The battle between Governor Walker and the public-sector unions in Wisconsin has helped clarify the depth and complexity of the problem that many states are facing as a result of (among other things) retirement promises made over the years that now threaten to drown state budgets in red ink.
But what exactly is the nature of the pension crisis? And what realistically can be done about it? If governors and state legislators were really serious about averting the coming disaster, what steps should they take?
In the forthcoming Spring 2011 issue of
National Affairs, Josh Barro lays out the problem and offers some concrete and achievable solutions. The issue (packed with many other timely and thoughtful essays too) will be in stores and online in a few weeks—or you could always subscribe
here. But here for now, as a preview, is
Barro’s essay.
The public employee pension issue is complicated and there's no easy fix that everyone will like, but we can all agree there's a problem when retired police officers and fire fighters receive six-figure pensions that equal or exceed the salaries they earned while on active duty.
One of my cousins took early retirement from a big-city fire department and went to work for the local steel mill's fire department. He made more money on his early-retirement pension than he did when he was an active-duty fire fighter. It's not just police and fire chiefs who are becoming millionaires on their retirement benefits, but rank-and-file public workers as well.
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