March 7, 2011- With the recent spate of attacks on climate science and evolution, it should not be a surprise that traditional defined-benefit pensions in the public sector are now also under attack. There are powerful political actors in this country who are anxious to build a bridge back to the 19th century, taking us to a time where working people enjoyed few protections and could not count on sharing in the gains of economic growth.
The effort to weaken or destroy public-sector unions and take away their pensions is the latest battle in this larger war. As usual, the right has been busy making things up to push its agenda, confident that the media will not expose untrue claims.
At the center of the right's story is the view that governments are somehow being reckless or irresponsible when they provide guaranteed pensions for their workers. They tell us that these guaranteed benefits will bankrupt state and local governments, imposing impossible burdens on future taxpayers.
This story can be easily shown to be untrue. While the right has been scaring the public with talk of a trillion dollars in unfunded liability in state pensions, this sum can also be expressed as about 0.2 percent of state income over the time frame in which the liabilities will have to be paid.
In other words, if states raise 20 cents in taxes or cut 20 cents in other spending for every 100 dollars of future income, they will be able to meet their current pension obligations. This is not a trivial sum, but it doesn't seem likely to bankrupt our youth either.