Public Pensions: An Economic Time Bomb

Public Pensions: An Economic Time Bomb


I want to talk to you about three words that
should scare the heck out of you, especially if you’re young: public pension liabilities.
Okay, I know you probably have about a hundred things you’re worried about, and public
pension liabilities likely aren’t one of them. But that’s the reason this is so scary—because almost no one is paying attention.
Unless you’re okay with your city going full Detroit and giving more of your hard-earned
money to pay off someone else’s debts, stay with me. So what is a public pension liability? A pension is a guaranteed, lifetime payment
to someone after they retire. Pensions used to be a big deal in the private sector. Every
major American company had them. But they became too expensive, and companies have taken
steps to phase them out. However, pensions still live on in the public
sector—among employees of the government— and they’re eating city and states’ budgets
alive. More and more money that could go to tax cuts or better services is instead
being shoveled aside to pay for these benefits. Why is this happening? Over decades, politicians
have promised trillions of dollars in pensions to government workers. That includes police,
firefighters, teachers, and city and state officials. You name a government job, and
there’s a pension associated with it. Now, you may be wondering, “How big are
these payments?” Many pensions are quite large. In California, more than 62,000 retired
public employees are receiving pensions of over $100,000 per year. Sometimes, it’s
even crazier. A retired New York City sanitation worker is getting $285,000 per year. A retired
county administrator in California receives over $400,000 per year. Remember, these are guaranteed lifetime yearly payouts. Now, we love our public employees. They do vital work for our local communities and the
wider society. They deserve competitive pay and retirement benefits. But currently, many
cities are, in effect, paying for multiple public departments at the same time: the department
that’s working now and, because people are living longer, a generation or two of retirees.
The system amounts to a self-perpetuating, corrupt merry-go-round. Public-sector unions
give large donations to candidates, who are then responsible for negotiating how much
of your money goes to public sector workers. These arrangements not only promise high salaries
in the short-term, but they also hide the payments that will be due down the road when
it will be much too late. The results are predictable.
State and local governments across the U.S. openly admit to 1.4 trillion dollars of unfunded
pension liabilities, or $11,000 per household. “Unfunded” means dollars that have been
promised, but there’s no actual money in the bank. And that’s just the amount they
admit to. The real number, according to the Federal Reserve, is much larger—around 4
trillion dollars, or $32,000 per household. Pensions have already thrown California cities
like San Bernardino and Vallejo into bankruptcy. And the entire state of Illinois is teetering
on the edge. So how do politicians get away with this?
They use a time-tested political strategy: they lie. They lie by saying they can pay for more and more generous pensions—not by collecting
more taxes, but by making investments at a “guaranteed” 7.5% return.
But this is nonsense. It’s less and less likely they’ll meet their 7.5% goal over
time, and their investment behavior—pouring ever more funds into ever riskier investments—suggests
they know it. But if they were to use a more realistic assessment, they’d need to raise
taxes dramatically. And they love their jobs too much for that. We can, however, turn the odds in our favor—with public pressure, discipline, and common sense.
Here’s what needs to happen: First, we need state and local governments
to report unfunded liabilities honestly: the real numbers—using the 2-3% yields that
sound financial reporting would require. No more pie-in-the-sky stuff. The truth should
shock voters into demanding action. Second, we must phase out the guaranteed pension
programs as quickly as possible and introduce 401K plans. 401K plans, if designed properly,
can provide excellent retirement benefits. These plans also have the advantage
of being portable. If you leave the public sector and go work in the private sector,
you get to take your money with you. In other words, you don’t have to be locked-in to
a lifetime government job to receive retirement benefits. Win-win.
Let’s end the current structure of public sector pensions and move to a sustainable
way of compensating our public workforce. Save your city.
Save your state. Save your money.
I’m Joshua Rauh, professor of finance at Stanford and Senior Fellow at the Hoover Institution,
for Prager University.

100 thoughts on “Public Pensions: An Economic Time Bomb

  1. Sure seems like the things that would be good for the people working for you are gradually being taken away and eliminated. Also seems like people are caring less and less about their jobs. Which one created the other?

  2. The problem with 401k was shown during the last recession. I lost over a third of my 401k value over night. These clowns are just making up lies about how safe a 401k is. 401ks are just as safe as investing in Stock because that's all it is. Not to mention that you have less control of a 401k then you do if you just bought the stock yourself.

