Fareed Zakaria Shocker: 'Single Biggest Threat to the U.S.'s Fiscal Health' Is Public Employee Pensions
Less than two weeks after Wisconsin's Republican Governor Scott Walker won his recall election, you wouldn't expect a prominent liberal media member to be coming down on public employee benefits.
Yet there was Time magazine's editor-at-large Fareed Zakaria publishing a rather shocking article Friday with the equally shocking headline "Why We Need Pension Reform":
Warren Buffett calls the costs of public-sector retirees a "time bomb." They are the single biggest threat to the U.S.'s fiscal health. If the U.S. is going to face a Greek-style crisis, it will not be at the federal level but rather with state and local governments. The numbers are staggering. In California, total pension liabilities--the money the state is legally required to pay its public-sector retirees--are 30 times its annual budget deficit. Annual pension costs rose by 2,000% from 1999 to 2009. In Illinois, they are already 15% of general revenue and growing. Ohio's pension liabilities are now 35% of the state's entire GDP.
The accounting at the heart of government pension plans is fraudulent, so much so that it should be illegal.
After sharing some of the numbers in California - where public pension funds are actually basing future monetary needs on the stock market growing 40 percent more than it did in the go-go 20th century! - Zakaria demonstrated how the negotiation of these retirement plans is "democracy at its worst":
Public-sector unions, powerful forces in states and localities, ask for regular pay increases. Governors and mayors can dole out only so much in salary hikes because of requirements for balanced budgets or other constraints. So instead, they hand out generous increases to pension benefits, since those costs will hit the budget many years later, when current officials are themselves comfortably in retirement.
As a result, states, cities, and local governments across the fruited plain have to cut back on the very services their citizens are paying taxes for in order to cover the growing cost of their workforce.
In California, spending on employee pay and benefits is up 65% in just the past ten years. That's more than double the rate of inflation.
Worse still, this is highly regressive:
Current workers will have their salaries cut, their numbers thinned and their benefits slashed, all to maintain relatively comfortable benefits for retirees, who are on average richer than the people who are being asked to make these sacrifices. Current residents will watch their services dwindle, so that retirees--again, who are richer on average than they are--can have guaranteed generous cost-of-living increases year after year.
While the public at large suffers, who benefits?
Public-sector unions are strong supporters of the Democratic Party, so their clout has drowned out the voices of the poor, the young, students and average citizens.
As such, the Occupy movement should be targeting public employee unions and not Wall Street, for the former are actually harming the economy and the future of this nation far worse than the latter.
To be sure, none of this is news to most readers. Conservatives have been pounding the desk about the corruption associated with public employee unions for years.
But that a liberal press member like Zakaria would shed light on this so shortly after the Democrat disaster in Wisconsin and less than five months before Election Day is quite remarkable.
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— Noel Sheppard (@NoelSheppard) June 9, 2012
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Comments
He didn't even mention...
Submitted by zenman1661 on Sun, 06/17/2012 - 5:28pm.
the recently uncovered assessment by JP Morgan that the pension plans in this country are under funded by close to 3 trillion dollars.
Sounds like a crisis. What
Submitted by MrSnuggles on Sun, 06/17/2012 - 5:38pm.
Sounds like a crisis. What will the left do? Why, demand tax hikes on "the rich".
It took awhile
Submitted by CobraMan on Sun, 06/17/2012 - 5:40pm.
It took awhile, but that light bulb is finally beginning to shine above Fareed's head, even though Walker turn it on over a year ago! It must be a CFL.
The Citizens of each State shall be entitled to all Privileges and Immunities of Citizens in the several States. The US Constitution
Unless you're a fetus. The US Supreme Court
Or Anwar al-Awlaki.
This article by Zakaria is a TOTAL RED HERRING, Noel
Submitted by djwolf12 on Sun, 06/17/2012 - 5:57pm.
Noel, I'm a little saddened that you are falling for this socialist trick. Do you honestly believe that all of a sudden Zakaria had become a fiscal conservative amid the Wisconsin Recall? I am not buying it. Remember, Zakaria IS a George Soros endorsed media stooge. He was the emcee for a George Soros benefit dinner in NYC on 12/7/2010.
