private sector, it will be the taxpayers who get stuck with the bill.
To suggest that defined benefit plans are the way to go is to suggest that workers can have whatever they desire and some magic person named The Taxpayer will always be there to pay for it. It is to embrace fleecing future generations.
Of course, we’ll be told that it “worked well in the past.” In a manner of speaking. After all, Bernie Madoff’s fraudulent scam worked well “in the past.” Most rip-offs “work well” . . . that is, until the very moment when honest, hard-working people realize they’ve been had.