Letter to the Editor from Greg Gerritt: The RI Pension Mess

A response to: http://prosperityforri.com/the-ri-pension-mess-round-4/

To my great surprise this morning in the newspaper there was an op-ed from the wackos at the RI Center for Freedom and Prosperity that I mostly agreed with.  It happens to be an issue that I have written about previously and have talked to the General Treasurer’s office  about as well.  What the author pointed out was that the return on the investments for the RI state pension fund  in the last year was about 0.88% and that the expected return of 7.65% is totally unrealistic, and has been unrealistic for years.

The author provides much data to corroborate his point, and I totally agree that the pension crisis is far from over because returns on the investments have not matched what the state predicts for years.

The wackos of course do not offer any explanation of why returns are so low, and my guess is that they think if we just let the dogs of capitalism loose that the returns would be better, but all they do is point out that the taxpayers are on the hook for the difference.

It is my opinion that the pension fund investments will NEVER again reach 7.65% because the economy will never work that way again.  We have reached the end of economic growth and therefore a return of 0.88% is about what will be generated.  If you look  at what are the conditions necessary for rapid economic growth, and therefore high rates of returns on investments, the US meets none of those criteria.  And never will again as the ecosystems collapse due to over exploitation.

The right wing wackos say we can never find the money to make up for the slow investments, so I am guessing that they would like to cut pensions for the working people.  But that is just stupid and would trash the RI economy even worse than their policies usually do.

What we find is that the rich are still getting VERY comfortable retirements, and are quite happy to keep stealing from the community to pay for it.  What Rhode Island actually needs to do to make up for the shortfalls in the pension funds is raise taxes on the rich, raise taxes on corporations, and quite giving tax breaks to the rich for real estate speculation.  That would allow us to fund the pensions for the workers who deserve them, and restore a bit of equity and justice into the economy, which will  help it to work better.

Finally we need to be very clear that economic growth has gone away, and is not coming back.  We need to figure out how to have more prosperous communities in a world of shrinking economies.  Unfortunately the General Treasurer, the Governor, and the leaders of the legislators are all wearing blinders and are unwilling to admit the looting by the rich, when combined with ecological collapse, is harming our communities.

The intersection of ecological collapse and looting by the rich, fueled by the desire for ever faster growth is a killer.  The best thing RI could do is ban all fossil fuel use and take serious steps to increase by 2000% the amount of food grown in RI.  Nothing less will actually help the RI economy or prepare us for the storms ahead.