  3. I live in the state of Illinois. I wish it would go bankrupt so more people would see the truth. But they're way too busy smoking pot to actually notice…

  4. Josh, I got an idea for a solution : How about removing all pensions from public workers? Yes, we do appreciate their contribution to society but they should learn to save for their own pensions during their worklife, or simply get rich somehow so they do not need the government to provide for them when they are old or sick. Wait a minute, remove all welfare and assistance for war veterans as well, they are tough individuals after all and will find a way to survive anyway, close all state funded schools, so parents will learn the responsability to pay for their childrens education from primary school onward, imagine, just imagine how much we could lower the taxes for the wealthy ones in our societies.

  5. The astounding success of capitalism has emboldened socialism to grab their share without any thought toward where and how capital is generated. All the socialist know is, "I want mines!" But socialism is like a parasite, as it feeds off its host, free markets, it slowly kills it. So far we've been able to grow slightly faster than socialism can steal, but now that we've handed our production over to communist China we heading over the cliff. In addition, we have lost all the adults in the room and are left with only spoiled, entitled, and selfish brats in government, media, and academia.

  6. The exact same thing is happening in the UK.
    Our city councils have pension gudgets which in some cases are swallowing over one third of local taxes paid by the people of that city.
    In one city 35% of council tax income was funding council employee pension schemes.
    How can that be fair?

  7. No one should be able to “make” $400,000 a year in retirement unless they’ve invested their own money prior to retirement.

  8. Public pensions are a SCAM- NO Tax payer in the private sector should have to pay for pensions in the public sector!

  9. and then after retiring, they go back to work for the same city as a contract employee getting paid twice.

  10. Nice. We'll stop giving our tax dollars to poor people and praise the politicians when they elect to use these new funds to increase their own pay while teacher salaries and school funding remains the same.

    This is a good plan.

  11. Leaches will do anything to keep sucking from its host. Government jobs are not jobs, it’s a cost on the actual workers, tax payers. Government doesn’t make, innovate or create wealth. It latches on… leaches!!!

  12. These horrific contract negotiations from the 90's are the reason we're seeing this now. This is why you should always think how the future will be affected by the decisions you make today. Who would ever think giving free paid lifetime medical as well as a pension of over 100+ dollars would show fiscal responsibility with taxpayer money? These future negotiations should always be voted on by taxpayers, not just arbitrarily given to employees. smh

  13. The real problem is that some of these pensions are NOT LIFETIME – they can be inherited. I'm not sure where that ENDS, but I know people who have inherited pensions from states they never worked in (public or private sector). I'd love to see some numbers on how much is going out the door to people who don't live in the state, never worked for the state and how long this lasts.

  14. People should have at least 5 children to ensure they are secure in their old age. Those who don't won't have sufficient support in years to come.

  15. 401Ks run the same risks as a stock and bonds investment. The earnings are slightly higher than a CD, but still miserable. Pensions, are guaranteed.

  16. We should be more cautious regarding the arrogance of youth and success. All the things current generations enjoy today is the result of the work and effort of people in the past. Some still alive. We are returning what we owe. We're not doing favors to people in the final stage of their lives.

  17. The problem is not that public pensions exist. The problem is that government officials, namely Democrats (NY & CA, hello!), abuse these pensions to their own benefit by creating exorbitant payments to officials that clearly do not deserve those amounts.

  18. So tried saving your video to my playlist ( as I do ALL your videos, the "War on Boys," and checked to verify it….well, within mere seconds of saving it, it was immediately gone and/or just didn't go there. It was also it was erased from my feed simultaneously! 😠

    Haven't had time, to check, but fairly confident, that many others of Prauger U's are gone too.

    Also, I have had dozens & dozens of others videos erased from my own "private," playlists.
    So much for privacy.

  19. Yeah, this platform is not allowing me to save ANY of your videos, even straight from your site!

    I have to create an entirely new playlist, for each & every title I place them under. It would not save them to existing ones.
    And the two I already had, w/your name were totally gone from my playlists! 🤔

  20. So generally speaking I enjoy this chanels content but I find several parts of this video disingenuous. "A retired NYC sanitation worker makes 280 something thousand a year" well….not really. The individual sited in the article does. He was also a "big wig" in the sanitation system who made over 6 figures when he was actively working as well. Saying that public workers don't pitch in at all for their pensions and there just handed money when they retire as you frame is also widely untrue. Government employees almost universally kick in to their own pensions to the tune of around 5-15% of their earnings ever month usually calculated with your taxes so to imply that all to do to get a payout is to sit around for 20 years not contributing is really disingenuous. Like I said I generally enjoy the content here but this was…well shitty clickbait that had alot of half truths to be honest

  21. Only $1,4 trillion to $4 trillion? What about the unfunded social security liability at $20 trillion and rising? Look at the bottom of the updated reliable usdebtclock.org.

