“Pensions as stimulus”?
Apparently, we’re supposed to believe that it’s a net good to be spending more taxpayer dollars on pensions because it’s good for the economy:
While several speakers were telling the House Finance Committee last week that cities and towns were spending too much on employee pensions, another, representing public school teachers argued that the state and its municipalities should be concerned about spending too little.
According to Patrick Crowley, an assistant director at the National Education Association of Rhode Island, putting money into public-employee pension plans is a good investment. So good that every $1 contributed by taxpayers reaps a return of $4.56 in local economic activity.
Crowley was citing figures from the National Institute on Retirement Security, which concluded in a 2009 “Pensionomics” report that the yield was good because investment earnings and employee contributions provide “the lion’s share” of employee pensions. The people receiving those pensions then go out and spend money, helping the local economy, the report says.
Crowley’s statement led to a spirited exchange with Rep. Laurence W. Ehrhardt, R-North Kingstown, who questioned the Crowley’s logic.
“That dollar comes from someone,” Ehrhardt said. “Doesn’t it then have the same effect on the other end?”
“No, it doesn’t” Crowley responded.
Ehrhardt listened to the explanation but gave no ground.
“I have a graduate degree in economics,” he said when Crowley had finished. “I completely disagree with you.”
Well, maybe it is good for the local economy…in Florida. In actuality, the tax dollars that go towards pensions are only a piece of the problem–maybe the least. The ability to retire at a relatively young age with a generous benefit package means more money spent over a longer time. To say nothing of the penchant for retirees to embark on a second tax-payer financed career (and their pensions, benefits, etc.) and the buybacks, buy-ins, etc.