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Rhode Island – A public sector pension plan which doesn’t make anything

Rhode Island – A public sector pension plan which doesn’t make anything

You know about the RI pension mess, because I’ve been pounding that issue pretty much since the founding of this blog three years ago.

The New York Times takes a devastating look at Rhode Island, The Little State With a Big Mess (h/t @amandacarpenter):

ON the night of Sept. 8, Gina M. Raimondo, a financier by trade, rolled up here with news no one wanted to hear: Rhode Island, she declared, was going broke.

Maybe not today, and maybe not tomorrow. But if current trends held, Ms. Raimondo warned, the Ocean State would soon look like Athens on the Narragansett: undersized and overextended. Its economy would wither. Jobs would vanish. The state would be hollowed out.

It is not the sort of message you might expect from Ms. Raimondo, a proud daughter of Providence, a successful venture capitalist and, not least, the current general treasurer of Rhode Island. But it is a message worth hearing. The smallest state in the union, it turns out, has a very big debt problem.

After decades of drift, denial and inaction, Rhode Island’s $14.8 billion pension system is in crisis. Ten cents of every state tax dollar now goes to retired public workers. Before long, Ms. Raimondo has been cautioning in whistle-stops here and across the state, that figure will climb perilously toward 20 cents….

In some ways, the central question is not only what the government owes to pensioners but what citizens owe to one another.

That last sentence hits the nail on the head.  In Rhode Island, the citizenry is being asked to spend increasing percentages of its income and assets not for the general welfare, but for the welfare of a relatively small percentage of the population who have state and municipal pensions.

It’s often joked that General Motors is a pension plan which makes automobiles.  Rhode Island is in worse shape.  Rhode Island is becoming a public sector pension plan which doesn’t make anything.

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Comments

As a former Rhode Islander I’ve been watching this melodrama for the past few years.

Rhode Island’s problems have deep roots dating back to the 1930’s when the state’s Republican leadership was ousted.

Then came the liberal democrats and union influence. Over the intervening years through the 1970’s, most of the large national corporations were chased out due to state policies that were anti-business.

At the same time, politicos on a statewide basis began the give away of the peoples money through the granting of generous pensions that were an actuarial nightmare.

Now, that nightmare is upon the state and being mindful of the continuing strong democrat/labor influence the outcome is not rosy be any means.

The current special session of the General Assembly will be the telling factor on just how bad this is going to get.

My confidence level is… Well, er.. Near zero for real solutions.

As long as RI votes in kooky dims the likes of Sheldon Whitehouse and Patrick Kennedy, they are asking for bankruptcy. We have never, to my knowledge, had a state go bankrupt and I shudder to think what will happen to the citizens if it happens. Isn’t it a pity that all across the country the biggest load the citizens have to carry are government pensions. These pensions are tearing this country apart and the unions still fight to keep them status quo. Or not even that, they want more.

Patrick “Patches” Kennedy is gone and was replaced by the splendiferous David Cicilline who as Providence’s former mayor left the city in financial shambles!

In this case, the replacement might prove to be worse than the vanquished…

We don’t appreciate the other states telling us what they think we should do.

We entered into a contract.

We appreciate what they’ve done for us.

We are happy to honor our contract.

You do what you want to do in your state.

We will pay for our choices in the past and into the future.

Butt out.

    Troll Feeder in reply to crash712345. | October 23, 2011 at 9:41 pm

    crash, no offense, but you got it backwards, son.

    When the bill comes due, and you can’t pay it, remember that this one’s all on you. Californians want to live in the dark; you Rhode Islanders want to let your local pols buy union votes with your childrens’ inheritances. That’s the cost of living where all y’all live.

    When you’re flat broke busted and want to start begging for a federal handout to make it all go away, remember that butt out is all we from you, too.

      You got that right, T/F. The answer, I’m sure, will be to jack up taxes. Oh wait – Link Chafee already thought of that! Except they won’t tax the yacht industry, so certain Mass senators can keep their boats bobbing in Newport harbor for free. At least the beaches are nice (until they tax those beyond belief too).

      Sincerely,
      A Middletown resident “butt-ing in.”

    bobby b in reply to crash712345. | October 23, 2011 at 10:30 pm

    “We entered into a contract.”

    Yep. But only after your union contributed heavily to the politicians who became “the government” with which your unions “negotiated.”

    I place “negotiated” in quotation marks to indicate the ironical context that then existed – that there is no true negotiation when the agent who presumably is acting on behalf of The People has actually been bought and paid for by your unions.

    This is fraud. This is a violation of a duty on the part of the agent, and bribery on the part of the union. Why should ordinary taxpaying citizens be bound to continue making outrageously high pension payments that were “contracted for” through such a scam? Why should public employees expect to be able to simply crow “we have a contract” and never need to acknowledge how that contract came to be?

    The irony of a bunch of coniving thieves invoking the sanctity of contract in order to perpetuate ongoing theft is rich. Your only power arises because your opponent has honor and you have none.

    You need to hope and pray that you don’t milk this particular situation too far – so far as to cause them to abandon their honor as easily as you did yours. You have far more to lose than they do. What happens to you when a flat-broke citizenry decides that contracts that were “negotiated” and signed – supposedly on behalf of The People – by bought-and-paid-for elected officials that call for outrageous pension payments constitutes “odious debt”?

Don’t worry R.I. Obama will ride in on his unicorn and bail you out with money from the other 56 states!

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That final paragraph is beautiful.

[…] Jacobson of Legal Insurrection has been following the death spiral that is RI pensions: You know about the RI pension mess, because I’ve been pounding that issue pretty much since the […]

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