Archive for July, 2011
Excuse my logic but when considering the current quagmire known as the U.S. Economy, we must take a long hard look at one aspect of the pension system that has burgeoned to astronomical and gargantuan size. Namely we need to question pensions for one or two term politicians.
Now don’t get me wrong, the pension system isn’t the only economic ill. For starters, as I am fond of explaining to some people I know, in one single fateful day known as 9/11, the stock market lost 50% of its value which translated into something like trillions of dollars in value. People go around blaming then President George Bush for ruining the economy and he may have helped, but he didn’t fly those planes into the twin towers.
However, what I find incredible is the amount of fat in the nation’s pension system. The average worker working in the private sector say for 40 or 45 years can expect to draw a social security check of say $1,500 to $2,500 a month.
That’s peanuts compared to the pensions some public employees reap. Now please understand, my main objection is not with elected officials such as US senators or congressmen who serve the country for say 3, 4 or 5 terms. Some of these individuals could have earned much more in the private sector but opt for a career in public service as a way of giving back to the community.
My objection is with elected officials who serve say 4 or 6 years in the government and then upon reaching age 62 are awarded pensions that equal or exceed the amount our private sector worker mentioned above earns out of social security. Should a retired governor or U.S. Senator who served one term be receiving $30,000 to $40,000 or more per year for life?
Now consider the layers upon layers of government we are surrounded by. We have a president and a cabinet. Like his senate colleagues, a retired president draws $90,000 a year or more for his pension, which in most cases he doesn’t even need because of all the company boards he will sit on, speaking fees he will earn etc., etc. Then we have the Supreme Court. Senate and Congress. Governors and their huge staffs. State Senate and legislature. County government including such people as Freeholders and Surrogates (What do these people even do?). You have county authorities. Just recently it has been making news in my state of New Jersey how the Passaic County Sewerage Commission had more than 80 people making $100,000, a year or more, many the benefactors of nepotism until Governor Chris Christie pulled the plug on them. Imagine the pensions these guys would have been pulling in someday. Again, if a person makes a lifetime career of public service, give them a pension. But for the one and done crowd or people looking to get rich easy, I say tough luck.
As I began formulating the ideas for this blog, I answered a question for myself that I was planning to pose in another blog to be published at a future date. In that blog I was intending to put forth the question “Why do we have multi-millionaire and even billionaire businessmen and celebrities spending tens of millions of dollars to run for an office that only pays several hundred thousand a year?” In a good many cases, these individuals have altruistic motives. They want to help the country and give back to the people. However, in some cases, I believe the answer lies in the pension.
In this era where we watched the Bernie Madoff debacle unfold in the news, the bulk of many multi-millionaires fortunes are invested in all kinds of hedge funds, bonds, and other high risk “growth” funds such as Madoff’s. So yes, at this moment, the multi-millionaire guy is worth say $100 million. Yet things being as sketchy as they are, in five years he could be broke. Look at Mike Tyson. At his height he was worth a whopping $300 million! He’s not worth that today. Where did it all go?
So getting back to our multi-millionaire businessman, he knows instinctively that by the time he retires, he could be worth significantly less than he is in his current financially bloated position. So he runs for office. He knows if he wins and completes his term, he’s got a guaranteed middle to high five figure income stream for the remainder of his life which could be 20 or 30 years. This gives him leverage. He can keep playing with his fortune trying to increase it many times over with the security of knowing if it all goes bust he will still have a guaranteed income for retirement.
Now I am not saying every rich guy who runs for office is guilty of this. I think for example, H. Ross Perot who volunteered to work as president for no money captured the spirit of public service. He really wanted to help this country turn things around. He was worth just so much money, that he probably could never have run out and would never have needed the pension.
I don’t advocate complete elimination of pensions. Many people work 20, 30 or 40 years and deserve a secure retirement. Police officers, DPW workers, teachers and other hard working individuals deserve to be compensated upon retirement. However in the case of politicians who are one-termers, there was probably a good reason they only served one term. In most cases it’s just plain simple that they didn’t do a good job. In the case of these individuals I think we need to keep their hands out of the cookie jar.
Copyright 2011; Greg S.
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- This blog is dedicated to three individuals. First and foremost to Mr. Spock who often remarked “I find that highly illogical.” Second, to Andy Rooney who used to ask “Did you ever wonder…?”. Last to someone less famous than the aforementioned – a guy by the name of Steve J., my college dorm mate. Steve was an exceptional person who looked like Clint Eastwood and had the physical and mental prowess of that star. Yet he did terribly in a course entitled “Logic” which he said was the most difficult subject he ever studied in his life.