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:
- Madison-St. Clair Record (Illinois): Report shows ‘true’ accounting of pension liabilities more than double what governments say; Expert: debt is ‘utterly absurd’
- NBC Dallas-Fort Worth: Final deal on Dallas police and fire pension crisis
- Breitbart California: Jerry Brown: California pension liability skyrockets by 22%
- Pensions & Investments: Moody’s downgrades Connecticut’s general obligation debt rating, citing pension expenses
- New Jersey 101.5: NJ details latest plan for paying for retirement: Hit up the lottery
- WDRB: WARNING: Kentucky has only 13 percent of state pension money owed over next 30 years
- US News and World Report: Report: Teacher pension promises not kept
- Investors Business Daily: Forget Puerto Rico, what about US states’ soaring pension debts
- Providence Journal: R.I. treasurer: Projected pension investment returns are too optimistic
- New York Post: Court bars judges from taking both salaries and pensions
- WBEZ Chicago Public Radio: CPS to borrow nearly $400 million to make massive pension payment
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.
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.