(LA Progressive) — Here’s an economic free-association test. Read the following sentence:
The Federal government should bail out Detroit city worker’s pensions so that retirees can be paid in full.
Some people will approve of the idea. But others will be shocked or angry. They’ll conjure up images of prosperous retirees making a fortune at everyone else’s expense. If you were one of them, you’ve been exposed to some infectious myths being spread in the media and by politicians.
Think again: Does $1,500 a month after hauling garbage cans your whole adult life really sound like a fortune?
Detroit’s pension plans may not need a Federal bailout. The city may have better options, especially if the politically-motivated machinations of its unelected leaders can be set aside. But morally and practically, there’s no reason why a rescue of this kind — or a Federal guarantee behind the city’s pension plan — shouldn’t be on the table. Here’s why.