  22. I know that this video is directed to Americans. In Canada, the pensions are funded by the employee and the employer. The government does not contribute anything, but only
    disburses it.

  23. This helps me to understand why the Postal Service is using so much revenue to prepay for retirees retirement. It never made sense to me but it does now.

  24. Politicians should spend the rest of their lives in a deep, dark dungeon. They have robbed us BLIND! Something MUST be done! #CorruptSocialists #TaxesAreMostlyUnconstitutional

  25. I have a public employee retirement account through my job, and I can tell you it is untenable. The retirement age and years required to work keep increasing. We younger workers are paying for the generosity of the program in its early years. Older employees were allowed to buy as many extra years as they could afford, and they were retiring fairly young after 20 years. Now, even if I managed to buy 10 years, I still would have to work 30 years before I was even old enough to draw retirement pay. I wish, they'd let is opt out for company matched IRAs or 401ks.

  26. U know what are two words that should scare the heck out of you,especially if you have done any research yourself- CLIMATE CHANGE.. seriously think twice prageru before posting an EXTREMELY unscientific video which has obvious loopholes(which I have duly pointed out in the comments section of the original video)

    How are u even calling urself a university?In the words of Dennis Prager it is because it is dispensing information ,but it's completely wrong information!

  27. My widowed girlfriend spends $400 a month on healthcare with a $6000 deductible. But her junkie neighbor who doesn’t work gets top tier government healthcare for free. The system has failed us.

  28. I WILL NOT pay more to the government because they screwed up and guaranteed money that didn't exist. They arguably take too much as it is. No More.

  29. Don’t blame the people getting pensions or accepting pension payouts. It was part of the deal when they agreed to work for 30 boring years of their lives. Blame the people offering the pensions. They can phase out pensions with self directed investment accounts but people that were told they would get a pension after 30 years deserve that pension as promised. The end result of getting rid of pensions is less loyal employees who leave when they are tired of doing the job. The average experience of the workforce is drastically reduced Resulting in a younger less experienced work force who stays 2-5 years and decides staying long term isn’t worth it. Rightly so. The pension is what made it worth staying with the low paying agency. The pension paying agency in turn reaps the reward of experienced people who are there to stay and move up in the org. Without experience there is no one who can effectively lead and most have moved on to higher paying private sector jobs before they move up in the org. I have seen firsthand the effect of not having pensions. So I speak with firsthand knowledge of a before and after having a pension comparison and the resulting workforce 15 years later. After 30 years I can’t imagine who will be in charge. The person with 3 years experience? When you’re talking about services like fire control having experience is absolutely life and death critical. So either pay more to keep the talented ones from leaving or keep the pension as incentive is critical services like fire and protection.

  30. Funny never mentioned how much $ comes out of every paycheck for “Pensions” because that shit hurts every time I see it….. maybe the politicians should not dip into pension accounts to pay other debts, and then turn around and say there is no money in the pensions fund…

  31. This video acts like city employees dont pay in tons to the pension every year out of their pay checks. Also these city employees with pensions dont get Social Security and almost never have 401Ks or other retirements. Yes a pension relies on new members paying in. Similar to a ponzi scheme, yet far more credible. Usually I agree with PragerU, but this video was juat dishonest, almost complete lies. It makes me question other PragerU videos. Im as conservative as it gets, but this is boardering on being just like the propaganda we see on the left.

  32. These people worked for their money. One of the reasons people,put up with working at jobs they might not love. If you or anyone in these cities want to cut funds cut welfare by 70%. Make welfare bare bones not steaks and lobsters. Democrats and Republicans need to honor their commitments to employees. I do not agree with this Prager U video. Generally I support most of them. Welfare and entitlements need to be on the cutting block. Yet taxes are the only thing that’s goes up and down.

  33. Finally Prager U said it, money in politics has a corrupting influence. Will you now join the left in the fight to get money out of politics or are only contibutions from Unions corrupting and money from other sources is fine?

