"Consider the difference in accountability between individuals unable to pay their debts and corporations that default on their pension plans.
Under the new bankruptcy law enacted last year by a Congress eager to reward their campaign contributors in the credit industry, the vast majority of common folk saddled by unmanageable debt--usually because of severe misfortune, such as medical emergencies, job loss, or divorce - will be deemed to be in possession of "excess income" and will no longer be permitted to wipe the slate clean. Instead, they'll be put on an accelerated payment schedule for a 3-5 year period at a much higher rate of interest and forced to pay for "fiscal management" classes in addition to lawyers' fees.
How poor will you have to be to avoid this fate? Let's put it this way. A couple each earning measly minimum wage for a total of $21,840 per year with no dependents? According to the new "means test," that couple is $9,720 over the so-called poverty threshold, or stated similarly, earning 80.2% "excess" annual income. Those sluggards will just have to pay up.
But it's an entirely different story when corporations fail to meet their financial obligations to their workers--which is increasingly the case. As Roger Lowenstein notes in a recent article on the end of pensions, "Corporations were happy to offer rich retirement plans to their workers as long as accounting tricks and federal insurance made it easy to delay the day of reckoning."
And why not? When the day of reckoning comes, the firm won't sell off its assets to pay for the failed plan or garnish the wages of the CEO (who, on average, earned $9.84 million, or 358 times the average worker's pay last year). Debt from the failed plan becomes the responsibility of the government's pension insurer, the Pension Benefit Guaranty Corporation (PBGC)--currently in the red to the tune of $23 billion (and estimated to bloom to $200 billion within two decades). Which means that average taxpayers like you and me will pay the corporation's debts while it goes merrily on its way.
Because that's what "personal responsibility" really means to this administration. When it comes to covering bad debt from corporations that underestimate how much they need to put away to keep their commitments, it's on us. Ditto for when businesses game the system by exploiting lax rules that allow them to get away with inadequately funding their pension plans. Or promise the world to their workers, knowing that there's a safety net if they ever get in too deep. And when it comes to shouldering debt from bad individual luck, that's on us too."http://rawstory.com/news/2005/The_new_Gilded_Age_0104.html
"I see in the near future a crisis approaching that unnerves me and causes me to tremble for the safety of my country. As a result of the war, corporations have been enthroned and an era of corruption in high places will follow, and the money power of the country will endeavor to prolong its reign by working upon the prejudices of the people until all wealth is aggregated in a few hands and the Republic is destroyed."- Abraham Lincoln