The New Financial Class War?
by Leo Kolivakis
Earlier this week, I read an interesting comment by Damien Hoffman, Are Private and Public Employees Headed for War?:
American Enterprise Institute President Arthur C. Brooks might be an emerging leader of the intellectual side of the Tea Party movement (Cf. the emotional side). He raises an interesting point I have been hearing a lot lately by people in states with massive public pension liabilities: “The disparity [between public and private sector benefits] is so large and so unfair, a day of reckoning is coming.”
When I was recently visiting family in New Jersey, all they could discuss was their animosity toward police officers retiring in their 40′s with full pensions, teachers receiving 4% a year raises despite the economic recession, and politicians who keep signing contracts for more unsustainable and unfundable public sector compensation programs. Given the anger coupled with their very reasonable insights, I could easily see how this issue will reach an ugly head.
However, one thing Brooks and many private sector employees fail to also consider are the ~10 million private pensioned people lobbying hard for a government bailout. And I don’t think anyone has yet forgotten the Trillions in liabilities we are all sharing for the private finance sector bailout in 2008 and 2009.
Thus, I don’t think this is a public versus private sector issue as much as an issue of people incorrectly believing that 1) there are guarantees in capitalism, and 2) taxpayers can sustain irrational retirement benefits for public sector retirees.
There are NO Guarantees in Capitalism
I repeat: there are no guarantees in capitalism. If the US is to recreate one of the greatest economies in the world, we must end the practice of aiding businesses and programs which would otherwise go bankrupt without government subsidy. Once guarantees are offered to a privileged group of people, a society ends up in the current tit-for-tat gameplay currently reaching elevated heights in the US.