Moral Hazards, everywhere you look. Arnold Kling has been all over that terrible idea, the proposed auto bailout.
A big reason that the auto industry is in trouble financially is that many of its current and past workers have retirement benefits (including medical care) that are defined benefits. That is, the benefits are promised regardless of whether enough money was contributed to provide for them.
This refers to companies with defined-benefit pension plans, which are plans that promise to pay specific benefits, even if the funds in the plans lose money. The companies think that it is onerous that they should be expected to actually have to take steps to keep their promises. Instead, they want to go on as if everything is fine, and leave somebody else to pick up the tab if it isn't.And who are the tab-picker-uppers? Naturally, the taxpayers, under the Pension Benefit Guarantee system.
Everyone who promises defined benefits thinks that somebody else needs to help them keep their promises. That somebody else is you and me.
First GM, and then PERA, which is less arguable, because those pushing this little piece of socialism will then claim that you and I made the promises to the government employees.
In fact, it's almost as though they're pushing to help GM in order to clear the way for a PERA bailout.