Public funds’ assets dropped $370 billion in 2000 and 2001 because of investment losses, according to Spectrem Group, a pension consultant based in Chicago. The total value of state and local pension funds at the end of 2001 was $2.3 trillion, which is expected to cover about 15 million public school teachers, garbage collectors, and other municipal workers. Last year the public pension funds averaged a loss of 4 percent.

By law, monthly benefit payments to retired public workers are supposed to be guaranteed, so local governments argue that in order to make up the shortfall caused by the declining stock value of these funds, they must cut spending on social programs and/or raise taxes.

In this way capitalist politicians seek to pit workers who are currently employed against retirees. In New York City, for example, billionaire mayor Michael Bloomberg is demanding massive concessions from the unions in pensions and other benefits, cuts in funds for education, as well as reduction in care for the elderly.

According to Bloomberg News, the New York City government estimates it needs to contribute $1.77 billion, almost $1 billion more than two years ago, for its five employee pension funds in the fiscal year that begins July 1.

The states combined have a $27 billion cumulative budget gap for this fiscal year, according to the National Conference of State Legislatures. But you won’t hear proposals from any capitalist politicians to halt or reduce the interest payments to wealthy bondholders and other coupon clippers to cover this gap, just more demands for "sacrifice" by working people. New York State and City, for example, each spend about $4 billion a year on debt payments.  
 
 
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