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Collective bargaining, especially when it comes to teachers and teachers unions has become increasingly dangerous to states and their taxpayers. Consistently we see collective bargaining awarding state and local employees total compensation packages that far outstrip those found in the private sector (http://bit.ly/pZofYR). And when it comes to schools we’re not seeing much bang for our buck, and as a result, we continue to lose confidence in public schools despite putting more and more money into it (http://bit.ly/LmszmU).
When you see stories like this it’s no wonder that as we continue to pour money into public education, the general public continues to lose confidence in public education (http://bit.ly/LmszmU).
The problem is that all reason is thrown out the door when these contracts are negotiated. Far too often union contracts are negotiated with wildly optimistic economic union assumptions that lead to massive unfunded liability (http://on.wsj.com/qB3BON). If contracts were negotiated reasonably, many of theses cities could avoided these harsh realities.
In response to:

Public Pensions Fail Simple Math

Phil323 Wrote: Jul 26, 2012 4:27 PM
The current public pension system is a disaster. Deals are being brokered on completely ridiculous economic assumptions (http://on.wsj.com/qB3BON), and it was only a matter a time before a number of them totally ran out of money. However, it’s not just unions to blame. Politicians who gave out these deals, fearing the lobbying weight that unions hold (http://bit.ly/HcCfwK) deserve as much blame too. These cities had opportunities to fix things, but chose not to risk the political fallout (http://bit.ly/PSZq4W). It’s easy to negotiate a contract you know you can pass off to the next wave of politicians. It’s not all that surprising to see the wave of bankruptcies that are starting to sweep the nation considering these circumstances.
Given the fact that unions significant financial impact on elections (http://bit.ly/HcCfwK), leads usually directly to unsustainable contracts (http://bit.ly/pZofYR), this was definitely a good decision.  We’ve seen entire states pushed to the precipice of insolvency because of unsustainable contracts that unions negotiate (http://nyti.ms/wn7HlE), so hopefully we’ll see a little bit less of this going forward.
As was made all the more clear recently (http://bit.ly/LOb0J5), pension liability is growing more and more dangerous. The longer states and cities drag their feet to implement reform, the sooner they’ll end up like Rhode Island, pushed to the precipice of total insolvency due to pension mismanagement (http://nyti.ms/wn7HlE).
In response to:

Public Unions Bankrupt Illinois

Phil323 Wrote: Apr 24, 2012 5:01 PM
For a while now we’ve seen that pension liabilities are severely underreported (http://on.wsj.com/qB3BON), and in the end, it’s the taxpayers that suffer as a result, especially in states like Illinois (http://nyti.ms/p9JEUG). Until these compensation contracts aren’t hijacked by unions and partisan politics (http://bit.ly/o2vxdp), these issues will continue to persist until inevitable insolvency.
The problem is that it’s very hard to believe that these contracts have been negotiated in good faith. When you have unions negotiating with the officials that they put in office through aggressive lobbying it’s not hard to see how you end up with these bad contracts. It’s the reason FDR said, “The process of collective bargaining, as usually understood, cannot be transplanted into the public service” (http://bit.ly/o2vxdp). To simply shrug at unions role in this debacle is disingenuous, and will only hurt the ability of states to stay solvent moving forward.
Pensions are becoming more and more volatile, and it’s hard to find anywhere more so than in Illinois. With liabilities mounting and returns underestimated (http://on.wsj.com/qB3BON), the danger to taxpayers will continue to grow (http://nyti.ms/p9JEUG). If some form of reform isn’t introduced to state it won’t be long before the state ends up like Rhode Island, on the brink of total insolvency due to pension mismanagement (http://nyti.ms/wn7HlE).
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