Another reason to watch Seinfeld reruns. Economics lessons taken directly from the "show about nothing."

The Soup Nazi (The Economics of Seinfeld)
The Soup Nazi makes delicious soup—so good there's always a line outside his shop. He refuses service to Elaine, and by a stroke of luck she comes across his stash of soup recipes. She visits his shop and informs him that his soup monopoly is broken, while waving his recipes in his face. Also in thi…
Wed, 03 Dec 2014 16:15:10 +0000
Happy Thanksgiving and a hearty huzzah for property rights.

The Pilgrims and Property Rights: How our ancestors got fat & happy

The Pilgrims founded their colony at Plymouth Plantation in December 1620 and promptly started dying off in droves. As the colony's early governor, William B...
Tue, 25 Nov 2014 16:14:47 +0000
"Swanson regards the government for which he works as 'a greedy piglet that suckles on a taxpayer’s teat until they have sore, chapped nipples...'"

Charles C. W. Cooke - The Hayekian Hoosier
Editor’s Note: This article originally appeared in the November 3, 2014, issue of National Review. However talented he may be, no writer will ever be safe from his audience, for it is they who will eventually pronounce upon his meaning. Ray Bradbury once stormed indignantly out of a class at UCLA a…
Tue, 18 Nov 2014 15:32:43 +0000
Last Refreshed 12/18/2014 7:01:26 AM
Significant reform needed in KPERS

The newly formed Kansas Public Employees Retirement System Study Commission faces a daunting task. The most recent valuation report reveals unfunded liabilities have increased to $8.3 billion and the funding ratio fell to 62 percent, placing KPERS amongst the country’s most underfunded plans.

Still, the liability is actually much worse than reported, perhaps as high as $15 billion. KPERS assumes an 8 percent annual return on investments and acknowledges that may be optimistic. Financial experts argue government pension plans should estimate liabilities like private sector plans and use a rate that reflects the market risk inherent in those liabilities.

A recent study by finance professors from the University of Chicago and Northwestern University estimates state pension liabilities using real Treasury yields to calculate the funding required to pay off liabilities over 30 years. Their study puts the price of not reforming KPERS at either an 11.7 percent tax increase, an 11.7 percent funding reduction for schools, social services and other government functions or some combination of the two.

Clearly, major reform is needed.

Many options exist to reduce benefits and still provide a more lucrative retirement plan than most taxpayers receive. The current defined benefit plan allows someone with 35 years’ service and final average salary of $50,000 to retire with about the same take-home pay, including Social Security. A defined contribution 401(k) plan should be created for new hires. Benefits for those still working can be modified, the early retirement age can be increased and other oddities can be eliminated, such as “double-dipping,” buying discounted service credits and the special treatment afforded legislators.

Kansas is already suffering economic stagnation and job loss from a growing tax burden. Indeed, Kansas is the only state whose 2011 average annual private sector employment level is lower than 2010. State and local taxes increased at nearly twice the level of inflation over the past 10 years, and that doesn’t include the full impact of the sales tax increase. There simply is no room for another straw on the camel’s back.

Another year like 2008 would create a high probability that underfunded pension plans such as KPERS will eventually default on their obligations.

Political pressure to protect these lucrative, unsustainable benefits will be intense, but the choice is crystal clear — enact major pension reform or pick between double-digit funding cuts or job-killing tax increases.

With all of this in mind, we hope the KPERS Study Commission chooses wisely.

View full article at The Topeka Capital Journal. Click here
View full article at The Hays Daily News. Click here