Tuesday, April 29, 2014

The Money Tree Myth


"What! There is no money tree? How in the world will we be able to pay for all these things??"

Some wise soul penned an editorial yesterday refuting the ga-ga article in last week's paper on how "lucky" Minneapolis and New York were to have two very Progressive Mayors. Really? This article went on to say that with Progressive policies, both cities could end up looking like the poster child of all Progressive cities - Detroit.

What I will say next might surprise some. I think many Progressives are well intentioned. Very misguided, but well intentioned. Other Progressives, not so much. Many Progressives are products of their education, or lack thereof. They simply don't understand where money comes from (no - it is not the government). In simplistic terms, they believe in money trees. Many have not worked in the private sector, and would not recognize the difference between a P+L and a S+L.

A term which should make all squirm is "underfunded pensions". To a Progressive, there is no such thing. If generous union benefits start to look a bit lean, no big thing - just tax some more. In other words, go out into the back yard and pick some more money off the money tree.

Last October the left leaning Huffington Post had a very good article on the unfunded or under funded pensions in the major United States cities. It is a staggering amount. Although the article did not have numbers for 2013, they did for 2010. In total, the number for all cities is $574B! To reduce the possibility of a Detroit like bankruptcy, some cites are doing a unilateral restructuring on union pensions - cutting benefits and turning them into a 401(k) type fund. However, for many cities it might be too late. The time bomb is already ticking.

We are a country awash in debt. As scary as the number of $574B is, it is only chump change. As of today, our national debt is $17,552T and growing like a weed. However, that number also is chump change. The total of liabilities for Social Security, Prescription Drug and Medicare is a mind blowing $129T! We better all be millionaires as the total per person of that liability is $1.1M.

So Progressive leaders can smile, laugh, and talk of sunshine and lolly-pops. Reality paints a much different picture. We are spending ourselves past bankruptcy and into oblivion. When the rain starts, it will indeed be a hard rain falling. There will be gnashing of teeth and worse. Those who now benefit from the phony baloney stock market will soon be as poor as the rest of us.

Our historic debt should be the story of the century, but it is not. Our press, our Progressive leaders continue to hold hands in the back yard, still searching for that elusive money tree.

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