FDR was right

Government employees should not be able to bargain collectively for wages and benefits. It has led to the pension crisis in this country that is going to cause enormous amounts of upheaval and civil disruption. Stephen Moore’s account of what’s going on in Scranton, Penn., is one example, though the number of examples from California make the point more vivid.

My current hometown, Omaha, Neb., for all its midwestern sensibility, has allowed its public employee pensions to get out of control, becoming what Warren Buffett described as a “gigantic financial tapeworm” eating up the resources of its host, the city government, funded of course by the taxpaying private citizens. There does seem to be signs of hopeful progress, as at least one of the unions has agreed to a new contract with pension reforms starting in January 2015. But nationwide, it doesn’t seem the problem is generally improving as a function of government reforms; recent stock market returns have helped, but that’s not a very reliable plan.

The question that nags at me as a citizen, of course, is what happens when the next crash comes and cities start failing?

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