STUMP » Articles » Public Pensions Watch: New Jersey Pensions' Appeal Getting More Selective.... » 17 July 2014, 07:05

Where Stu & MP spout off about everything.

Public Pensions Watch: New Jersey Pensions' Appeal Getting More Selective....  


17 July 2014, 07:05

….I mean, less likely to pay for their pension promises.

This is inspired by some political persiflage from Gov. Christie, as noted by John Bury

The key excerpt form that interview:


INTERVIEWER: the fact that the state is not going to make the contribution to the pension system, doesn’t that suggest that the “achievement” that you’ve been hailing as a “major” step forward has actually been unraveled and is not an achievement because you don’t have a funded pension [something]

CHRISTIE: No, it doesn’t mean that at all. First of all, it’s not about not making a pension payment, what I’m doing is making the pension payment that we can afford to make and the pension payment that takes care of all of the current employees
Which reminds me of this exchange from the movie Spinal Tap:

Marty: The last time Tap toured America, they where, uh, booked into 10,000 seat arenas, and 15,000 seat venues, and it seems that now, on the current tour they’re being booked into 1,200 seat arenas, 1,500 seat arenas, and uh I was just wondering, does this mean uh…the popularity of the group is waning?
Ian: Oh, no, no, no, no, no, no…no, no, not at all. I, I, I just think that the.. uh.. their appeal is becoming more selective.

The New Jersey pension system is not being gutted. It is being strengthened since after that $1,000 monthly check gets cut to $100 there will be a much better chance that those $100 checks will keep coming based on what the state can afford to pay.

Here’s the deal: for the longest time, politicians have been cheating the pensions from adequate contributions, because they’d rather pay for stuff right now as opposed to make it more likely that pensions will actually get paid thirty years from now. Unions have often gone along with this as “pay for stuff right now” meant “more money in union members’ pockets right now” for the longest time.

Politicians and unions were able to play this game partly because people didn’t understand the meaning of the unfunded liability.

They’ve been saying stuff like “Oh, it’s 80% funded, which is good enough”…. WRONG

“Oh, it’s only 40% funded? Well, that would be a problem if we had to lose down the pension and pay everybody right now”….. ALSO WRONG, but I will explain later. Though Bury has also found some cases where they wouldn’t be able to pay for current retirees (UPDATE: Bury’s post on NJ TPAF, which has <50% assets to cover current retirees), forget about additional promises to those still working.

In all of these cases, the future was going to be a magical place where money appeared from the air to pay for the promises made decades ago. Because the money just had to be there. It was promised.

Remember I’ll gladly pay you Tuesday for a hamburger today? Everybody knew that Wimpy would never pay, even though the promised payment was less than a week away.

People need to understand that the “I’ll gladly pay you in 20 years for a skipped pension payment today” is about as sincere.

In the mean time, this is what Christie thought was a good idea:

UPDATED | After abruptly taking down a spoof video designed to pitch pension reform in New Jersey Tuesday night, Gov. Chris Christie’s staff put it back online Wednesday – with one notable absence.

No longer did The Rock, or Dwayne Johnson, appear in the film or in the credits.

The governor’s staff indicated that The Rock didn’t want to be part of the film, meaning apparently it wasn’t cleared with Mr. Johnson’s staff before going online.

Mr. Johnson’s staff didn’t answer questions about the matter.

Aides to Gov. Chris Christie released the short film clip earlier Tuesday – ostensibly a trailer for a non-existent film called “No Pain. No Gain” — that featured a flying chopper, apocalyptic drumbeats, a steep roller coaster drop, a roaring fire and a hero amid the flames, a shot of the Statue of Liberty and even a zooming NJ Transit train.

Mr. Christie plans to use the clip this summer as the governor travels the state’s shoreline to push changes to the pension system. But the clip was taken down from YouTube Tuesday evening. Spokespeople for Mr. Christie hadn’t responded to requests for comment on the change.

Here is the “movie poster”:

This isn’t funny at all.

And Christie’s word games on the pension contribution are also not funny.

A straightforward answer would be: “Well, we can’t afford to pay for the pension promises we made and pay for stuff we’d like to have right now. People are not going to get what they were fully promised, even after my supposed reforms.”

That sort of answer doesn’t get you in the White House, but this clownishness doesn’t seem likely to work, either.

If Christie thinks this is the sort of thing Tea Partiers like, I will say this one is not at all pleased.

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