2 Trillion dollaor hole in public pensions - Another pyramid scheme

[Zebo]

Interesting history thanks. One thing to keep in mind is back then
a) civil servants made 50% less than civilian
b) today they make 50% more than equivalent jobs
c) 10% didnt work for government but much less, not sure of number...
d) We no longer have a vibrant production economy with high middle class wages but instead real wages have been frozen since the 80s and can't support a b c

 

[BoberFett]

The idea of pensions is noble, but unsustainable. Especially now that we're all living longer than we did a century ago. You cannot reasonably expect to spend the first 20 years of your life and the final 30 years of your life as a completely unproductive citizen, with only a short stint of working for 30 years.

 

[Zebo]

Well I wouldnt call it a "stint" unless you include countless FD and PD employees with the ole back problem after 5 they worked and should be given something but certainly not 100% for 30+ years

 

[Patranus]

Interesting history thanks. One thing to keep in mind is back then
a) civil servants made 50% less than civilian
b) today they make 50% more than equivalent jobs
c) 10% didnt work for government but much less, not sure of number...
d) We no longer have a vibrant production economy with high middle class wages but instead real wages have been frozen since the 80s and can't support a b c

I think your little list explains itself.

You have more government employees making more money.
To fund those government employees money must be taken out of the private sector.
Money taken out of the private sector depresses private sector wages and jobs.
Depressed private sector moves jobs out of the country to save money.

Government continues to grow and the cycle continues.

 

[Slew Foot]

Hyperinflation will cure that ails America.

 

[Hacp]

Pensions, social security, all other government programs are pyramid schemes. We need to cut the social safety net and let people suffer. Only then can we as a nation prosper. Look at every other rising developing nation. Their poor are ACTUALLY skinny! Only in the US is the poor fatter than the rich.

 

[DucatiMonster696]

QFT. The same generation that arguably did more for the country than any other (baby boomers) could be the generation to dismantle it.

Anyone born from 1947 to 1966 is considered a baby boomer. The previous generation before the baby boomers sacrificed more for this country then the baby boomer generation who walked angrily in their shadows.

 

[DucatiMonster696]

Interesting history thanks. One thing to keep in mind is back then
a) civil servants made 50% less than civilian
b) today they make 50% more than equivalent jobs
c) 10% didnt work for government but much less, not sure of number...
d) We no longer have a vibrant production economy with high middle class wages but instead real wages have been frozen since the 80s and can't support a b c

It used to be that a government job meant life long job security but not high wages. Now it seems with the introduction unions into the government work force these folks want high wages, big pensions, fat benifits and the permanent job security of old.

You can't have your cake and eat it at the same time.

 

[Zebo]

Pensions, social security, all other government programs are pyramid schemes. We need to cut the social safety net and let people suffer. Only then can we as a nation prosper. Look at every other rising developing nation. Their poor are ACTUALLY skinny! Only in the US is the poor fatter than the rich.

I believe in balance.. But way things are going you'll get what you want very soon... Go watch a few hours of LA riots on YouTube to prepare yourself mentally.

 

[blackangst1]

Anyone born from 1947 to 1966 is considered a baby boomer. The previous generation before the baby boomers sacrificed more for this country then the baby boomer generation who walked angrily in their shadows.

I said nothing about sacrifice. Although I agree with you. IMHO it was the baby boomer generation that skyrocketed us into the super power we currently are. Sure, some bad came along with it. But I dont believe any other generation changed the way we live our daily lives as much as they did. Look at all the technology discovered and deployed by them for instance.

 

[Hacp]

I said nothing about sacrifice. Although I agree with you. IMHO it was the baby boomer generation that skyrocketed us into the super power we currently are. Sure, some bad came along with it. But I dont believe any other generation changed the way we live our daily lives as much as they did. Look at all the technology discovered and deployed by them for instance.

No, it was the previous generation that did. Who invented computers? Who invented the Internet? Who got us to the moon? All this was accomplished by hardworking pre-baby boomers.

 

[Zebo]

I have high hopes for x'ers and y'ers. Like the "greatest generation" they will live through a depression and get back to basics. Don't even get me started on boomers I'd offend too many here.