This story is a diversionary tactic proposed to DEFLECT PUBLIC ATTENTION AWAY from the fact that 800,000 illegal aliens, err, UNDOCUMENTED DEMOCRATS are going to be put on the Welfare roll, Unemployment Roll, and now can collect Social Security. The Democrats are saying that this is good for helping those new citizens find employment? WHAT JOBS ARE THEY GONNA FIND?
Ladies and Gentlemen, HERE IS YOUR MARXIST REDISTRIBUTION OF WEALTH that Obama and his ilk say doesn't exist. This is going to not only bankrupt the welfare system, but whatever sheds are left in Social Security will NOW BE COMPLETELY DESTROYED. It is time to wake up and smell all of the s*** that this administration has been shoveling for 42 months.
What is Fried Zucchini going after here?
Submitted by drsamherman on Sun, 06/17/2012 - 6:24pm.
Is he trying to raise his ratings by seeming a bit more reasonable?
Considering it's spineless liberal idiots like him who gave the unions those huge pensions, he has little or no room to talk.
No, he isn't
Submitted by djwolf12 on Sun, 06/17/2012 - 6:43pm.
He is aiding and abetting the Obama Administration in their destruction of the financial system, the welfare system and the Social Security system by adding more people to the rolls via amnesty. These former undocumented "but now legal" democrats can now join unions and and rake the benefits of getting paid $57/hour to tighted 6 lug nuts and enjoy a 6 figure pension upon retiring at age 50.
What's Farina Up To Now?
Submitted by stratman on Sun, 06/17/2012 - 6:40pm.
I'm not buying Farina has suddenly become enlightened on fiscal restraint.
Where can I find a list of pension liabilities versus that state's GDP? I would like to compare Ohio (35% per the article) with Wisconsin and a few other states.
Gaining my respect
Submitted by fadeinlight on Sun, 06/17/2012 - 8:00pm.
I am a fiscal Conservative through-and-through, but if I believed for one second that Democrats actually cared about the average citizen more than they care for public sector unions, I might actually take the time to listen to what they have to say.
Their actions show (time and time again) where their loyalty truly lies. A good example would be allowing for vouchers and school choice: why can't poor children from the inner city have a choice in which school they choose to go to? As much as they say their loyalty is to the children, everyone knows it's just about the most abominable lie being told.
The Democrats care nothing about the causes they pretend to champion. They have done more to advance racism than any Grand Wizard could have dreamed, by creating this idea of a separate "racial identity" for everyone. Just like firefighters out of work, they go out and look for opportunities to start fires in order to keep that overtime rolling in.
Bravo to Fareed for telling the truth. I don't always agree with him, but I respect that he is speaking his mind regardless of the consequences doled out by his Liberal minders over at CNN.
The 'Single Biggest Threat to the U.S.'s Fiscal Health' is...
Submitted by Dave. on Sun, 06/17/2012 - 8:03pm.
...Barack Hussein Obama.
This camel-flea infested foreign import commie hack from Hell is merely trying to deflect attention from that unassailable fact.
-Dave
Vote for the American in November
Part of the problem in California is the
Submitted by UpNorth on Sun, 06/17/2012 - 8:07pm.
attempt by city administrations to take care of Police administrators. The salary chart shown here lists the problem. Why on earth would you pay a Lieutenant $108K to $120K? That makes no sense, no Lt. I ever saw answered calls, took reports or policed accidents. Or, a recently promoted Captain, $123K to $145K? That's structural insanity!!
The city I worked for has not paid into our pension fund more than 5 or 6 times in 42 years, because the pension fund was "overfunded". But, while not paying what they should have been paying, they did not put aside one cent of those "savings". The people who take care of the pension fund have done a remarkable job, not only in making the funds grow, but in keeping the city at bay, when they've tried to get their hands on the pension fund. They've tried, over the years, to "borrow" against the pension fund, to pay for their silly, stupid social work programs. Our pension fund is ours, not the city's, if they have to pay now to catch up, too bad.
So, now that the city has been stupid for almost half a century, and spent like the federal and state spigot would never get turned off, it's the "greedy" retirees who are at fault. The mayor wants to disband the PD and turn policing over to the Sheriff's Department. And, one of the city commissioners wants to lay off cops and hire social workers, to "stop people from becoming criminals".
I worked for the city of
Submitted by Dan The Man 2 on Mon, 06/18/2012 - 5:27am.
