The Moral Challenge of America's Pension Crisis
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  • Boritz

    …allow politicians to shirk difficult decisions like raising taxes or cutting services, but they do so by running a risk of steep losses down the line.

    Is this not the way all ‘budgeting’ and funding is done at the national level and is it not the principal reason we are XX trillion in debt? Local politicians are simply emulating the big boys.

  • qet

    History shows that attempting to place obligations to creditors on the same moral plane as obligations to and debts of “the little guy” like retired firemen and schoolteachers is doomed to fail. Since the time of Solon, if not before, cancellation or dishonoring of debt to the detriment of creditors has been considered not only wise and sound policy, but moral. In fact, if you review the Wikipedia page on Solon, you will see his cancellation of the commoners’ debts discussed under the heading “Moral reform” rather than in the immediately preceding “Economic reform.” Really, creditors who continue at this point to buy municipal bonds deserve to be stiffed.

    • gerald

      I don’t recognize the authority of a Wikipedia page to determine the classification of the morality of acts. “History” is written by the winners, so your “history shows” doesn’t say anything about the morality of the actions as much as it is a self-selecting recording by those who got away with it.

      The end effect of “cancellation” and default is the same: people who lent the money won’t get it back, but I don’t think that the label slapped on the act will substantially affect the way those who lost their money behave toward the defaulter going forward. Typically, the way international bankers took care of kings in default was to finance their enemies.

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