This is an interesting article that illustrates the problems associated with promising benefits that cannot be funded. During the tax reform activity last night, some groups used a combination of cutting spending and increasing taxes. Springfield, IL spent 20%-25% of its operations budget on pensions in 2012. The price of this problem is visible in the town's decaying infrastructure and inability to pay for day-to-day needs. What do you think Springfield should do in order to combat this growing problem? Will the solutions proposed in this article be sufficient?
I think the first logical step would be to quit the bump in pension payouts for people that retire around their hiring date. Other than that I'm not sure what steps to take to combat their problem. I think it's definitely a catch 22
ReplyDeleteThis is always the problem with expecting politicians to have any sort of long-term outlook. They are typically concerned with reelection, and as a result, can't look long-term, if even beyond the next fiscal year at all. The tax reform guy from one of the videos Tuesday night said it best, 'We need our policy makers to be looking long term, beyond even a 5-10 year outlook. Realistically though? They'll kick the can'
ReplyDeleteYou make a great point here!
DeleteI agree with the comment above, I think politicians definitely have a hard time looking at any significant long term outlook. The pensions have definitely got to stop, the only problem is that these workers expect this upon retirement. It's always hard to stop a program people think they "deserve" it is necessary but theres is no easy fix.
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