As Susie Madrak has explained, state legislators’ past sleights-of-hand have hidden pension liabilities rather than pay for them. Now that the bills are coming due, and have been compounded by the recession, conservatives and others are blaming the retirees by arguing that pensions are too lavish and expensive. Today, in words reminiscent of Mitt Romney’s “47%” comments, which probably helped him lose the election, Stuart Varney and the Fox & Friends crew painted retirees as “takers” bleeding states to death.
After a graphic asking, “Who’s Ruining the ECONOMY?” took over the screen, Gretchen Carlson asked, by way of introduction, “Are you thinking about buying a house right now? Well, make sure you avoid these 11 states… Why? Because they’re more worried about helping the takers in those states, apparently, than the money makers.”
The discussion arose from an article by Forbes’ Bill Baldwin who identified those “death spiral states” where “private sector workers are outnumbered by folks dependent on government.” The gist of the article is that those states are in such bad fiscal shape that one should not buy a house, buy bonds or open a business in any of them.
Not surprisingly, Varney pointed to cutting pensions as the solution, thereby suggesting that retirees are the chief “takers.”
Pensions: that’s what’s driving these states to financial problems. They owe so much on their pension liabilities, they simply can’t pay… Look at Illinois. They have an unfunded liability of $230 billion for that one state, just in pensions. They gotta fix that and they fix the state.
Putting aside the fact that Reuters just pegged the Illinois liability at $96.8 billion (less than half of Varney’s calculation), Varney neglected to point out that, as Reuters reported, investment losses and insufficient employer contributions were the two factors most responsible for the shortfall.
As Kenneth Quinnell noted last year,
The conventional wisdom response to the pension losses is to claim that it shows that pensions are too expensive and we should get rid of them. The problem with that is that if state governments invested money more wisely and raised revenue in a responsible way, the pensions are easy to fund and, more importantly, they are part of the promise that has already been made to state workers. These pensions are part of the compensation that was offered to workers to get them to take on jobs that are vital and often thankless. Cutting pensions effectively means cutting compensation for state employees, who are already under assault from every direction. It also means that we, as a society, renege on our promises and it means that high quality employees are likely to find work elsewhere, something that drives down the quality of services provided by government, further eroding the economy and the quality of life of all Americans.
But rather than even mention improvements to raising revenues, the Fox News has been depicting retirees and public-sector workers as chateaubriand-craving and thankless moochers. Old-age welfare queens, if you will, sucking at the teat of the public trough. I guess police, firefighters, teachers, librarians and road crews should just work until they drop – and thank the “makers” for making it all possible.