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Monday, July 22, 2013

Taking the money from Paul to refund Peter

With the Detroit bankruptcy the media is trolling out the conservative line about public employee pensions being a burden and how we can't and shouldn't ever pay this money to retirees.

Let me say first off this is complete bullshit. This isn't money we need to pay to people who aren't working, this is money these people earned while they were working. This was a part of their contracts, this was a part of the deal we made to get their labor. We agreed to take care of them later as long as they worked for a little less now. Oh, and they needed to put their own money on line as well as their employers committing funds to the pension. This is their money.

If the pensions are underfunded the real reason for this is not that the employees failed on their part. It's that the employers often failed to send in their part of the deal (and in some case, send in the money taken from the workers' pay).

And while I haven't done a scientific study on this the exact same people who are saying public employees should accept lower pension payouts than they were promised seem to be the very same people who told us we couldn't deny Wall Streeters their bonus payments, deny executives their deferred compensation, tax capital gains as income, and every other scheme where the 1% also "take lower pay now for money in the long run" because, after all, they "earned that money." Even if canceling one year of bonuses, or denying one executives deferred package could fully fund the pension programs those same companies then dump on the taxpayer through the Pension Benefit Guaranty Corporation. And yes, many times one executive's deferred compensation and/or golden parachute payment could make most pensions full funded, and then would serve thousands of employees.

And did I mention that many of those mechanisms for the 1% are taxed at a lower rate than pension payments (except when those payments are so small the pension recipient qualifies for social welfare programs).

So when these conservatives (and they are almost always conservatives) talk about how these pensions are putting a large liability on government and your tax money keep in mind that as they're stealing money from these employees who have already earned it, they're also making sure all their buddies get their deferred payments. Finally, most of those people in public employee pension programs don't qualify for Social Security (also part of the deal they signed on to, but oddly never talked about as an option since we're changing the rules of the contracts they signed).

1 comment:

Steve Buchheit said...

Hey Anon, I don't allow link farming here. If you would like to repost without the link to your site, that would be fine. Thanks for stopping by.