  34. Oh look. PragerU advocating (again) that the "little guy" doesn't deserve what he signed up for.
    Of course, at the same time cheering and propagating trillion dollar wars, and trillion dollar tax cut which only benefit those who then pay Prager to skew the facts to suit the narrative….

  35. Ok, so a few of their statements were overly conspiracy theorist-y, and in the examples of individual people being payed massive amounts the essentially just lied, but as a whole this is quite true and reasonable, which as a leftist I am quite surprised by.

  36. Corruption stole my retirement. Something I and 50000 other employees work for. But the government didn't hold the people accountable that caused it. Those people ran off and bought yachts and Islands. It's about time we start holding Washington and CEOs accountable and start attacking them like they've attacked us.

    I love how Trump is sticking it to this corruption

  37. https://www.youtube.com/watch?v=nAHgr9dY9BU&t=3s Published on Apr 19, 2009 The 401k Fallout
    Checked your 401k lately? The recent financial collapse has devastated this retirement resource. Older workers are hardest hit, as their financial futures may now be at risk. Steve Kroft reports.

    The FDR social security system actually is a scalable system for it is a long term system REGARDESS HOW LONG YOU LIVE as long as you follow it's GOVERNMENT OWNED AND CONTROLLED AND REGULATED AND SELF-POLICING AND SELF-REINVESTING ORIGINAL SS TAX RE-INVESTMENT POLICIES by investing in life-supporting public utilities and active and passive infrastructures and in economic life activities supporting TECHNOSTRUCTURES which is a full-set industrial economic industrial base PARALLEL that of the private civilian economy and military economy.

    1st to act as a counter-balance against unethical and unlawful and destabilizing private sector's activities, especially in Wall Street. Such as all unlawful and unethical corporate practices such as predatory practices, corporate welfare, political protection, corporate raiders, crony politicized capitalism, monopolies, cartels, oligopolies, coerced mergers, non-transparent and unapproved interconnecting corporate multi-ownerships in various corporations that violates the ANTI-TRUST ACT PASSED BY PRESIDENT TDR and only rely on good old innovations an invetiveness, banning all forms of foreign blackmail against legal corporations if they want to do business with them, banning anti-competition corporate practices, banning cut throat unfair competition, banning unregulated free trade without tariffs, applying Henry Ford's policies of turning workers into customers and applying Hnery Ford's policies in hiring with on the spot hands on training that BANS CORPORATE PARASITISM, etc.

    2sd is to prevent the military from touching and affecting the SS tax paid investments in life-supporting public utilities and active and passive infrastructures and in economic life activities supporting TECHNOSTRUCTURES which is a full-set industrial economic industrial base.

    The policy of NOT ALLOWING SOCIAL SECURITY TAX MONEY GOING TO WALL STREET was gradually sabotaged and eroded by Wall Streeters who insinuated them into the Federal System and tried to persuade them into investing in a highly volatile and very risky financial investment environment that benefits nobody but only themselves regardless of whether the stock market is going good or not so good and destroys the financial stability and original financial investment policies of the New Deal Act that all social security tax money was to be invested in government regulated government owned or government co-owned public and private utilities.

    But mostly public utilities for more than 90% and the rest in government regulated and co-owned public-private utilities. In short, all social security tax money is invested in the PHYSICAL ECONOMY which is the producing economy and the real economy of main street in the production of new goods and services by investing in the life-supporting public utilities infrastructure and economic activities-supporting public industrial technostructures of a full-set science-driven, heavy high-technology, industrial basic manufacturing economic system co-existing in parallel with the private sector as a PROTECTIVE SHIELD COUNTER-WEIGHT against all unlawful and unethical corporate practices such as predatory practices, corporate welfare, political protection, corporate raiders, crony politicized capitalism, monopolies, cartels, oligopolies, coerced mergers, non-transparent and unapproved interconnecting corporate multi-ownerships in various corporations that violates the ANTI-TRUST ACT PASSED BY PRESIDENT TDR and only rely on good old innovations an invetiveness, banning all forms of foreign blackmail against legal corporations if they want to do business with them, etc.

