It’s unfortunate that future generations, unable to vote today, will bear the costs of many enacted pension programs, entitlements and boondoggle projects, requiring them to pay higher taxes and work later into their lives to pay for these promises.
It’s the inmates running the pension asylum that have negotiated extraordinary pension and retirement benefits today without considering the unfair financial burden it places on future generations.
The international business world is intelligent enough to know that “defined benefits,” neither capped nor precisely quantifiable in advance, are financial disasters to any business, thus, all businesses focus on the known, i.e., defined contributions alone.
Stealing from the young who have no votes but silently shoulder the costs and bear the burden of unfunded promises of these programs to enrich the old, seems to describe the government’s expansion of entitlement benefits and other government services as well as the taxes young people will have to pay to support them. They mostly subsidize older Americans.
The inmates know that debt for our future generations buys votes. Over the decades, the proven “concept” practiced by voters is to defer as much financial responsibility as possible to future generations. Simply stated, if we cannot afford it today, pass it off to the future generations to minimize any impact on our current lifestyles.
Another insult to the taxpayers and future taxpayers is that many of those early retirees collect their guaranteed pensions and then take another job.
Many elected officials are heavily financed by unions, which are focused on entitlements for their current members. The unions, elected officials and bureaucrats have been very successful in manipulating the system to enrich themselves. Thus, no changes can be expected in the foreseeable future.
Even before those young folks can vote, our Golden State schools are on track to force substantial budgetary cutbacks on core education spending, as public schools around California are bracing for a crisis driven by skyrocketing worker pension costs that are expected to force districts to divert billions of dollars.
The GASB requirement for accounting and financial reporting standards now provides accountability and transparency for county, city and state budgets to show how those unfunded pension liabilities and expenses will be funded in the decades ahead, i.e., either tax increases, and/or a reduction in current services to meet those funding requirements.
The theory behind GASB was that maybe if the uninformed citizens can “see” the full impact of the pension tsunami that’s coming, they’ll either accept the rip off or revolt.
To get the government’s own house in order, California State Sen. John Moorlach is pursuing a 2017 “SB 32”-type initiative to cut California’s unfunded liabilities at CalPERS down from the current $168 billion to the near zero 1980 levels. It is a parallel approach to the decade-old emissions crusade to roll back state emissions to 1980 levels.
We would appreciate it if our representatives stop promoting the unsustainable defined benefit programs and come to grips with the real problems facing all Californians.
A few other problems that deserve some priority time and action from our Legislature are:
1) Affordable housing continues to be out of the reach of most citizens.
2) California’s energy costs for transportation fuels and electricity continue to be the most expensive in the country.
3) The mid-’70s pioneering California Environmental Quality Act (CEQA) has created a nightmare for those seeking affordable, conveniently located housing, workplaces and shopping centers.
Ronald Stein is founder of PTS Staffing Solutions, a technical staffing agency headquartered in Irvine.
