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Originally Posted by SuchFriendsAreDangerous
But that is the catch-22, it would be morally wrong not to honor existing contracts, bargains, and negotiations. If people who work for the government have paid into their pension plans and benefits packages under the contracted expectation that the government match them a certain figure, its point blank bad business practice for the government to then renege on the deal.
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YES - it's a good and moral practice to honor existing contracts. However, when the righting is on the wall and revenue steams aren't meeting basic needs, it's morally corrupt to keep spending / giving like everything is okay.
About a decade ago in the city which I reside, City Management was faced with the same situation. As a citizen, it pleased me the Mayor and elected officials responded accordingly.
All City workers received a 3% cut in pay (except for the fire department which has a contract that calls for mandatory raises / caused friction with the police department) .
When a tenured employee retired, the position wasn't filled......other department heads / employees had to pick up the slack.
Pensions and retirement programs were never touched.
Because of the wise decisions that were made and put into practice ten years ago, I'm happy to report our city now has a "rainy day fund" of over a few million dollars and each year the city adds more money to this fund. We are experiencing street and drainage improvements all over the city and most business are thriving in a tough economy.
I realize what happened here may not work in other states. I recently read that in the City of Detroit, over half of the street lights (about thirty-thousand) aren't operational and about half of the buildings downtown are empty.
However, since I've never been to Detroit, I understand things may not be as sad as I've read. Just last week Alan Sparhawk aka LOW tweeted the following:
@lowtheband 19 Jul - DETROIT, you don't look bankrupt to me! Friendly people everywhere, keeping cool...