December 17, 2013
Mayor Wharton Says Spend! Spend! Spend!
In a very interesting article in the Daily News by Bill Dries, the Mayor is quoted from a TV interview in July on the WKNO-TV program “Behind The Headlines” as saying the following.
“ projects like the Mid-South Fairgrounds renovation and the Bass Pro Shops move into The Pyramid are necessary ingredients in an administration he has vowed will not be about austerity measures. It has failed in Europe … this idea that austerity will cure all ills. It has not worked globally. It will not work locally. … Who is focusing on growth? Everything is cut, cut, cut. Anybody can say that. Forrest Gump can say that.”
This sounds like a statement coming from the White House, not City Hall. He may be repeating talking points. However it sounds like someone who has run out of other people’s money and is fishing for more. I hate to sound old fashioned. As someone who has run a business and has had to meet a payroll, spend, spend, spend is not a good long term strategy unless you can show investors from past successes and a well thought out plan, that there will be future revenue, revenue, revenue to cover the debt, debt, debt. But I repeat myself.
Now as to the pension reform mentioned in the CA, I like the framework of the plan but it does not go far enough. Going to a defined contribution pension plan for future employees and non vested present employees is fair and puts them on the same risk level as the private sector taxpayers. The “for profit” private enterprise market generally has been good to investors for the last 25 years with the exception of 2008. Why should public sector employees be insulated from the risk that private sector taxpayers take?
However we also need to consider that it may be necessary to look at current vested employees and consider freezing their earned pension credits at their present levels and also put them on the same future defined contribution plan for their future years before retirement. However he retired pensioners should be protected short of city bankruptcy like Detroit. These considerations and plans are necessary to avoid another Detroit in the future.