People are starting to realize that governmental promises mean a lot less than they thought:
Retired social worker Jim Gillis was told his $36,000 Rhode Island state pension would increase by $1,100 next year to keep up with inflation.
But lawmakers suspended annual increases, leaving Gillis wondering how he'll pay medical bills and whether he'd been betrayed by his former employer.
"When you're working, you're told you'll get certain things, and you retire believing that to be the case," Gillis said.
Because government has always been so trustworthy. Especially when they don't put enough money by to pay their promises.
Anyway, must be because of those EEEEEEEEEVIL Republicans, eh?
Nowhere have the changes been as sweeping as in Rhode Island, where public sector unions are suing to block an overhaul passed last year. The law raised retirement ages, suspended pension increases for years and created a new benefit plan that combines traditional pensions with something like a 401(k) account.
"This saved $4 billion for the people of Rhode Island over 20 years," said state Treasurer Gina Raimondo, a Democrat who crafted the overhaul. "Rhode Island is leading the way. I expect others to follow, frankly because they have to."
Public employee unions say Rhode Island is reneging on promises to workers.
"What they did was illegal," said Bob Walsh, executive director of the National Education Association Rhode Island. "We're deep into a real assault on labor. It worries me that people who purport themselves as Democrats do this."
Guys, you should take a hint. Look at the underlined part. Do you think Democrats are really all that interested in cutting public pensions?
Also, it's not a coincidence that the places that have had to make cuts so drastically are pretty much all-Democrat strongholds. A lot of Republicans in Chicago or Detroit, eh?
When reality steps in to let you know what happens with promises when there was no preparation for actually keep them… that tends to be a very harsh lesson, indeed.
All of this was entirely predictable (and many of us have been predicting this problem for years — I got started 4 years ago because I was arguing with pension actuaries about whether public pensions could actually go belly up. "The government doesn't go out of business!" They said. Right. I'm still posting stories there, but I'm getting fewer arguments from the pension actuaries now. Hmmm.)
Let's consider Chicago in particular. Mr. Daley and son were in power for years. They had fun bribing public employees, and other interested groups, to keep the Daley gravy train going.
There was no particular reason he had to step down…. other than Mr. Daley is not a stupid man. The money was running out. The check was coming due on pensions.
The beauty part of pension promises was that you were promising to give money well into the future. Sure, a bit would be salted by year-by-year, but it was never enough to fully fund the pensions (and sometimes payments were skipped entirely, or the fake contributions called pension obligation bonds were done instead.) Bribing public employees not only with current taxpayer money but also future taxpayer money — score!
But then the future taxpayers didn't show up, or weren't as rich as you thought they'd be. And said taxpayers are not all that much interested in paying for service 20 years ago when there is a severe issue with services lacking right now.
The assumption had always been that when it came to it, taxes could always be raised (they can't) or barring that, services would be cut before pensions (partly true, but once services are cut enough, the taxpayers are going to leave.)