The Great American Pension Swindle

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The Great American Pension Swindle

By John Ruberry

I hate to inter­rupt your day by veer­ing away from such issues, well, issues to some, such as the Don­ald Trump campaign’s alleged col­lu­sion with Rus­sia or that nation’s reputed hack­ing of the 2016 pres­i­den­tial elec­tion, but there is some­thing more impor­tant that the main­stream media is only nib­bling at the edges of: the Great Amer­i­can Pen­sion Swindle.

What is it?

Under­funded pen­sion plans in blue states, well mostly blue states.

Here are some media head­lines from just this month:

I could go on and on.

As for that last one, many bond firms rate Chicago Pub­lic Schools’ bonds as junk. The col­lat­eral for its lat­est loan, and that’s a gen­er­ous use of the term, is money owed to CPS by the state of Illi­nois, the Puerto Rico of the Mid­west. Illi­nois’ public-​worker pen­sion plans are just 29 per­cent funded. Chicago’s pen­sions are worse – at 25 per­cent funded, the worst among 15 large cities sur­veyed.

I don’t have Schaden­freude over this sit­u­a­tion. On a per­sonal level the spouse of a friend of mine and one of my cousins are col­lect­ing Illi­nois State Police pen­sions. They were promised these retire­ment plans and they didn’t pay into Social Secu­rity when they worked for the state. There was no opt-​out option for them in regards to these pen­sions. And their union, unlike AFSCME, wasn’t show­er­ing Illi­nois politi­cians, mostly Democ­rats, with copi­ous cam­paign con­tri­bu­tions while the state was short­chang­ing and even skip­ping pay­ments into pen­sion funds.

Now what?

[cap­tion id=“attachment_54680” align=“alignleft” width=“206”] John “Lee” Ruberry of Da Tech Guy’s Mag­nif­i­cent Seven[/caption]

I sus­pect bank­rupt­cies in all but name, which I wrote about ear­lier this month in this space, are com­ing to Illi­nois and other states who see pen­sions as a reward sys­tem for polit­i­cal spon­sors such as AFSCME. Here’s another pos­si­bil­ity: run-​of-​the-​mill tax­pay­ers, many of whom are just get­ting by finan­cially and have no pen­sions of their own, nor the abil­ity to retire in their 50s, will have to cough up even more in taxes to bail out pub­lic worker retire­ment funds.

This tragedy is not the fault of the Rus­sians. Vladimir Putin didn’t hack the pen­sion funds. But too bad that’s not what hap­pened. Then per­haps MSNBC, CNN, the Wash­ing­ton Post, and the New York Times might devote more time to the Great Amer­i­can Pen­sion Swindle.

John Ruberry reg­u­larly blogs at Marathon Pun­dit.

By John Ruberry

I hate to interrupt your day by veering away from such issues, well, issues to some, such as the Donald Trump campaign’s alleged collusion with Russia or that nation’s reputed hacking of the 2016 presidential election, but there is something more important that the mainstream media is only nibbling at the edges of: the Great American Pension Swindle.

What is it?

Underfunded pension plans in blue states, well mostly blue states.

Here are some media headlines from just this month:

I could go on and on.

As for that last one, many bond firms rate Chicago Public Schools’ bonds as junk. The collateral for its latest loan, and that’s a generous use of the term, is money owed to CPS by the state of Illinois, the Puerto Rico of the Midwest. Illinois’ public-worker pension plans are just 29 percent funded. Chicago’s pensions are worse–at 25 percent funded, the worst among 15 large cities surveyed.

I don’t have Schadenfreude over this situation. On a personal level the spouse of a friend of mine and one of my cousins are collecting Illinois State Police pensions. They were promised these retirement plans and they didn’t pay into Social Security when they worked for the state. There was no opt-out option for them in regards to these pensions. And their union, unlike AFSCME, wasn’t showering Illinois politicians, mostly Democrats, with copious campaign contributions while the state was shortchanging and even skipping payments into pension funds.

Now what?

John “Lee” Ruberry of Da Tech Guy’s Magnificent Seven

I suspect bankruptcies in all but name, which I wrote about earlier this month in this space, are coming to Illinois and other states who see pensions as a reward system for political sponsors such as AFSCME. Here’s another possibility: run-of-the-mill taxpayers, many of whom are just getting by financially and have no pensions of their own, nor the ability to retire in their 50s, will have to cough up even more in taxes to bail out public worker retirement funds.

This tragedy is not the fault of the Russians. Vladimir Putin didn’t hack the pension funds.  But too bad that’s not what happened. Then perhaps MSNBC, CNN, the Washington Post, and the New York Times might devote more time to the Great American Pension Swindle.

John Ruberry regularly blogs at Marathon Pundit.