Retirement clawbacks

Here’s a bit of good news: public sector retirees in Central Falls, RI are being asked to “give back” some of their retirement benefits because…there’s no money!

 

http://www.nytimes.com/2011/07/20/us/20centralfalls.html?partner=rss&emc=rss

I suspect that many of those affected will have precious few other retirement benefits to fall back upon. This will hurt!

 

I venture that most Liberal-Lefties believe that when the State promises them a pension and/or other benefits, the State magically prints the money needed and/or simply returns what people originally put in. It’s pretty well recognized, I propose, that emotion-driven Liberals can’t do math (I hereby introduce Barack Obama and Nancy Pelosi as witnesses for the prosecution).  By contrast, we conservatives know how pension systems really work: pension funds invest in the economy in order to pay benefits from economic profits earned.

 

I’ve always been amazed at how Liberal Lefties, for the most part level-1 thinkers, can’t make the connection between a thriving, profit-driven economy and the benefits that they believe to be owed to them. After all, it is economic profits that generate both tax revenues and pension-fund earnings.

 

The flip side, of course, is that if you keep attacking the “profits” earned by “greedy” companies, you end up drying all these retirement and other social benefits at their source, which is what is happening in Rhode Island.

 

So, what do Liberal-Lefties expect to have happen when they attack “greedy” corporations and take away their ability and incentive to generate profits? You get a) fewer goods and services, b) higher prices due to scarcity and declining dollar value, and c) pension funds going bust.

 

So, go ahead and attack “greedy” oil and coal companies, but learn to live with less oil and coal and much higher energy prices. Go ahead, attack “greedy” pharmaceutical companies, but learn to live without new pharmaceuticals and crappy quality. Want to shut down industry and limit  development for a cleaner environment? Well, try to do that as tax revenues dry up because profits have disappeared.

 

What is happening in Rhode Island will soon happen in California, Illinois, New York and elsewhere writ large. This will also happen with Social Security and Medicare, as tax revenues dry up.

 

So, why is this good news? Because, when older consumers and Liberal Lefties finally make the connection between healthy, profit-generating economies and the solvency of their pension plans, then perhaps attitudes will start changing for the better. I feel sorry for the individual retirees affected. But I remain hopeful that this will be the beginning of a great awakening that will benefit us all.