I’ve been having a Twitter discussion with a just-retired Providence teacher who’s known around the local Internet as “Snow.”  She isn’t happy with her union leaders because, as she argues, she now would have been better off putting those pension investments in the stock market for 30 years.

A quick check shows that, from 1982 to 2013, the compound annual growth rate (CAGR) of the total market was 10.5%.  That is, indeed, higher than the 7.5-8.0% (or whatever it might have been before) that the state government has been assuming for its bookkeeping.

In both her calculations of the stock market and her estimates of what she’ll have throughout her retirement, however, she completely ignores risk.

For the long-term investment of a pension, it would have been reckless of Snow to put 100% of her investments into stocks.  That’s why the pension fund mixes stocks with safer investments.

Who could have guessed, back in 1982, when it was considered a dire predicament that the national debt had crossed the one-trillion-dollar mark, that the federal government would continue inflating the market with so much debt?  We’re now over $17 trillion, adding about one more per year, every year.

On the other end, who really expects this to continue for the twenty years or more of Snow’s retirement?  In the shadow of that ominous thought, a guarantee of six times what she put in looks like an enviable deal.

But let’s turn to unemployment.  Supporters of a government-driven economy have been brushing off concerns about the unemployment and labor participation rates as simply a consequence of an aging population.  In that case, was it wise to base so much of our economy on national debt, and is it wise to drown the chickens in even more, as they come home?

The bottom line is that Snow’s generation built its sunny expectations on the backs of mine and those after, with the public sector layering on another thick layer of graft.  It can’t last.

The promises that her union extracted were unreasonable; the guarantee is fanciful; and I fear history will to prove the demands to be the height of selfishness, in retrospect.