    How could the money supply increase by 25 times without creating runaway inflation? Price inflation results when "demand" (money) increases faster than "supply" (goods and services). As British economist John Maynard Keynes pointed out, adding new money to the economy will not drive up prices so long as the money goes to produce new goods and services, because supply will increase along with demand. This modification of the classical "quantity theory of money" helps explain such paradoxical data as the "economic mystery" of China. The Chinese have managed to keep the prices of their products low for thousands of years, although the money supply has continually been flooded with the world's gold and silver, and now with the world's dollars, as those currencies have poured in to pay for China's cheap products.8 The Keynesian explanation is that prices have remained stable because the money has gone into producing more goods, increasing supply along with demand. AND AVOID THE WALL STREET STOCK MARKET'S HIGHLY UNSTABLE AND HIGHLY VOLATILE SPECULATION BASED VALUATION PRACTICES WHICH ARE ALL TOTALLY "ILLEGAL"

  38. Jesus Christ, one word for you hapless morons who think Private companies are the answer to literally everything: Australia.

  39. Honest question, if we cut every program above our budgeted income (not including foreign and domestic debt) what would get the axe first?

  40. Save the Planet… Eat the Babies… they taste just like Chicken!
    The US military is a bigger polluter than more than 100 countries combined – https://qz.com/1655268/us-military-is-a-bigger-polluter-than-140-countries-combined/
    'We need to eat the babies' says woman to Alexandria Ocasio-Cortez – https://www.youtube.com/watch?v=epwUTVUwB7A
    Borderless (2019) | Official Documentary – https://www.youtube.com/watch?v=ZQ_fz9EW5Iw
    The US Government is the Largest Terrorist Organization in the WORLD!

    The Sheeple need to take a hard Look at the REAL Enemy… the Government! They steal your Freedom and Liberty, your money, your property, your privacy, your dignity, your future!
    You are NOTHING but TAX CHATTEL!

    Wake Up Sheeple… you are not Free! It is all an Illusion to keep you under control! That should make you so proud… stand up tall and march down Main Street Waving Old Glory and singing the Star Spangled Banner! Baaa Baaa Baaa

    According to Our Government: Spying, Violence, Lying, Extortion, Theft, & Corruption of Any Kind is Unacceptable in our Society… Unless the Spying, Violence, Lying, Extortion, Theft, & Corruption is Perpetrated by the Government!

    Blue Team or Red Team? The Jones Plantation https://www.youtube.com/watch?v=vb8Rj5xkDPk
    More Police Corruption – On Duty Cop Overdoses On Heroin & Passes Out In Police Car (Rick Gore) – https://www.youtube.com/watch?v=PGDb4ZwEnKs
    When Everything is a Crime: (ReasonTV) – https://www.youtube.com/watch?v=SV9m9N8gP9c
    Houston Police Officers Union President Joe Gamaldi – https://www.youtube.com/watch?v=b8eu6Pc7KO0
    The Last Hillary C Video You'll Ever Need to See! (Brian) – https://www.youtube.com/watch?v=T8-MncrnwzY
    6-Year-Old Arrested for Throwing a Tantrum? (LibertyDoll) – https://www.youtube.com/watch?v=zLmJqVTKHkg
    Militarized Police Attack Man Who Filmed Controversial Arrest (RNN) – https://www.youtube.com/watch?v=1fYvTZZcGv0
    Mueller's No. 2 Man Andrew Weissmann Had Documented History of Prosecutorial Abuses (JW)- https://www.youtube.com/watch?v=BDWr3oRaDIA
    WOMEN'S RIGHTS…I WILL NOT COMPLY" (Brian) – https://www.youtube.com/watch?v=Wq2m-20DhEE

    The Government's War on Cameras! (Reason) – https://www.youtube.com/watch?v=LY0MUARqisM
    The Government War on the Citizens – Unarmed man begs for life, shot by police – https://www.youtube.com/watch?v=7Ooa7wOKHhg
    Can America Let Go Of Being Number One? – https://www.youtube.com/watch?v=9NcpNdLmBpI
    Free Speech? F*** Gun Control Sticker Re-raises Decades Old Controversy – https://www.youtube.com/watch?v=6JEAqnJI2Rw
    The Economic Costs of US Empire' – Nathan Goodman – https://www.youtube.com/watch?v=lUiVgJhlqac
    Guy Stops Guy With A Gun – Gets Arrested Because Code Of The Bald Cop Gets Upset – https://www.youtube.com/watch?v=zXU7yIwnUFc

  41. I think the American 401K is the same as the Australian Superannuation plan, basically it's money we pay into a fund that we can't access until we retire

  42. I generally agree, but unfortunately 401Ks are just not reliable enough because they are based on/in the Stock Market. If you saw your 401K devastated in 2008, you know what I mean. I'm sure there are better solutions, something that is a better deal for the retiree as well as the company/government.
    Instead of pushing 401Ks, how about REALLY pushing IRAs and giving those all the same benefits and ease of use, without the risk? Wow, an automated retirement savings that yields good interest with no risk of loss? What a concept! Why haven't we thought of this?
    Also, pensions will need to be phased out, you can't just yank the rug out from under people. That would not be fair.

