Quote:
Originally Posted by scottw
current retirement benefits should not have to be paid with current tax revenues...where are the years of "contributions" plus interest made by the public employees to their retirement???....sounds like a Ponzi scheme
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Of course it's a Ponzi scheme.
These people make tiny contributions to their pensions, and in most states, the taxpayers are expected to make up the difference. states have mostly been able to kick the can down the road using accounting gimmicks (liabilities that aren't due in this year, aren't considered in the annual budget), but as more and more Baby Boomers are retiring, the reserves are dwindling FAST. Here in CT, we will start bouncing checks in 5-10 years (depending on interest rates and some other variables). At that point, the state will concede that they can't double th income tax, so they will have zero choice but to declare insolvency and re-negotiate those contracts.
These people should have switched to 401(k)s (or whatever you call the public sector equivalent) 25 years ago. But here in CT, the legislature has been controlled by Democrats for 30 years, and Democrats are beholden to labor unions, so that wasn't going to happen. You can only plug holes in the dike with your fingers for so long, we only have so many fingers. The Baby Boomers will be the wrecking ball that destroys the dike once and for all.
This isn't advanced calculus, this is elementary school arithmetic. You cannot have more than there is. Public labor unions are the lsst entity on the planet that refuses to accept that notion.
As you said, it is absolutely a Ponzi scheme. Like all Ponzi schemes, it will implode when sufficiently more money is going out than coming in. We have been treading water, barely, for many years. But we cannot dodge the economic impact of the Baby Boomers. It's coming.