We would probably all be mad if we were as confused as Mr. Zakaria. Fortunately, the problem is with his arithmetic, not with the public pensions.

Zakaria seems to have convinced himself that public pension obligations are going to turn state and local governments into future Greeces, but that is not what the numbers show. His column contains one inaccuracy after another.

For example, he tells readers:

"The numbers are staggering. In California, total pension liabilities--the money the state is legally required to pay its public-sector retirees--are 30 times its annual budget deficit. Annual pension costs rose by 2,000% from 1999 to 2009. In Illinois, they are already 15% of general revenue and growing. Ohio's pension liabilities are now 35% of the state's entire GDP."

If we go to the Public Plans database of Boston College's Retirement Center, we find a very different story. The database shows the liabilities of California's two make plans to be $322.2 billion and $196.3 billion for a total of $518.5 billion. If we look at Governor Brown's proposed budget for the coming fiscal year it shows revenue and transfers of $95.7 billion. That means the ratio of the funds' liabilities to revenues is less than 6 to 1, not Zakaria's 30 to 1. [RS corrects me on this point. Zakaria made the comparison to the budget deficit, not the budget. This deficit was originally projected at $16 billion, of course as the state gets the deficit down then Zakaria's ratio will get larger. The point is not clear, but Zakaria is correct.] And, the database shows that the funds are together more than 75 percent funded. (This is somewhat below the 80 percent level that actuaries usually consider acceptable.)

The 2000 percent rise in pension costs from 1999 to 2009 was due to the fact that the pensions were viewed as over-funded in the stock bubble days, which meant that the state had to pay in very little to maintain proper funding. Did Zakaria somehow miss the stock bubble.

Eileen AppelbaumRoosevelt Institute’s Rediscovering Government Initiative, June 14, 2012

June 14, 2012

A piece yesterday on the Christian Science Monitor's website, written by investigative journalist Kathie Klarreich, discusses the increasing unpopularity of UN troops in Haiti in the wake of multiple sexual abuse incidents and the introduction of cholera in late 2010.  As the article explains, the negative feelings that these scandals have stirred up among Haitians are compounded by the general lack of accountability of foreign soldiers and police personnel that are part of the UN Stabilization Mission for Haiti, or MINUSTAH.

The Monitor highlights two recent sexual abuse cases involving MINUSTAH personnel, both of which we’ve documented on the Haiti Relief and Reconstruction Watch blog: the rape of an 18 year-old boy by Uruguayan soldiers in Port Salud last year and the rape of a fourteen year-old boy by Pakistani police officers.  In both these cases, after the scandals became public, the alleged rapists have faced judicial pursuits in their countries of origin, though the Pakistani officers only received a one-year sentence, and the trial of the Uruguayan soldiers has moved forward at a snail’s pace.

But there’s no indication that other abuse incidents involving MINUSTAH have resulted in judicial pursuits of any kind.  The Monitor mentions the case of “more than 100 Sri Lankan troops expelled in 2007 on suspicion of sexual exploitation of Haitian women and girls.” But, writes Klarreich:

“no information about what happened to those Sri Lankan peacekeepers was ever made public by either the UN or Sri Lanka.  Member states are not required to divulge the outcome of their internal inquiries.”

In a report that focuses on the case of the Port Salut rape case, Haiti’s National Human Rights Defense Network, lists a number of other cases of human rights abuses allegedly committed by MINUSTAH agents since 2005 that – as far as we know – haven’t been properly investigated or prosecuted.

June 14, 2012 (Prices Byte)

Mark WeisbrotAl Jazeera English, June 14, 2012

The most striking development in the United States over the last three decades is the massive upward redistribution of income. So, what do we hear about when we go to the Washington Post oped pages? Naturally, we get columns telling us that old people are going to condemn the country's youth to poverty.

The effort to divert class anger into generational resentment is a huge industry in Washington. Just by himself, Wall Street investment banker Peter Peterson has invested $1 billion in this drive and there are many other wealthy people who also consider it a good use of their funds. 

This is the context for Matt Miller's column today in which he tells us "young Americans get the shaft." That is of course true, but it takes some really bad logic and/or arithmetic to think that the reason is the $1,100 monthly Social Security checks received by their parents or grandparents.

In fact, if Miller had access to data, like Survey of Consumer Finance released by the Fed this week, he would know that most seniors have little other than their Social Security to live on. The cohorts that are now on the edge of retirement have seen defined benefit pensions largely disappear. They saw weak wage growth during their lifetime and therefore had little to money save.

Insofar as they were able to put money aside, they lost much of their savings when an over-valued stock market corrected to more normal levels and the housing bubble burst. Most people would probably put more blame on the Wall Street crew who managed to get incredibly wealthy through this whole process (e.g. Robert Rubin at Citigroup or Richard Fuld at Lehman), but Miller wants us to focus our wrath on seniors getting their Social Security checks.

Dean Baker
Al Jazeera English, June 13, 2012

Dean Baker
CNN, June 13, 2012

June 2012