In my column this weekend, I write about a proposal by the state's Democratic leaders to provide a new state-created mini Social Security system for private workers. It's the new Democratic talking point -- public pensions aren't a problem. The real problem are stingy private pensions. Never mind that public pensions are bankrupting cities. As I wrote:
SB1234 isn't a serious bill. It's meant as rhetorical ammunition to bolster this union-backed meme: "The problem isn't that public sector employees earn too much in retirement. The problem is that the private sector pays employees too little." It would be great to provide better retirement income for private-sector workers. But, unlike the public-employee systems, private employers cannot generally foist their debt on taxpayers. The books have to balance.This is a crazy idea but it offers insight into the thinking of the state's dominant party. As an aside, union backers insist that CalPERS' 7.75 percent predicted rate of return is perfectly conservative. If so, then why are the Democrats offering a program based on about half that rate? Why do they use 3.8 percent when they are buying out localities who want to take their money elsewhere? Why do they need taxpayer backing if that's a conservative estimate?
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