 

[Veramocor]

2-3 trillion just in state and municipal hole.

This article is from Barrons which costs $99 a year to view so I'll be posting it in it's entirety for you.

Translation people want to get paid for their work so let me copyright infringe this for you.

 

[Zebo]

I already paid. Whats your problem? stories are posted here all the time... like everyone in p&n for example

Speaking of paid I wish Anand would bring back paid so these damn ads would go away...

 

[Jhhnn]

Righties are soo simplistic.

The problems with public pensions are the same as with private pensions and the economy in general.

Do you think that the Chinese workers that American capitalists have hired to replace American workers are paying into the company pension plan?

Do you think that those same capitalists are contributing anywhere near what they would to pension plans if they employed American workers?

Do you think that cutting their tax rates profoundly over the last 30 years has done anything other than enrich the recipients of those cuts?

Do you think that the boom/bust cycle of false high valuation of stocks and bonds serve pension goals?

Do you think that growth of government and unfunded mandates to the States aren't done in an effort to disguise the effects of offshoring and income shifting to the very tippy-top of tax filers?

Do you think that states have some choice other than increasing revenues to cover the shortfalls created by such mandates and an actual reduction in the purchasing power of federal funds provided?

Do you think that the growth of federal employment under the GWB regime, greatest since the Great Society years, was some sort of cosmic accident, or was it cover for capitalism's abandonment of American workers?

Do you think it's reasonable to drastically slash rather modest pensions for elderly retired state and federal workers? Do you want Grandma to have to move in with you?

Figure it out, guys and gals. It's entirely reasonable to be upset with the way things are, but don't take it out on the deceived, but rather on the deceivers, the people who brought us deregulated international capitalism in the world economy, trickle down economics, debt rather than assets, and all that goes with it...

You're still being manipulated, and you seem to like the way it feels, too...

 

[Zebo]

+1 Jhhnn there is a lot of truth to that. But none of it addresses the new reality. Quite simply we don't have the money to fulfill these promises.

 

[3chordcharlie]

+1 Jhhnn there is a lot of truth to that. But none of it addresses the new reality. Quite simply we don't have the money to fulfill these promises.

The only solution, really, is to cut benefits, probably on a sliding scale (the younger you are now, the worse the deal will be), increase employee contributions, and legislate the government's hands out of the pensions' pockets.

 

[rchiu]

2-3 trillion just in state and municipal hole.

This article is from Barrons which costs $99 a year to view so I'll be posting it in it's entirety for you. It's a huge elephant in room none is talking about now. Some Cities are paying over 80% out of receipts collected in pensions and boomers have not even hit yet!!!

It is basic math here folks. Any time you create a payment structure where you need continuing growth on the front end to support the back end, it will never work. Most pension funds put aside 5-10% of a workers salary per year for long term pension while promising 75-100% annual wages throughout retirement. It was never a sustainable system. You either needed more and more folks putting the 5-10% in or a magic growth rate on the pension fund.

As I've told my mom who is retired From UC Irvine, Don't count on it.
____________________________________________________________________

I don't think the original intention was to use the front end to support the back end. You are suppose to work for ~30 years and the life expectancy back then was 10~15 years after retirement. Together with the compounding interest and rate of return from the 30 years of 5~10% salary + 5~10% employer contribution, it's suppose to cover the pension without relying on contribution from current employee payments.

The problem is they shouldn't promised on things they cannot control, like the life expectancy. If they don't have the money to cover the increase due to longer life expectancy, they shouldn't have promised that, or they should have something saved up, or insurance to cover those variables.

It's simple bad management decision, that should be reversed and calculated to match the current asset to future liability without asking current employees to pay for those liabilities. Who should cover future liabilities that cannot be covered by current asset? Well, this is not the first time tax payers has to pay for bad government decisions.

 

[Zebo]

If you want to fix it you'd have to ban imports. Yea that's popular.
Tax the rich. Another popular thing. I think not. Least not with political class who are beholden to them.
Cut wages of government employees to private sector. Another popular thing considering dems get about 30% of their money from public employee unions. Not happening.

