A pension is a promise! A pension is a promise! A pension is a promise! These teachers are mad because their state wants to cut their retirement benefits. Find funding first! This conflict is about to hit most states. The problem is that the money hasn’t been set aside for years and years and years. City Journal Contributing Editor Daniel DiSalvo points out that unsustainable retirement promises now total trillions of dollars. But nobody cares. Nobody was paying attention. There’s very little sense of urgency. City Journal editor Steve Malanga struggles to get the media to pay attention. To a certain extent, I have sympathy with the media, because basically the media’s looking for what happens next, right? What’s Trump gonna say next? Or what’s he gonna tweet next? This is not something that’s going to happen next week or next month. But this is gonna be a big deal. A lot of people are gonna be hurt. We just don’t have enough money, and the amount of money that we have to put into this is just mountainous. How did this happen? Both parties, Democrats and Republicans have incentives to short the pension fund. For Democrats, if we can not put as much in, we can free up more money for greater public spending on public programs that we think are good. If we’re Republicans, we probably want to say cut taxes. Both are much more popular in terms of getting re-elected than putting money in a savings account. You betcha. 5 years from now, 10 years from now, they’re gonna have a problem. But 10 years from now somebody else is in office. The retirees, they put in their share. Where’s the city’s share? They were promised this and now you know, you’re 73 years old, and all of a sudden someone’s going to say well your monthly income is going to fall by 10% or 50%. They can’t just stiff the retirees. They have a contract. Well, they can if they go into bankruptcy. San Bernardino recently became the third California city to file bankruptcy. Several California cities have declared bankruptcy. So did Detroit. At some point, your debts are so great that you can’t afford to provide basic services to people. Police force, fire, protection, all of these services will be on the chopping block. No justice, no peace! No justice, no peace! The problem with our pension systems isn’t the system. Steven Kreisberg of the biggest government workers’ union says unions didn’t create this problem. Unions say, “You may not cut our pensions. It’s in the contract. We’re entitled to this.” Where’s the money going to come from? Taxpayers? There isn’t enough money in the world to pay your people. Well, that’s not true. There’s plenty of money to pay our people. Five trillion dollar unfunded liability. That’s a figure that’s used by some anti-pension zealots. As our president might call it, it’s fake news. If we apply the standards that the federal government demands that private sector pensions use, this is the number we come up with, five trillion dollars. The money isn’t there and you guys won’t budge an inch. That’s not true at all. I personally worked in the city of Detroit where we budged many inches. Let me be blunt: Detroit’s broke. When Detroit went bankrupt, unions did agree to reduce workers’ benefits. Detroit’s a case where the unions finally gave in. Because the federal bankruptcy judge created a precedent that said pensions could actually be cut. That was a shock to the unions and in some sense, that’s been a new and interesting precedent that’s called into question these strong legal protections that public pensions have so long enjoyed. They can’t just sit back and say well, we’re going to get paid no matter what. And yet even today, when we know pensions are underfunded, politicians still shortchange contributions. To make things even worse, some increase benefits. In California, in 1999, the unions helped elect Gray Davis. Governor Davis then gave them bigger pensions. The state of California offers some of the best employment benefits, like a CalPERS retirement pension plan. The legislators were told, “Listen, it’s not gonna cost the taxpayer anything. The stock market can pay for this.” That’s just wishful thinking. It’s irresponsible. I would say it’s more than wishful thinking. It borders on criminality, frankly. If after nine years of a bull market, we haven’t begun to fix this, when are we gonna fix it?” The union’s are not doing this. These pension plans are adopted by statute, okay? The union votes for the politicians who vote in a great pension. So you don’t like democracy. Public employee unions regularly lobby and seek to elect politicians who are going to offer them better compensation packages. They’ve been intimately involved in the whole system from the beginning. The unions have disproportionate political power. How do we have disproportionate political power when public employees are less than 10% of the population? You get out the vote. If we were able to get out the vote so well, there would be somebody different in the White House right now. The union says “this was a promise, a contract. You can’t just take it away.” The unions in the public sector have a much broader concept of what a promise is than everybody else. But it was a promise. No, it’s not a promise. When you … That’s the point. Politicians promised it. They said, “here’s what you could expect.” If I go to work for a company, right, and they give me a salary, the idea that I can always expect to make that salary, that five years from now if there’s a recession that my company couldn’t say to me, “Sorry, we’re gonna have to cut your salary.” That’s crazy. Nobody believes that. What’s the solution? Reduce the level of benefits and go to individual accounts. Like 401k’s, what most people in the private sector have. So instead of just a government promise, there’s an actual account with money in it? I can see it, I can see how it’s doing in the market. Unions generally oppose 401k’s. However, AFSCME now does say their members may have to take a cut. That’s what’s happened. That’s the facts John. Really? I thought that you argue we should not have to take a penny less. You argue that in courts. Well we argue, as a matter of legal right depending upon where we are, if you’ve earned something, that was part of the deal. If you want to say, “Look you’re going to have to get a little bit less going forward?” Sometimes we’ll fight over that. You see arguments. You see battles. There are winner and losers in every battle. Look at us, people! You could be next! Politicians and union bosses better pay attention because one day no matter what the promise, they simply won’t be able to keep it. Hands off my pension!