Exiting Gov. David Paterson on NY Pension Crisis & Potential Meltdown in Nation in 2011 (video)
Posted By Vicki McClure Davidson on January 3, 2011
Post-Christmas debilitating blizzard conditions in NYC - now, exiting Gov. Paterson speaks out on NY pension crisis | Photo: CNN
While he is to be commended for being one of the few Democrat politicians in the nation who praised the tea party movement, exiting New York Gov. David Paterson should have spoken out and/or done something about the NY pension crisis — and the looming catastrophe it is creating for the economies of many other states — long before he left office this week.
From NY Daily News, Gov. David Paterson sounds pension alarm: On his last day in office, urges focus on crisis:
There is a new crisis on the horizon that threatens the solvency of local governments and the recovery of the U.S. economy: teetering public pension funds on the verge of insolvency, with the retirement security of millions of working Americans hanging in the balance.
In 2011, the health of these public funds will take center stage with the very real possibility of significant write-downs in pension asset pools at a time when most funds can ill-afford it. And while these problems were not created in a single year, immediate action will be required to avoid driving our economy deeper into the ditch of recession.
The structural problems of our public pension funds have started to emerge, and no amount of wishful thinking can replace the hard work of reforming them. We all have a stake – employers, employees, organized labor, government, regulators, lawmakers, investors and investment managers. Yet there exists no consensus, or even an informal dialogue, on how to proceed.
What is indisputable is that those solutions will require shared sacrifice.
This concern isn’t new for conservatives — FOX News Neil Fox’s Cavuto and Newsmax’s Christopher Ruddy discussed the selective outrage over AIG bonuses and the nation’s anticipated pension crisis back in March 2009.
Fox’s Cavuto Talks with Newsmax’s Ruddy on Coming Pension Crisis | 2009
From CNBC, Pension Crisis to Take Center Stage in ’11: Paterson:
Outgoing New York Democratic Gov. David Paterson cautioned that “everyone will suffer” if there’s a public pension meltdown in 2011.
“You might see a serious downgrade of their public asset pools, and that would create a major problem,” he told CNBC on Friday.
Unfunded pension liabilities in the United States are conservatively estimated at a trillion dollars a year, but two economics professors at Northwestern University and Rochester University estimate that it could be $2.24 trillion a year, he said.
“To put that in context, if GDP for 2009 was $14 trillion, we’re talking about a 7-29 percent share of our entire economy,” he went on to say. “And these pension funds, these funds will take center stage in 2011, because they’ve been able to carry off a lot of their bad assets.”
From NY Daily News, On final day, Paterson sounds alarm bell on pension crisis:
Gov. Paterson is not going from office quietly.
Paterson began his final day in office with a trip across the Hudson River to the studios of CNBC where – following up on his op-ed in today’s Daily News – sounded the alarm about a looming pension crisis.
The new year, according to Paterson, could see major upheaval in the nation’s public pension systems as years of bad investments and poor management finally take their toll.
“You might see a serious downgrade in 2011 of there asset pools and that would create a major problem,” Paterson said on CNBC.
“Everybody will suffer if there is a meltdown in pensions,” Paterson continued. “And in this country, it puts us in the position of having to make what is a financial and also a moral choice, which is are we going to hurt taxpayers who would have to write off this debt that they had nothing to do with or are we going to take those people who have provided the broad revenue basis from which we all have been able to live, those whoa re retirement and abandon them.”
Paterson did not offer any specific solutions but did call for all sides – employers, unions, investment managers, etc. – to come together and find creative solutions to the problem.
The governor said “old chestnuts” like Wall Street versus Main Street must be shelved to find a novel approach to dealing with the situation.
This story on pension abuse in Providence was reported in late December by Legal Insurrection just before the demotions were rescinded:
This is the sort of thing which infuriates taxpayers, with good reason.
No one is against fair compensation and fair pensions for firefighters, but once again union rules provide for abusive tactics, as highlighted in this Providence Journal story about two management fire officials in Providence who obtained demotions (yes, demotions) on the eve of retirement so that they could get union COLAs on their pensions while still being able to use their management salaries to calculate the base pension benefit:
Two management-level firefighters are back among the union ranks, at their request, an action decried by two City Council members who say it was done to increase their pensions.
Fire Chief George S. Farrell said he granted the demotion in rank because Deputy Assistant Chief Daniel J. Crowley and Michael F. Morgan, the department’s investigative officer, wanted to “prolong” and “protect” their careers.
With the lower rank of first-class firefighter, the near-retirement employees can benefit from the 3-percent compounding cost-of-living-adjustments provided to union members hired before July 1, 2010. They will also receive pension benefits based on their higher, management salaries if they retire now. (Pension benefits are based on the highest of the last three years of service.)
More abuse of pension fund monies…
FOX Business Network: Pension Fund Spends $30M to Renovate $1M Building
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EPA, FDA, FCC, DOE, DOT, TSA etc. quietly getting massive funding + massively expanding while 1st responders et al -getting budgets/pension cuts. Obama’s ‘civilain’ army he promised. By-passing our legislative branch of gov – making laws by decree to control your movements, what u ‘hear’, ur food supply, ur water, medical needs/records, soon ur guns & confiscate ur wealth through fees, taxes and currency controls. Buy phys silver w/ fiat dollars, crash their funding source & the NWO masters.
Paterson is one of the least offensive democrats to hold an office in the country- sorry to see him go from NY. He did an OK job even though NYC is just about to go belly up.