There is a dirty secret about state entitlements that liberals don’t want you to know. The collection of a state pension increases the chances that a pensioner will live in poverty. That’s because money put aside for state-guaranteed benefits can not be safely invested at rates that provide for more than a modest retirement unless the state subsidizes retirement benefits through taxes or if retirement savings are invested in riskier, higher yielding investments. Since governments are loath to raise taxes to subsidize a riskless retirement, benefits are eventually reduced. It works that way in London and Moscow as well as Madison...
John, lots of good information but lacking much of the cause and effect of government payroll. It isn't just the entitlements that are breaking the bank. Bloated government and inflated salaries are increasing cost beyond the ability of the private sector to pay them. Entitlements are tied to salary, the more they make the more they get when they retire. Since 2005 with a huge jump in 2007 government employees received about 40% more and 80-times higher benefits than equivalent private sector workers and according to government's own reports, it takes 2.3 government employes to produce as much as private sector workers. Half the work at twice the pay, and no actual entitlement contributions, their pay is taxes!
- Brennan: We wouldn’t do a “tremendous” amount of spying, hacking, and monitoring of Congress Ed Morrissey 23 minutes ago
- WaPo: Hillary adviser raised funds illegally for 2008 shadow campaign? Ed Morrissey 1 hour ago
- Oh, by the way: Obama just quietly suspended ObamaCare’s individual mandate until 2016 Allahpundit 1 hour ago
- Video: Oh, it’s HBO! Ed Morrissey 1 hour ago
- Issa releases scathing report on Lerner Ed Morrissey 2 hours ago
- Obama: Health insurance isn’t expensive – just cancel cable and phones; Update: White House responds Ed Morrissey 3 hours ago