Sunday, January 6, 2013

No Surprise that the Illinois Policy Institute Does Not Like the Nekritz-Biss Funding Guarantee for Pension Payments

[What Is the Illinois Policy Institute (IPI)?]

"The Illinois Policy Institute is dedicated to promoting the principles of liberty in all levels of government. While the word liberty can be interpreted in many ways and applied to many different arenas we focus specifically on economic liberty and free market principles…

"The Illinois Policy Institute’s approach is to transform liberty principles into marketable policies that become law. The ultimate sign of success is when free market ideas are turned into law and change lives for the better. What does this look like? Individuals and businesses become more prosperous without the fear of government favoritism or interference…

[What is one of the fears of the Illinois Policy Institute?]

"A major component of the Nekritz-Biss pension proposal is a funding guarantee for pension payments. The proposal says: Beginning July 1, 2013, the State shall be contractually obligated to contribute to the System under Section 2-124 in each State fiscal year an amount not less than the sum of (i) the State's normal cost for that year and (ii) the portion of the unfunded accrued liability assigned to that year by law in accordance with a schedule that distributes payments equitably over a reasonable period of time and in accordance with accepted actuarial practices…

[What questions are the IPI members asking regarding guaranteed funding?]:

"What happens when the markets take another downturn? […] What kind of priority would the pension payment get at the Comptroller’s office? […]  What happens if the proposed funding schedule is not in accordance with accepted actuarial practices? […] Can the systems change their actuarial assumptions in order to force greater contributions? […]”

Indeed, the Illinois Policy Institute’s focus is on “economic liberty and free market principles.” What are these ideologies?

“Free market principles” are supported by neo-conservatism or neo-liberalism and perpetuated by a “corporatists’ crusade”; they are aligned with the policies of the “Chicago School” ideologues, the World Trade Organization and the International Monetary Fund. These doctrines perpetrate a blitzkrieg deconstruction of the middle class, privatization of public ownership and industry (downsizing and parceling out public companies and services to private interests), government deregulation and cuts to spending (thus, stimulating deep economic recessions) and cutbacks or the elimination of the public sphere and all social funding – hence, turning the working class into the “disposable poor” – to loosen control of the flow of money and to produce “freer trade” in the global market marked by an intransigent belief that “it should be left to correct itself.” Global free market theory has surfed “the waves of fear and disorientation” while advancing an ideology of “unfettered capitalism,” leaving inequality and degradation in its wake (Naomi Klein, award-winning journalist, fellow at the London School of Economics, author and filmmaker).

The free market theory caters to self-interested desires and profit to the detriment of other peoples’ lives, all the while promising “freedom and prosperity.” Free market principles advocate that the rich and poor should be taxed at the same flat rate, despite creating a vast inequity; that, for example, education, health care, retirement pensions, national parks (and most any function intrinsic to essential governing) become privatized; that publicly-owned companies, services and their assets be auctioned off to private investors; and that besides allocating vast amounts of wealth and resources from public to private ownership, that in the free market the transfer of private debts to the public sector while public ownership is systematically dismantled ironically continue...

For further analysis, read Global Free Market: A Perspective and Admonition.

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