An article in The New York Times gives us a glimpse of why our economy, like economies around the world, is in increasing peril:
According to pension data collected by The New York Times from the city and state, about 3,700 retired public workers in New York are now getting pensions of more than $100,000 a year, exempt from state and local taxes. The data belie official reports that the average state pension is a modest $18,000, or $38,000 for retired police officers and firefighters. (The average is low, in part, because it includes people who worked in government only part time, or just a few years, as well as surviving spouses getting partial benefits.)
Roughly one of every 250 retired public workers in New York is collecting a six-figure pension, and that group is expected to grow rapidly in coming years, based on the number of highly paid people in the pipeline.
Some will receive the big pensions for decades. Thirteen New York City police officers recently retired at age 40 with pensions above $100,000 a year; nine did so in their 30s. The plan's public information officer said that the very young retirees had qualified for special disability pensions, which are 50 percent larger than ordinary police pensions. He said several dozen of the highest-paid New York City police retirees had disabilities related to 9/11 and the rest of the disabilities resulted from injuries in the line of duty.
These entitlements are unsustainable. The beleaguered taxpayers of New York must pay people in their thirties and forties over $100,000 a year for the rest of their lives, and then when they're eligible for Social Security they'll get that, too.
New York is a synecdoche for the United States. Public pensions, welfare, health care and public spending of all kinds require an ever increasing tax burden on those who are still working, but this diminishing income pool can't bear this staggering load indefinitely. Almost half the people in the country are paying no income tax so half the population is essentially getting a free ride paid for by the other half. The socio-economic pyramid is beginning to look more like a flattened-out Hershey's kiss.
It might be possible to pay for our extravagance if the administration and Congress were enacting policies which stimulated business growth, but they're not. There's only one way out of the mess they've gotten us into and that's to decrease government spending and reduce the regulatory and tax burdens they've placed on businesses. Unfortunately, the current crowd in D.C. is ideologically averse to reducing taxes and cutting spending, and, in fact, they're eager to do just the opposite.
November can't come soon enough.
RLC