In Aesop’s fable about the council of mice, a colony of murines gets together to figure out what to do about the household cat, which is obviously an impediment to their comfort and happiness. A young mouse suggests that they place a bell around the feline’s neck, and then they will always have warning as it approaches. The council agrees that it is a brilliant idea until an old mouse hobbles forward and asks who is going to bell the cat.
We can safely assume that Aesop did not have public-sector pensions in mind when he wrote his fable some two-and-a-half millennia ago, but the moral of the tale clearly applies to the situation that George Will describes in Illinois and across the country:
Illinois is a leading indicator of increasing national childishness — an unwillingness to will the means for the ends that it wills. Nationally, state and local governments’ pensions have somewhere between $1 trillion and $4 trillion in unfunded pension liabilities, depending on, among other things, assumptions about returns on pension funds’ investments. The Wall Street Journal reports that in 2001, the 20-year median return was 12.3 percent, and every percentage-point decline in returns increases liabilities by 12 percent. Last year, the largest fund, California Public Employees’ Retirement System, which assumes 7.5 percent returns, instead gained 0.6 percent. This, in the sixth year of the recovery from the 2008–09 crisis, was the worst performance since then — and another recession will surely happen.
Nationally, neither party is eager to talk about the rickety structure of the entitlement state, although the Democratic platform promises to make matters worse. Although scheduled Social Security benefits vastly exceed the value of worker and employer contributions plus interest, the platform, a case study in reactionary liberalism, opposes even raising the retirement age. This, even though benefits are available at 62, three years younger than when the system was created in 1935, when life expectancy at 65 was 12.5 years. Today, it is 19.3 years for men and 21.6 for women. If in 1935 Congress had indexed the age of Social Security eligibility to life expectancy, the age today would be 72.
The council of big-government mice has concluded that the brilliant solution for maintaining the support of powerful labor unions and for gathering the votes of the older citizens who are most inclined to head to the polls and the poor who not only may be driven to the polls, but also make for compelling guilt-trip propaganda, is simply to proclaim payments to them. So far, they’ve gotten away with pretending that these unsustainable systems will continue to work indefinitely, but they do not wish to acknowledge fiscal reality, much less bell the American people with more taxes.