Tuesday, February 25, 2014

The Pension Gap in Perspective

“…COMPARED TO STATE ECONOMIES:  The total pension shortfall ‘is less than 0.2 percent of projected gross state product over the next 30 years’ – Center for Economic and Policy Research.

“COMPARED TO STATE BUDGETS: Pension costs ‘account for only 3.8 percent of state and local spending’ – Boston College.

“COMPARED TO CORPORATE WELFARE: The $1.38 trillion state pension gap is roughly $46 billion a year over 30 years. That is far less than the $120 billion a year in public revenues that states and localities lose to offshore tax loopholes and corporate subsidies – The New York Times & U.S. PIRG study…

“PENSIONS: JOB-CREATING ECONOMIC STIMULUS: Taxpayer subsidies to corporations are typically portrayed as job creating necessities, while public pensions are usually depicted as job-killing drains on state economies. But it is exactly the opposite – often times, corporate welfare does not produce promised economic benefits, while expenditures on defined-benefit pension plans typically create jobs and boost economies. Here’s what the National Institute on Retirement Security reported in 2012:

“BENEFITS AS STIMULUS:  For each dollar paid out in pension benefits, $2.37 in total economic output was supported.’

“CONTRIBUTIONS AS STIMULUS: ‘For every taxpayer dollar contributed to state and local pensions, $8.72 in total output was supported nationally.’

“PENSIONS AS JOB CREATORS: ‘Pension expenditures support 6.5 million jobs... represent(ing) a full 4.2 percentage points of the national labor force…’

“Thanks, in part, to the success of the Pew-Arnold partnership in distorting the conversation about public pensions, the budget debate in all these states is focused almost exclusively on slashing retiree benefits rather than on raising revenues and ending corporate subsidies – even though those subsidies are typically far larger than the pension shortfall. And with John Arnold as a role model, other billionaires are beginning to invest in the same dishonest message…

With all that money behind it, the movement to convert traditional public pensions into riskier and costlier schemes will almost certainly reach into every legislature in America. As an Arnold Foundation executive said in discussing his work pushing pension cuts in California, ‘We want to see if we can build momentum for a sustained reform effort in the state, and nationally.’”

For the Complete 32-page Report (with footnotes), Click Here.
I have read it. Please READ IT too.

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