Truth, Lies and In Between

Unions are killing the economy. One city at a time. I’m talking public sector unions. The other unions contribute to the high price of goods and services that you see every day, I’ll pick at that bone some other time.

But when it comes to public sector employee unions, that money comes out of the pockets of the tax payers.

What do unions want? More of our money in pension benefits and lifetime employment regardless of performance. The city, or state can’t afford it? Too bad! Raise taxes on everyone else to pay for it.

With the realities of the economic situation in America, most people are waking up to the fact the PSUs are more of a problem than most thought, and that they drain the coffers of whatever municipality they are in, with little regard to the consequences of their actions.

Reap what you sow morons.

Bloated Union Contracts Have Busted State Budgets

Is it possible that the real divide in the United States today is between unions and… everybody else? Consider the issues making headlines: education reform, busted state budgets, the battle to recall Wisconsin Governor Scott Walker, free trade agreements, Occupy Wall Street,  the fight to make Indiana a right-to-work state. What these stories have in common is the waning influence of organized labor and the all-out battle by union leaders to hold on.

Take the Obama Administration’s Race to the Top initiative. Education Secretary Duncan recently warned that several states, including New York, might not receive monies earlier awarded through that program because they have not followed through on required reforms. The stumbling block? Teacher evaluations. In New York, the opposition to proposed reforms by unions – unions that constantly complain about inadequate funding — could cost the state hundreds of millions of dollars.

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We also have this gem:

Private vs. Public Defined-Benefit Pensions

Back in December, the House passed a bill that would offset a one-year extension of the payroll-tax cut with, among other things, a reform of the federal pension system. With only a few weeks left until the payroll-tax cut extension expires, the issue is back on the table.

As I have said before, ideally the cut should be offset with a reduction in Social Security benefits. However, a structural reform of the federal pensions is also an option. In particular, a reform option that would get rid once and for all of the defined-benefit plans would be a great improvement.

The vast majority of full-time civilian federal workers receive roughly half of their retirement compensation through their defined-benefit pension plans (the rest comes from Social Security). The defined-benefit plans promise workers a guaranteed stream of income through retirement, based on earnings and time served, not actual savings toward retirement. As employers in the private sector already know from high-profile defaults such as LTV Steel’s, the promise of guaranteed income based only on earnings and time served is a recipe for fiscal disaster. While nearly 100 percent of full-time civilian federal employees receive some form of defined-benefit pension, only 22 percent of pensioned workers in the private sector are afforded this benefit.

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