The Ghosts of Christmases Past

Haunted by public sector pensions

At the beginning of the Dickens classic, “A Christmas Carol,” Ebenezer Scrooge wouldn't give so much as a farthing to the poor. However, he also didn't reach into the pockets of others and spend their money so irresponsibly that it risked putting them and their children in the poorhouse.

Sticking to the Dickens theme, it is appropriate to point out that every man, woman and child in this nation is haunted by the ghosts of Christmases past. This is a fact of life, not only in deep, dark December, but 365 days a year. 

One estimate of how much taxpayers owe for underfunded public employee pensions in the United States put the red ink at $115 trillion. This — probably conservative — estimate was made a year and a half ago. It has undoubtedly increased since then.

Let's pause here to once again describe $1 trillion. A four-inch stack of $1,000 bills in your hand makes you a millionaire. To reach just $1 trillion, the stack would have to be 67 miles high.

It is repeatedly said that the trillions of dollars we owe on these unfunded pensions is so staggering that it can't be ignored. In reality it is so staggering that, because of our sense of helplessness, we are virtually forced to ignore it. Doing otherwise would mean living day to day in despair.

Who is to blame? Many would point fingers at the unions. In the 1960s and 1970s the unions, foreseeing the eventual decline of large labor-intensive industries in the private sector, began moving into the growing government sector.

But indicting the unions would be misplacing the guilt.

The fatal flaw in government unionism has always been on the government side of the equation. Government unions wouldn't exist without initial government approval. Then, after granting its approval, the government side failed to protect the public at the bargaining table.

In the private sector, businesses can't ignore economic reality by giving in to unrealistic union demands. They open their books and say, “look, we've had a lousy couple of years. We have to cut back or go under. We can't give you what you want.”

That reality check doesn't apply to government, which is always bargaining with other people's money. Those “other people” are us, the taxpayers. Over the decades, when faced with unpopular choices of cutting services or raising taxes, government officials have given unions most of what they asked for and left the tab to be picked up by future generations.

Now, with the average federal civil servant compensation package at $123,049 a year, we're looking at unfunded pension costs beyond imagination. And the looming question is: When will the day of reckoning arrive?

Every step that brought us to our current situation was taken under the guise of being made for the public good. Those decisions, the ghosts of those past years, all those past Christmases, continue to gather around us menacingly.

We live in the only nation in history that was started by leaders who unashamedly declared government as something to be distrusted and feared. Thomas Jefferson openly defined government as “evil,” a necessary evil but an evil nonetheless.

Today, politicians of both major political parties stand at podiums beneath Jefferson's portrait. But how many would have the courage to openly proclaim that government is something to be feared or to say that it is evil?

Individuals who make a fraction of the mistakes and commit violations of common sense the way governments do would be considered lunatics. Yet we watch governments go from folly to folly but rarely connect the dots.

Jefferson was expressing the attitude and spirit behind the American dream – a people must limit the freedom of their government or government will limit the freedom of the people.

Leaders who understand the corruptive nature of government have been too scarce for a long, long time. This has been the primary deficiency from which our political process has suffered.

Whether the issue is the monstrous public pension debt or any of the other messes our government has created, only leaders who possess this key ingredient can guide us to the right path.

Unfortunately, it will likely take an actual crisis — not just an impending crisis — to bring us back to our roots. Maybe then we can dispel the ghosts of the past and make Christmases yet to come all the better for having done so.

Editor’s Note: Jack Spencer is Capitol Affairs Specialist for Michigan Capitol Confidential. He is a veteran Lansing-based journalist. His columns do not represent viewpoints of the Mackinac Center for Public Policy or Michigan Capitol Confidential.

Michigan Capitol Confidential is the news source produced by the Mackinac Center for Public Policy. Michigan Capitol Confidential reports with a free-market news perspective.