I run a small construction company with the help of my brother, my youngest son, and Hank, when he’s not mowing his yard. And Jay when he’s not in school or playing baseball. Or fishing. We try to build a couple of homes a year, sometimes more, sometimes less depending on the size and complexity of the project.
As part of the agreement, if the customers are happy with the final product, they pay us and we move on to the next project. Hopefully I have enough to pay everybody, buy my wife and grandkids something for their birthdays, and then put a little back for a rainy day.
That’s how it works, and that’s how it’s supposed to work The homeowners know that I can’t or won’t come back 15 or 20 years from now and ask them to pay me again, or ask their children or grandchildren to pay me again. The job was completed and the job was paid for. Period. Unfortunately, it doesn’t always work like that when the government is involved.
Most government employees are promised a pension when they retire, just as many private sector employees are promised a pension when they retire. It’s admirable that a person would plan ahead for their retirement, and if part of their pay consists of their employer contributing to and frugally managing their retirement account, they certainly are better off for it.
However, Hoosier taxpayers are justifiably concerned about the ever rising cost of government, even as government is feverishly trying to justify its ever rising cost. There is seldom a day goes by that we don’t hear of some ridiculous government spending program. A couple of weeks ago, the news was filled with the report of state legislators’ pension funds receiving a $4 to $1 match from taxpayers. As maddening as that program is, the $14 million taxpayers have contributed in the last 16 years is small potatoes compared to other pension contributions they are making.
When government promises a pension to its employees, it’s actually promising that taxpayers will continue to fund that pension. The government doesn’t always set the pension money aside, and even when it does, it doesn’t always leave it set aside. In order to feed its insatiable appetite, government often borrows from the pension funds that taxpayers have supported, leaving a massive debt for present and future taxpayers to settle.
Across Indiana, Hoosiers are on the hook for billions of dollars that have been borrowed from teachers and public employee retirement funds, and a lot of the taxes they are paying now, that should be applied to current services, are instead paying interest on borrowed money and repaying benefits that they or their parents have already paid.
And government doesn’t help things with the generous retirement plans it offers. Some departments offer a healthy retirement to employees after only 20 years of service, and at the age of 50. Sometimes less. Here in Wayne County, some members of the sheriff’s department qualify for nearly $35,000.00 a year retirement after only 8 years of service. It’s likely that a lot of these retirees will be drawing benefits for over 40 years. That means there is a real possibility that your great-grandchildren will be paying for the retirement of the current police force. We get a double whammy when an employee retires from one department, and then goes to work for another department, and ends up drawing a retirement from both.
Certainly government employees that provide essential services should be fairly compensated for their efforts, and that compensation should be adequate to fund a reasonable retirement plan. And certainly if they decide they want the government to administer that retirement plan, they certainly have that right, although in view of its past performance, I would question the wisdom of that decision.
One of the best ways to control government spending is to limit its access to the billions and trillions of dollars that should be in these funds, and let employees control their own accounts. Overall, that is the fairest plan for the taxpayers. And their employees.
(Cross posted from Rex’s blog, the BellCurve.)