Public Pensions
have long been one of the biggest economic problems that we face. Most public officials deal with the problem by ignoring it. Since their own pensions are important to them, their desire to avoid any reductions keeps them from paying more than cursory attention to the rising deficits.
Ignoring the problem won’t make it go away and will only ensure greater economic damage to more people, including them. In fact, pensions purchasing power generally go down because of inflation. If public pensions were reduced somewhere between 3 and 5% per year for several years, the problem would be reduced, if not eliminated. The reduction in inflation would translate to less reduction in each pensions’ purchasing power, and may actually increase the net dollars each pensioner has.
Pension reduction is the “third rail” of politics. Those receiving and hoping to receive generous public sector pensions are the most well-organized political groups in any nation. Their hostility to pension reduction must be met by showing that the damage to their own well-being is greater if pensions are allowed to remain as they are.
We quickly understand that we are dealing with greed, the institutionalized and well-organized demons of which demand “More! More!” from taxpayers. At the same time, they blind themselves to the realities that their continued demand for “More!” impoverishes their neighbors to the point that they will develop counter-organizations, as is happening now with the Tea Party movement. One basis for such movements is the awareness that the private sector is being impoverished to pay for far better wages, benefits, and pensions than they, themselves, have any hope of getting.
Most of us have no idea of how bad the problem is because those who do understand look at the numbers and see the tsunami coming. They whistle silently to themselves, and move on to something else. The only real, fair cure is a slow reduction in pension amounts.
The best way to tell if any candidate for office is honest is to see if he agrees that pensions must be reduced and has the courage to say so publicly. If he starts fudging, he’s not as forthcoming as possible.
