The Pensions of Public Employees vs. The Taxed Few
(also known as ‘politicians over-promising benefits to public employees and ignoring fiscal realities’)
Bills come due, the politicians who cashed on the future’s solvency, will be out of office, and will themselves be gorging at that same public-pension retiree trough.
Not every public employee is receiving gold-plated pensions and benefits, but that doesn’t negate the reality that nationally, public pensions are increasing faster than government revenues and the returns earned by the pension programs.
Like virtually all wars, there are asymmetries between the two combatants: in this war between public pensioners and the taxed few
The pensioners can’t switch pension programs
The taxed few can move to lower-tax states.
The promises made by the eager to be (re) electeds cannot possibly be kept, despite constant assurances to the contrary, and those expecting services and taxes to remain untouched will be shocked by the massive cuts in services and the equally massive tax increases that will be imposed in a misguided effort to “save” politically powerful constituencies and fiefdoms.
So begins the migration of the Taxed Few
From sclerotic, corrupt, overpriced one-party-dictatorship states whose hubris-soaked political class is convinced the insane housing prices, tech unicorns, abundant services, and a high-brow culture ruled by an artsy elite are irresistible to everyone
To locales that are innovative, low-cost, responsive to the Taxed Few class, welcoming to new small businesses, employers and talent, unbeholden to a politically correct dictatorship and conservatively managed
Not everyone can migrate. Many people find it essentially impossible to move due to family roots and obligations, kids in school, and numerous other compelling reasons.
The Taxed Few are paying the most taxes, they can live pretty much anywhere they please. They don’t need to stay in NYC, Boston, L.A., San Francisco or Chicago.
This is the model for this newly classified refugees: people who are moving to homesteads or small towns with the networks and skills needed to earn a part-time living in the digital economy. In a lower cost area, they only need to earn a third or even a fourth of their former income to live a much more fulfilling and rewarding life.
Not that hubris-soaked politicos and elites have noticed, but the Taxed Few are getting fed up: their local schools have been stripped of enrichment programs, the cash-strapped local governments are demanding taxpayers pass $100 million bonds to fill potholes and repair schools’ leaking roofs, parking tickets now cost more than a restaurant meal for the entire family, and the increases in fees and taxes are coming fast and furious.
There is a feedback loop to raising taxes to pay for skyrocketing public pension obligations: the higher taxes rise, the more The Taxed Few will migrate away from high-tax states and cities. As those paying the majority of the taxes leave, the high-tax states and municipalities have no choice but to raise taxes even more aggressively, which only accelerates the migration of high-income, entrepreneurial Taxed Few that are the engines of growth.
The migration is only beginning, but that’s only half the story: those who can’t leave for whatever reason can opt out: close their businesses, quit their high-stress, high-paying job, move back to the family home, retire and start living as close to the ground as possible.
Those who opt out are in effect moving from those contributing the most to those contributing the least.
Elites can no longer sell that fantasy that NYC, Boston, LA, San Francisco, Chicago, etc., are irresistible, they’re not. They’re great for those feeding at the trough but not so great for those filling the trough.
p.s There’s gonna be a lot of rioting and burning up shit