Monday, December 05, 2011

The Wichita Bureau on the 99 Percent

UB's Wichita Bureau is no fan of the one percent, but he directs his attention elsewhere:

When is the lower 99 going to figure out that we've been screwed by the 'greatest generation' - which having survived the war seems to have decided it was entitled to life time care - and proceeded to vote it. Aren't most of our real problems - public pensions, social security and Medicare (including long term care) - a result of the greatest voting themselves (and now the Boomers) a great retirement? I have only one friend who is willing to admit that he will take a cut in his pension to help out the fiscal problems - my brother (Retired CSRS annuitant) is adamant that he won't give up anything - he earned that pension.
I agree with a lot of this (and both Wichita and I are, of course, in different ways riders of this great wave).  But I can think of complications.   One, recall that the first pension train wreck involved not public pensions but private--or more precisely, "public company," as distinct from "sovereign." Indeed, I suspect one reason so many non-enjoyers are so shirty about sovereign pensions today is they saw their own (or their parents') dreams immolated in the notorious round of defined-benefit failures back in the 80s and 90s.  Two: whatever Wichita's brother may think, it ain't gonna happen.  Lots of public pensions are nominally a "fund"--a trove  of securities assembled as part of the the compensation package over a career.  Few or none of these funds are really solvent.  Degrees of solvency my run from "more or less, okay, maybe" down to "man the lifeboats!"  (Illinois).  Many/most also have a backup put option from the sovereign, but when time comes to honor the put the sovereign will find a way to say "no."  In counting pension largesse, I'd say we ought to mark to market.  On that standard, the greatest generation is not quite so great after all.  


dilbert dogbert said...

I respectfully suggest some readings of Dean Baker. He says that if we spent what other developed countries do on health care we would be facing long term budget surpluses. Get our health care spending under control and our reduce our commitment to police the world and then lets talk about pensions, Social Security and the other social safety net programs.

Anonymous said...

health care costs is an essential element in this problem. single payer a la canada would cure a lot of the problem. really prosecuting pension crooks would help some. public employees retiring in their 40's -- got to stop as well as public employee monster pensions. i've got fed retirement, plus social security.