I worked for the city of Dallas for closets 30 years. We also have a fully funded pension which the city can't touch. Not all governments are underfunded or funded like the SS program.
"corruption associated with public employee unions"
Submitted by Newsbubba on Sun, 06/17/2012 - 8:23pm.
Blah, blah, blah, Freak!
This really, really isn't a concern for one of Bambi's surrogates who wants to see more "distribution of the wealth." Something else is up.
My suggestion to CA and every other state that is sitting on a time bomb pension contract system; declare bankruptcy,, have the courts throw out all the contracts, and start over.
Grow a set.
Could there be hope?
Submitted by octavioj on Sun, 06/17/2012 - 9:07pm.
Is he really sincere about this? If he is then can we say there is hope the liberals are seeing the end of the model they adore so much and realizing it had nowhere to go? I would be happy but for now I am skeptical.
As such, the Occupy movement
Submitted by bkeyser on Sun, 06/17/2012 - 9:17pm.
Not only that, but as you stated, the former relies heavily on the fantastical success of the latter.
Ah, don't worry. MSNBC is
Submitted by Slyrr on Sun, 06/17/2012 - 9:32pm.
Ah, don't worry. MSNBC is owned by the Obama administration through the 'stimulus' package. Bashir will be dragged behind the woodshed sometime over the weekend and they'll beat him into submission. He'll soon come limping back to his show and have a broadcast where he repents and says that unions are the 'soul' of America and all citizens must willingly submit all their money.
Anyone care to be?
Submitted by hbnolikeee on Sun, 06/17/2012 - 10:06pm.
Abdul will walk that remark back within the next day or two.
Cool! Do we get to call him a "racist" now?
Submitted by krendler on Sun, 06/17/2012 - 10:25pm.
Like the media and the entertainment industry did with the Tea Party?
Good Question
Submitted by needle on Sun, 06/17/2012 - 11:13pm.
I would prefer a 2000 word grovelling cover article apology to all one and all in the Tea Party movement.
- Looking forward to the self-annihilation of the Manipulated Stories Machine.
Say whaaaaat?
Submitted by almostacowboy on Sun, 06/17/2012 - 10:45pm.
He be trippin'!
Well, we know that Fockeed
Submitted by killa37 on Sun, 06/17/2012 - 10:51pm.
Well, we know that Fockeed Zachariah is/was a 'foreign policy' adviser to Boy Baraka, and that he also has/had visions of becoming part of the next REGIME. Maybe he's starting to realize that this little fantasy may not happen, since even the most die-hard Obama supporters are starting to see that the guy isn't all that he was purported to be - well, he IS all that WE knew he was, but that's a different story.
Something is Fishy Here...
Submitted by NVRAT on Sun, 06/17/2012 - 11:16pm.
you don`t suppose Zakaria and Bubba are planning something that could affect Obammie? I think this is going to be fun to watch.
Nuts
Submitted by sngnsgt on Mon, 06/18/2012 - 12:20am.
Even a blind squirrel...............................
Another scam, this is obama's
Submitted by LAM SON 719 on Mon, 06/18/2012 - 12:49am.
Another scam, this is obama's way of telling the unions and their employees he is not pleased with their dismal performance in Wisconsin, and that they had better put more effort into voter and and intimidation or else under the bus they go too.
IMHO
Submitted by amyshulk on Mon, 06/18/2012 - 4:46am.
When the facts are so stark - local newspapers posting public sector employee pay scales & benefits - they just can't spin this away. Talk about inequity! Yes, I get that public sector clamored for raises, were denied and promised bigger benefits so they feel it's their due...
Oh, I just got it. This is about SSA. First they set the precedent with the unions {you aint gonna get what we promised, sorry} then they come after the rest of us. They have been laying the groundwork for years now and it's finally coming to a head.
Ronald Reagan
You're probably right, Amy.
Submitted by UpNorth on Mon, 06/18/2012 - 10:46am.
This is Baracka's way of saying, even though your SS is "adequate", be a shame if anything happened to it.
Next, instead of income tax refunds, they'll give out carbon credits.
QUICK! run to the window...
Submitted by wizardjr on Mon, 06/18/2012 - 10:54am.
was that a squadron of pigs flying by?!?
Fairy SuckArsa must be off his meds again. It happens from time to time. You can tell by the way he lets reality slip into his broadcast.