The Illinois pension system is again in the news with a shocking revelation. Pension costs next year will be twice as high as originally projected. I am shocked. SHOCKED at such a thing.
Quinn, our current governor, has said that the state will make good on pension obligations. How he plans to do that was not forthcoming, however, leaving us to wonder if he may be guilty of misplaced confidence. There goes the additional money we gave the state through a tax increase recently. Whoops. How did that happen?
There are fundamentally two ways to look at economic issues like this. The first is the Barrel of Apples model. Under its assumptions, there is one big container of apples that belongs to “everybody,” into which people reach to get theirs. The winners are those who can elbow their way in and grab the most. When the apples are gone, they are gone.
The other is the Tree of Plenty model. Under its assumptions, apples grow, but the tree is owned by someone. Some people offer to water the roots, some people trim the branches, and some people keep away the bugs and birds. They get apples according to their contribution.
Pension systems are more like a barrel than a tree. People wading through the crush of people to get within reach know that theoretically there is a tree somewhere, they just don’t think about it much. The point is to grab the most and devil take the rest. Since the state manages the barrel in the present case, there is no reason to tend the tree, especially since the state assures everyone that it will all be OK–somehow.
Our orchard is dying, and the state hopes no one ventures out there to notice. Every day, the trees are picked clean and little effort is put into making them healthy and vibrant. Soon, they will all be gone, the barrel will be empty, and people who believed the state would keep the barrel full will go hungry.
One group of people will have full bellies, though–the liars who set up this scheme in the first place. You can bet that they will have squirreled away enough for themselves without every having planted a seed or squashing a bug. And they won’t feed a soul save themselves.