July 19, 2013

Big pensions don't work

Money for nothing.  Big pensions don't work.  Just ask Detroit (emphasis added):
The city of Detroit filed for bankruptcty on Thursday afternoon, ending weeks of speculation about a possible such move.

Kevyn Orr, the city's emergency manager, handed over a 3,000 page document detailing all the money which the city is unable to pay.

The list of those owed includes the names of all of the city’s active employees and its retirees, a list of properties that have tax claims with the city, numerous bondholders, business creditors and companies that insured Detroit debt.

The largest creditor is the city's general pension scheme, which is owed $2 billion.
That about sums it up for conservatives - the city is overpaying government workers until well after they are off the employee role. There is no world in which that makes economic sense. Unsustainable pensions didn't work for GM and they won't work for Detroit, which is at the added disadvantage of having to pay those unrealistic pensions out of the public purse.
 
If only those public employees would learn something from this...
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