I always loved Colorado...

Here's one more reason why. Taking on outrageous pension liabilities and saying - NO.

Look, both of my parents were teachers. I understand more than most the sacrifices they made from a career perspective. But guys, it's still a pretty good gig - 2-3 months a year off, and pay over the entire year. A rabid union that defends indefensible tenure practices, so once you hit it you're set for life, and reasonably good middle class pay.

You will not get rich going into teaching, but you will have a pretty nice job with a decent salary, great vacation plan, and excellent benefits. That said, go look at the costs of Immediate Annuities that would be needed to generate the same income streams promised these retirees. For a man, you'd need to plunk down $860,000 for that same income stream and 3.5% COLA.

Now, I got some great friends who are teachers - really good with their money and all that, but I can pretty much guarantee that unless they're inheriting it, they ain't saving that much ($860,000) money on their teacher salary, even if their salary over their working career had been $10K a year higher (which is wholly unrealistic) and every dime of that increase had gone into a decent fund earning a nice conservative 3-4% after inflation, they might, just might, get close to that $860,000 figure - much would depend on when they chose to retire.

As the Colorado governor (a Democrat) so eloquently stated:

“The New Deal is demographically obsolete. You can’t fund the dream of the 1960s on the economy of 2010.”

It's great that the government and taxpayers of Colorado yanked their heads out of the sand and said they had to address this now, before they bankrupted the state. Unions will want to sue - let 'em. You can't pay unrealistic obligations on the backs of the few workers who remain. The best of them will vote with their feet, and a shrinking tax base is a surefire way into bankruptcy - and guess what? Once there, a judge just sets aside obligations and current contracts in favor of far more Draconian cuts. It's better for the Unions to be an active part of the solution now, or passive participants in bankruptcy court.

in reference to: Your Money - The Coming Class War Over Public Pensions - NYTimes.com (view on Google Sidewiki)