Bottom line it can't be fixed till we collapse utterly.

 

[Jhhnn]

+1 Jhhnn there is a lot of truth to that. But none of it addresses the new reality. Quite simply we don't have the money to fulfill these promises.

I won't argue that some belt tightening isn't in order. What remains to be seen, however, is if America's wealthiest will accept tightening their own, in the form of higher taxes at the tippy-top, or if their republican friends in congress will succeed in putting the pain off onto the rest of us entirely. Maybe what we really can't afford are the world's lowest tax rates on huge incomes, vast expenditures on coldwar military hardware that has no mission, wars of adventure, and a healthcare system that delivers demonstrably poorer aggregate results at 50% greater cost than any other in the first world... Maybe we can't afford to let the nation's financial elite win the class warfare they've waged for 30 years.

(Que anti-tax raving from rightwing wannabee sycophants of the wealthy.)

 

[glenn1]

I won't argue that some belt tightening isn't in order. What remains to be seen, however, is if America's wealthiest will accept tightening their own, in the form of higher taxes at the tippy-top, or if their republican friends in congress will succeed in putting the pain off onto the rest of us entirely. Maybe what we really can't afford are the world's lowest tax rates on huge incomes, vast expenditures on coldwar military hardware that has no mission, wars of adventure, and a healthcare system that delivers demonstrably poorer aggregate results at 50% greater cost than any other in the first world... Maybe we can't afford to let the nation's financial elite win the class warfare they've waged for 30 years.

(Que anti-tax raving from rightwing wannabee sycophants of the wealthy.)

Do you honestly think that the majority will go along with raising tax rates on the wealthy in order to maintain the pensions of retired government employees? If anything, people think less of government bureaucrats than they do the rich.

 

[Greenman]

+1 Jhhnn there is a lot of truth to that. But none of it addresses the new reality. Quite simply we don't have the money to fulfill these promises.

There is no doubt that we'll pay it. Every one of those people will get their check, even if that means tripling taxes.

Government pensions have been the eight hundred pound gorilla in the room for the past twenty years. I remember reading about it back in the early eighty's. Nothing was done then, and nothing will be done now, everyone is busy trying to get their chunk before the system implodes.

 

[Zebo]

There is no doubt that we'll pay it. Every one of those people will get their check, even if that means tripling taxes.

Government pensions have been the eight hundred pound gorilla in the room for the past twenty years. I remember reading about it back in the early eighty's. Nothing was done then, and nothing will be done now, everyone is busy trying to get their chunk before the system implodes.

As i've said before when we go to war a government that takes our children - you can be damn sure they'll take our assets to keep nation afloat.

One little problem we owe 50 trillion and are only worth about 12.

 

[Patranus]

I won't argue that some belt tightening isn't in order. What remains to be seen, however, is if America's wealthiest will accept tightening their own, in the form of higher taxes at the tippy-top, or if their republican friends in congress will succeed in putting the pain off onto the rest of us entirely. Maybe what we really can't afford are the world's lowest tax rates on huge incomes, vast expenditures on coldwar military hardware that has no mission, wars of adventure, and a healthcare system that delivers demonstrably poorer aggregate results at 50% greater cost than any other in the first world... Maybe we can't afford to let the nation's financial elite win the class warfare they've waged for 30 years.

(Que anti-tax raving from rightwing wannabee sycophants of the wealthy.)

And what happens to the "rich" small business owner when their taxes are raised?

 

[boomerang]

Do you honestly think that the majority will go along with raising tax rates on the wealthy in order to maintain the pensions of retired government employees? If anything, people think less of government bureaucrats than they do the rich.

They might if they thought it would cover it. But this is the fallacy being purported by the left, that taxing the rich will pay for all sorts of things.

It will barely make a dent in our debt. The left puts a spin on the rich to elicit a reaction and some are buying it. It's actually just that they can't stand that someone has more than they do.

It's a misguided kindergarten mindset.

Just look at those at the top on the left. Millionaires all. But they're different? Hah!

Talk about being manipulated. Like that's something only those mean righties would do.