When You're in a Hole, Keep Digging
By Arnold Kling
New Jersey is $60 billion in the hole on pension funding and the Governor is planning on skipping payments in a “pension payment holiday” until 2012 so as to not increase property taxes.
Considering that the pension fund needs $118 billion to be fully funded, $60 billion in the hole is kind of a lot. I love the way that the solution is to not put any more money into the pension plan until 2012. No doubt, the Obama Administration’s “economic recovery package” will bring Federal tax money to the rescue. I am convinced that those of us who save for our own retirement are going to be taxed to pay for other people’s defined-benefit plans. For some reason, this crime bothers me even more than most other government crimes.
Coming soon: a “Medicare payment holiday,” in which the solution to the trillions of dollars of unfunded liabilities in Medicare is to divert payroll taxes elsewhere.