Quote:
Originally Posted by Dottore
Great post.
These are precisely the sorts of difficulties you get into when you start to re-negotiate contractual entitlements. What about the guy who inherits big, or wins a lottery? Do you cut his entitlement because he doesn't need it anymore?
Once you go down this road you will get into endless absurd situations where everyone has to fear that someone will make a grab for their fixed income.
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I understand the point you and Jim are making and I agree,
in principle.
The issue in California is complex. A desperate governor facing recall attempted to secure critically needed support by offering California firefighters a 30% pay raise and a 90% retirement package with medical benefits. Of course the financial burden falls to the cities and counties where the firefighters work. Now several cities are considering bankruptcy because they cannot meet the enormous obligations imposed by the new retirement plan. Keep in mind, the new retirement plan only went into effect in 2006. In terms of financial impact, we are truly looking at the "tip of the iceberg".
So what would you propose? Do we honor the contract and let a few cities go bankrupt leaving firefighters with no retirement at all? Do we renegotiate the retirement package in a way to restore solvency to the cities? Do we increase taxes in California yet again to cover the shortfall?