  43. Just like Susan Powter we need to
    "Stop the Insanity!" I am not working my ass off to pay some government employee enough money to retire to Hawaii. Pensions are one of the reasons why so many companies have outsourced well paying jobs to foreign countries. Unions are eating our industrial sector alive. I have worked for one such company that do to their unions pensions they are only able to hire short-term temporary employees. Which in turn have absolutely no opportunity of being hired and having job security.

  44. My city as with others if you drive a car in the city you know how rough the some of the roads can be. One of the reasons is the cities don't have the money due to unfunded liabilities so in turn they are pulling money away from much-needed projects to pay for these unfunded liabilities. This is one of the reasons why our countries infrastructure is going to s***.

  45. Very well thought out. But you failed to address a big problem ( at least in New Jersey ) During the ,com years. Governor Christine Whitman signed a law stating the Municipalities,Counties and the state could defer the governments contribution to the pension fund because the investments were doing so well. ALL administrations since her have continued this practice. When the dot com market busted the funds where producing nothing like they were but the politicians had all ready allocated the money required for their payments to other line items.

    Now the pensiond in NJ are VASTLY underfunded and the State Governments response is a publicity campaign to demonize the public workers who have ALWAYS made their payments to the fund.

  46. This video is not entirely accurate as I pay into my own pension 75% and the government pays 25% so it's not just some huge payout.

  47. The politicians are the ones receiving the largest pensions and it comes after just a 4 year term along with lifetime health insurance benefits.Vote for term limits ,The lack of them is what's really killing our economy.

  48. I have a modest pension of $62K per year earned over 30 years of public service to the state of California. I held a professional position requiring a college degree and earned a salary over 30 years which was considered 15% to 20% below the market average for similar positions in the private sector. I performed a valuable service for the people of this state and I feel I've earned every dollar of my pension.

  49. Sorry, but when you say a sanitation worker gets $285,000 per year without providing evidence, you lose ALL credibility. PERIOD! The truth is powerful enough, you don't need to make stuff up.

  50. Don’t even ask how much a retired general makes. It’s stupid, over 25,000 a month on top of all other benefits.

  51. I work for county government in CA. I am paying 12% of my gross pay from every paycheck into my counties pension fund. It is mandatory- not voluntary. I still get taxed at the very high CA tax rates off my full paycheck. my net take home pay is about 60% of my gross pay. If I work here 20 years at my current pay, I am expected to earn a lifetime pension of about $2000/month. But I have to have paid into that pension for 20 years of service. The figures they quoted of retired monthly pay is for very top level government positions only. The majority of us only get enoigh to survive old age off of, amd we have to pay into it with gross pay the entire career. A 401k is a nice alternative, but government jobs have to continue to pay their retired employees pensions they promised them, so they must keep the pensions in place with current workforce. To end public pensions you would have to steal the retirement already promised and earned by the retired public sector career employees. I like PragerU but just offering some counterpoints to consider in this discussion.

  52. And he didn't even mention the double and triple dipping cops and firemen. Work 20 years then "retire" while working another 20 years somewhere else. Then do it again! Some guys are collecting two, 20 year police pensions while working a desk job at their third agency.

    Public servant indeed!

  53. A lot of distortion of the truth here, citing outrageously high pensions, which are not the reality for the overwhelming majority of public service workers. The fact is that public servants contribute quite substantially to their pension plans, with a high percentage of their salary being deducted, matched by contributions from the employer. In fact, in the 1990s many government pension plans had large surpluses, which governments helped themselves to in order to underwrite all their social programs and electoral promises. Most public service pension plans have tightened the criteria for qualification, and now stipulate a higher minimum age (60 in many jurisdictions) and are increasing the amounts employees must contribute. We are often told that we should be following the private sector model, but I wonder what is so great about that one, with employees being subjected to substandard wages, job insecurity, layoffs because of corporate mergers and greed, having their promised benefits and pensions taken from them while CEOs rake in their billions – why is this a morally superior model? What's it all about, anyway, if not people living decently.

