A looming threat to Kentucky's economy
The purpose of government is to secure liberty for citizens. The purpose of state workers is to carry out that work. A strong economy is a key component of a free society.
So, why are entitlement programs for state workers actually threatening Kentucky's economy? Jagadeesh Gokhale makes the case:
The only policy with fewer negative macroeconomic implications would be to cut scheduled entitlement benefits with a long lead time, perhaps by increasing the age at which full retirement benefits become payable. Such a policy would induce people to revise their expected retirement dates forward in time, generate additional output, and improve entitlement programs' finances. However, retiree lobbies, Baby Boomers and minorities would fiercely resist such a policy, for they stand to lose the most from it.
The old political practice of promising generous retirement benefits with no regard to their future fiscal implications, and without forward-looking accounting or budget controls, was (only) possible when the Baby Boomers were working and revenues were booming. Now the costs of these practices will have to be paid through policy reform, but no one wants to take the lead in proposing early, cost-saving solutions.
Basically, it won't be pretty to fix post-retirement benefits problems. But it has to be done for the sake of Kentucky's future.
