About Me

In writing the "About Me" portion of this blog I thought about the purpose of the blog - namely, preventing the growth of Socialism & stopping the Death Of Democracy in the American Republic & returning her to the "liberty to abundance" stage of our history. One word descriptions of people's philosophies or purposes are quite often inadequate. I feel that I am "liberal" meaning that I am broad minded, independent, generous, hospitable, & magnanimous. Under these terms "liberal" is a perfectly good word that has been corrupted over the years to mean the person is a left-winger or as Mark Levin more accurately wrote in his book "Liberty & Tyranny" a "statist" - someone looking for government or state control of society. I am certainly not that & have dedicated the blog to fighting this. I believe that I find what I am when I consider whether or not I am a "conservative" & specifically when I ask what is it that I am trying to conserve? It is the libertarian principles that America was founded upon & originally followed. That is the Return To Excellence that this blog is named for & is all about.

Monday, June 11, 2012

Responses - The People In Wisconsin, San Diego, & San Jose Are On To Something

Below are four responses to last night's subject message re the public sector unions' electoral defeat on June 5 in Wisconsin, San Diego, & San Jose.  Reponses #1 & #2 provide additional insight while #3 lets us know that Romney must do more.  Responder #4 takes the most modest public sector pension example I could think of, & despite all of the other statistics, graphs, & election results presented to the contrary incomprehensively (like where is the private sector counterpart to the public sector union worker realistically going to come up with $645,000 by age 55 to generate a similar income stream) comes to the conclusion that the problem is not in the design of the public sector pension plans but rather lies with the politicians who failed to fund them as if the rest of us would not have paid sooner rather than later.
---Response #1---
Doug - With a few word changes your article could reflect "PIGS" in Europe. Portugal, Ireland, Greece, and Spain want Germany to subsidize their early retirement while Germans work till 65.  Welcome to perversions of Socialism.
---Response #2---
To top the insults to the private sector if not all, at least most, of the public management have to belong to the union. I know of one, so the raises and benefits are all exploited by public workers and management. For the bargaining table there is no one bargaining for the tax payer. The tax payer is stuck with the bill. If someone falls behind on their taxes they will gladly take your property without a tear, and an interest rate higher than any credit card.
---Response #3---
Doug, as I have been saying for a long time - give people job benefits, without any cost to them - they will vote for you.
Re Wisconsin -  it was not a big win for Mitt Romney.  True, people voted against union people – but do not count BO out.  He will use other tactics to get votes and all of these tactics will involve the government printing press.
In fact, BO is now targeting Hispanic radio stations, and if he can get the Hispanics to come out and vote, then he has a good chance of winning.  In his radio programs BO tells them that he understands that family is very important to Hispanics -  if someone gets sick and the family has no assets government will pay their bills. That hits home with them.

Doug, as BO pushes for more social issues for the people, regardless of costs, Romney will have to come up with something to counter other than to say he creates jobs.
---Response #4---
Doug - You left out one number. Your hypothetical New Jersey state employee who earns $50,000 and retires at $27,000 has to have worked for the state for 29.7 years. So at almost 30 years of service, the hypothetical state employee receives slightly over half pay in deferred compensation. And that's a current employee. New hires are on a less generous plan and need to work 32.4 years to achieve the same benefit in retirement.

True, the employee can retire at 55 without penalty, but he or she would have to have started with the state at age 25 (age 22 under the new rules). Decide for yourself whether the deferred compensation for New Jersey state employees is excessive.

A soldier can retire at half pay with 20 years, and many private defined-benefit plans tend to peak out at 20 years and pay a greater percentage of salary up to that point.

Furthermore, ERISA requires private plans to vest after five years of service. State plans vest after 10, so a state employee who leaves after 9 years of service comes up empty.

Your private-sector person who saves $645,000 to get the same income stream can pass that amount at death onto his family. The state employee has nothing to pass on.

The problem in New Jersey is less with the design of the plan than it is with the politicians who failed to fund it. Now we are all paying, public employees and private-sector persons alike.


  1. Doug - As the author of Response #4, I call foul. The most modest public sector example you could think of was your example, not mine.

    Secondly, $645,000 is far more than it would cost to fund an annuity over 30 years sufficient to pay a pension beginning at age 55. Funding an annuity is the correct analysis, not saving enough to fund an income stream.

    I do agree with you, though, that 55 is a young age to start a retirement. That should be reformed in New Jersey.

    I hope that your readers possess the intellectual rigor to read past your comment and consider Response #4 itself.

    RTE – The link provided by the Manhattan Institute specified, for the example considered, that $645,000 was the amount of cash a private sector employee would need at the same retirement age as the public sector retiree (age 55) to purchase a guaranteed lifetime annuity yielding the same income as the public sector pension benefit.

    Estimated payment for a Single Premium Immediate Annuity, indexed to inflation on the same basis as the simulated public pension, with an insurer who assumes a 3% rate of return.

    Annual adjustments of 1.2% are available after 2 years.

  2. I appreciate that clarification. It had appeared from what you wrote earlier that the $645,000 figure was the amount one would have to accumulate in investments in order to produce a $27,000 annual yield.

    The required monthly savings to get to $645,000 over 30 years, assuming a 5% annual return, would be $775.

    For your information, the retirement formula for New Jersey teachers is the same as the one for other public employees, even though the plans are separate. The plan for police and firefighters is more generous.

  3. PS to the last comment: State employees in New Jersey contribute 6.5% of their gross salary to their pension. That figure will be going up on a sliding scale.