Debts Should Be Honored, Except When the Money Is Owed to Working People

Police direct traffic in the government
 district of Dallas, Texas. (Photo:MasonCooper)

This seems to be the lesson that our nation's leaders are trying to pound home to us. According toThe New York Times, members of Congress are secretly running around in closets and back alleys working up a law allowing states to declare bankruptcy.

According to the article, a main goal of state bankruptcy is to allow states to default on their pension obligations. This means that states will be able to tell workers, including those already retired, that they are out of luck. Teachers, highway patrol officers, and other government employees, some of whom worked decades for the government, will be told that their contracts no longer mean anything. They will not get the pensions that they were expecting.

Depending on the specific circumstances, they may find their pensions cut back 20 percent, 30 percent, perhaps even 50 percent. There would be no guarantees if a state goes into bankruptcy.

There has been a concerted effort to bash public-sector employees by either highlighting the few instances where pensions actually are exorbitant, or just making things up. Untruths about Goldman Sachs, General Electric, or any other major company rarely appear in the media and are usually quickly corrected when they do. However, exaggerations or outright fabrication are a standard practice for those who report on state and local budgets when it comes to public employees.

The public has been bombarded with stories of public employees retiring with six-figure pensions while still in their early 50s. There may be some instances of such inflated pensions, but that is far from the typical story. If we look to New York State, the hotbed of bloated public budgets, we find that the state's main retirement system pays an average pension of$18,300 a year. For many workers, this is their whole retirement income since they were not covered by Social Security.

This is the general story of public pensions. Public-sector workers are often better situated than their private-sector counterparts, in that they even have pensions. But study after study shows that these workers paid for their pensions with lower wages than their private-sector counterparts. It is tragic that so many private-sector workers cannot count on a secure retirement, but it won't help them to make workers in the public sector equally insecure.

Read Full Article

Enter your email address to subscribe to our newsletter:


Delivered by FeedBurner

Save 30% on our Deluxe tax filing package when you file at CompleteTax.com

Tax Appeals Swamp U.S. Cities, Towns as Property Prices Plunge

Jeff Green and Tim Jones
Bloomberg

The backlog of cases from taxpayers seeking to lower property-tax bills of more than $100,000 shot up to 14,236this year from an annual average of about 6,000 during the past decade. The backlog of smaller claims was at28,558 at the end of September, eight times higher than a decade ago, according to records at the tribunal, a Lansing-based administrative court.

From Los Angeles to Atlantic City, the New Jersey gambling resort whose credit rating Moody’s Investors Service cut by three levels last month, property owners are demanding lower taxes after real-estate values plunged. The disputes over billions in dollars come as municipalities are already slashing services such as police and fire protection and may depress revenue further as communities try to recover from the longest recession since the 1930s. InMichigan, Governor-elect Rick Snyder has warned that hundreds of towns face financial crises.

“We’re just getting swamped,” said Halm, 54, who was appointed in 2003. “We’re constantly buying new file cabinets to hold all the cases. We even have six surplus file cabinets in the courtroom.”

Read Full Article

RELATED ARTICLE:
10 Signs the US is Becoming a Third World Country

Buy 1 Get 2 Free at Botanic Choice Buy 1 Bottle and Get 2 FREE (select items), plus Free Shipping on $25+ Expires 12/31/2010Fresh food that lasts from eFoods Direct (Ad)

Live Superfoods It is time to Wake Up! You too, can join the "Global Political Awakening"!

Print this page