  54. Just pass a law requiring all pensions, public and private sector, be “pre-funded” like the USPS, and the word “pension” would disappear from the American English language forever.

  55. Don't get me wrong, I'm okay with changing the rules for new hires, but you can't suddenly change the rules for people who were promised a pension. Contracts must be honored. Surely conservatives understand the value of upholding the terms of contracts, right?

  56. You are 75% wrong. gov. employees get taxed a lot from their pay check and contribute towards their 401k/457 retirement pensions. These benefits is why you work in gov. Depending on what your job was, some retirees dont live long. so stop hating!

  57. As a retired Illinois municipal police officer, I am concerned that my city's pension fund could be confiscated by legislative fiat. I have learned that Governor Pritzker is trying to get legislation passed that would seize all local pension funds and place them under the control of the state. My city's police pension is fully funded and run by current and retired officers and others. To let the corrupt Chicago machine take my future away from me has me quite concerned.

  58. The consequences of this can already be seen happening in Brazil, but I would say in a much larger scale, is not good my friends, don't let the same happen in America!!

  59. So uh…what are these people supposed to do after retirement? They don’t pay into social security. Somebody has to collect trash, police the streets, fight the fires etc.

    Most government jobs have good benefits because they can’t offer salaries that compete with private sector. If you pay peanuts, you get monkeys.

    We complain about the quality of the police forces and teachers, but we are not willing to pay them well. Contrary to popular beleif, nonody goes through that whole career out of a sense of “duty”. Thats just feel good BS. The reality is, most people are willing to do the shitty job becuase they can get a decent pension at the end and enjoy retirement.

    I think the better solution is to just decrease the size of government.

  60. These pension are ridiculous indeed. But, to shift the 100% of the risk to the individual, pension to 401k, sucks. Reconfigure the pension plans because, obviously, they are messed up.

  61. As every other dumbhead libertarian, this guy is completely detouched from reality projecting his vision of must-have human virtues on the entire population and expecting each one to take care of themselves. The problem with this, however, is that many people are not self-reliant and responsible individuals capable of long-term planning and making sound investment decisions. And many more perfectly capable and wise individuals simply cannot or don't want to deal with retirement planning and managing their investments for any number of totally legitimate reasons such as tight budgets, debt burden, life hardships, focus on other priorities, or simply lack of time, interest in financial planning, or relevant skills.
    Last I heard, average 401k fund of a US retiree had around US$ 24k in it — which is NOTHING, as even the most modest retirement lifestyle requires at least US$ 1.5M in savings to last until death. And why is that? Because most people are dumb and irresponsible, and always find "better" use for their incomes than shelving it aside for hard times. And when the hard times come, they rely on publicly-funded welfare programs and mandatory government-ran insurances such as Medicare and SS to survive. And this is exactly why such programs are absolutely essential: they FORCE dumb and irresponsible people to contribute into the public funds and insurance pools while they can, because in our humanitarian society they're totally expected to draw from these pools at some point one way or another, no matter whether anyone likes it or not.
    And if you think you can cancel all these mandatory insurances and let everyone fend for themselves — all non-savers be damned — think again, because this is the most reliable and time-tested recipe to breed social unrest, rampant crime and possibly very bloody revolutions wiping out everybody's plans for decent retirement. And if you think you, wise and responsible libertarians, can hide from the angry mobs or criminal gangs behind your fences in gated communities, read some history books which will tell you that dissatisfied irresponsible masses will always find a way to bring their dissatisfaction to your doorsteps in the most unpleasing way.
    In our world of highly interdependent social creatures with widely ranging skills, ambitions and abilities, the only way to maintain social stability and prevent destructive upheavals and unrest is to maintain robust public social programs funded by taxes or mandatory contributions. And social stability is an absolute imperative for social development and economic prosperity — which is what libertarians are incapable of understanding, preaching instead some sort of utopia world that completely ignores human nature and objective reality.

  62. Pragur u everyone where we defend minimal taxes for the mega rich and oligarchs but shit on old people for not starving. Also those people have paid money while they were working so they get pensions it's not " free money"

  63. reform ideas are sensible but will never be implemented. No one cares until there is a crisis. Probably municipal bankruptcies are the only means for pension reform long-term.

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