In the past two days we’ve seen a federal judge rule that Detroit can go bankrupt, putting its workers’ pensions in jeopardy, and we have seen Illinois’ Legislature vote for substantial cuts in its retirees’ pensions. Undoubtedly these two actions are just the tip of the iceberg. We have opened up a new sport for America’s elite: pension theft.

The specifics of the situations are very different, but the outcome is the same. Public employees who spent decades working for the government are not going to get the pensions that were part of their pay package. In both cases we have governments claiming poverty, and therefore the workers are just out of luck.

Before getting to the specifics of these cases, it is worth dealing with a couple of points. First, there has been a huge media campaign to trumpet the generosity of public-sector pensions. The Washington Post once ran a major front-page article on public pensions in which its poster child was a former official in a small California city who was getting a pension of more than $500,000 a year.

Of course this sounds horrible, and it is. The official had been the city manager and had assigned himself several other […]