De Leon clueless on why people can’t retire

Kevin De Leon themeMarch 14, 2013

By John Seiler

A story in Roll Call magazine, which reports on the U.S. Congress, inadvertently explains why Democrats don’t get what’s going on in California. It reports:

“Kevin de León, a California state senator, likes to tell the story of a 74-year-old San Diego woman who takes two buses to the wealthy enclave of Coronado to clean houses several days a week. Despite a lifetime of hard work, her Social Security check does not cover her living expenses, he says, forcing her to put off retirement.

“That woman, his aunt, motivated de León to push for an automatic retirement program for California workers whose employers do not offer 401(k)s or other retirement plans.

“’She’s worked all her life,’ he said. ‘She hasn’t asked the state or the federal government for a single penny in terms of any type of assistance, and she’s not had the opportunity to build up any assets over the course of time.’”

What he doesn’t point out is that it’s the state government itself that has made it impossible for his aunt to retire. And the culprits include both his fellow Democrats and the now-superminority Republicans.

The first problem faced by all Californians except the very rich is the high cost of housing. The main culprit is extremist environmental laws and regulations, in particular those imposed by the California Coastal Commission. The commission was foisted on the state by clueless voters in 1972. Most of those voters now are dead lo these 41 years later. Yet today we’re forced to live under its continuing repression.

The commission’s meddling severely restricts building along the coast, which greatly increases prices at least 40 miles inland, including all of San Diego. It’s Econ. 101: Decrease supply and the price goes up.

Other regulations also restrict the supply of housing.

Beside housing, massive high taxes and regulations on every aspect of California life make jobs creation difficult. Again, it’s supply and demand. Taxes and regulations kill jobs, which increases the number of those unemployed. More people looking for work drives down wages. So de Leon’s aunt is paid less then she otherwise might be, meaning she has less savings.

De Leon’s response to the high cost of government interference in our lives? Even more government! Roll Call:

“After years of trying, de León, a Democrat representing the Los Angeles area, was able to muscle a bill through the Democratic-run Legislature creating a statewide dedicated retirement account for private-sector workers. Democratic Gov. Jerry Brown signed the bill into law on Oct. 1.

“De León’s measure, the first of its kind in the country, has attracted attention from lawmakers in other states and in Congress and has turned the first-term senator into a rising star. Retirement savings have taken a hit in the recession, just as baby boomers are getting ready to leave the workforce.”

Roll Call doesn’t even report on how California has done managing its existing retirement programs. The reality: state pension funds suffer $500 billion in unfunded liabilities.

Putting the California government in charge of private pensions is like putting your retirement savings in the safe keeping of a mafia loan shark.

Actually, the best way for Californians to save for retirement is to move to a state with no state income tax and low housing costs. Then you can save your money for your golden years.

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