On the Third Hand: You Have Mail

On the third hand: Unless some kind of tax-revenue-generating miracle or other miracle occurs that helps fill government coffers and private retiree benefits funds throughout the world in the next few decades, I think a lot of public and private employers are soon going to be shafting longtime employees, either by eliminating benefits or using strategies such as printing increasingly inflated, increasingly worthless money to sharply reduce the value of the benefits paid.

Private life insurance, annuity and long-term care insurance programs will probably do better than government programs and employer self-funded programs, but, in my opinion, they’ll also face challenges from bond defaults and inflation. 

In my opinion, employers were simply too nice, too weak, and too over-optimistic and they agreed to retiree benefits promises that they can’t and won’t keep.

Instead of everyone running around with increasingly smaller fig leaves, pretending our private parts aren’t grotesquely visible, let’s drop the fig leaves; admit just many fine, responsible retirement benefits programs are going to default; get the rating agencies to simmer down and let people think; let the folks who are morally opposed to taxes and social welfare benefits have a refuge where they can try out their ideas in peace; and then be realistic about the resources that the folks who are willing to pay taxes for retirement benefits and the folks who are open to collecting government retirement benefits, when necessary, will actually be able to cobble together to keep retirees fed, sheltered and reasonably comfortable.

The point isn’t whether Social Security or the Postal Service retiree health benefits program pays 100% of the promised benefits; the point is avoid despair and chaos.