We reported yesterday that the TARP and Fannie and Freddie bailouts have resulted in more than $107 BILLION in profits for the U.S. Treasury. In addition to this profit, bailouts have been beneficial in that they preserved companies and jobs, wages and tax revenue, and pensions while protecting investors in bonds and stocks of those companies.
With regard to the preservation of pensions, and specifically DB pension plans, Diane Oakley, former Executive Director for the National Institute on Retirement Security (NIRS), spoke to the importance that benefits received by the participants play in contributing to a healthy economy. According to the NIRS, 40 million Americans were covered by a private (both single and multiemployer) pension plan in 2016, including more than 13.5 million retirees. The 13.5 million beneficiaries received just over $200 billion in benefits equating to just under $15,000 per participant (multiemployer recipients got about $12,000 on average).
With regard to the impact of just the multiemployer payouts on the economy, the NIRS has determined that “246,324, jobs were attributable to direct impacts (direct spending by retirees), 122,978 to indirect impacts (spending by merchants on businesses further up the supply chain), and 173,566 through induced impacts (additional jobs supported when employees whose jobs are tied to direct and indirect spending rounds spend their paychecks). These jobs collectively paid out an estimated $27.9 billion in labor income.”
The NIRS analysis also calculated that the $41.8 billion in benefits received in 2016 stimulated the economy to the tune of $89 billion in economic output. Lastly, the tax revenue produced by this economic activity is roughly $14.7 billion, with $8.4 going to the Federal government.
It is clearly past the time to put ideologies aside and get something implemented before the pension crisis magnifies and a solution becomes impossible. We need to protect our retirees before we not only damage their financial well being but the health of the U.S. economy in the process.
Trump is bailing out farmers to the tune of $28 billion dollars.
How does that compare to the tax dollars that pension participated paid in taxes to their state and federal government. It is not a comparable, because there are many more people that pay payroll taxes than there are farmers. I & my wife were raised on family dairy farms in WI, if we had a bad year(s), we didn’t get a bailout, now days these big corporate farms are getting corporate welfare. Treat all Americans the same. What’s good for farmers should be done for people who pension plan become insolvent because of federal government intervention.