Skip to main content

there was an html error above the fold, that is now fixed

As a teacher I am a public employee.

I am already drawing a public pension as a result of retiring in 2012.  When I go back into the classroom next month, even though I am teaching in a jurisdiction covered by the same pension plan, I am no longer required to contribute (but as a result I also receive less pay).  Given what Michigan is trying to do with pensions in Detroit, I pay close attention to public discussion of public pensions.

One of the most important pieces on the subject recently was this blog post by Dean Baker, which took apart this lead editorial by the Washington Post, written after the filling of Detroit bankruptcy by the emergency manager.

But rather than have to wade through all that, all you really need to do is read this short blog post by Paul Krugman.  

The Post editorial says that public pensions are underfunded by $3.8 trillion.

All of this came about because of this study from the Center for Retirement Research at Boston College, which apparently the editorial board of the Post had trouble properly understanding when it analyzes the Annual Required Contribution (ARC) and reports in its summary

During 2012, using current GASB standards, the funded status of public plans declined slightly from 75 percent to 73 percent.
As Krugman writes,
According to the survey, the ARC is currently about 15 percent of payroll; in reality, state and local governments are making only about 80 percent of the required contributions, so there’s a shortfall of 3 percent of payroll. Total state and local payroll, in turn, is about $70 billion per month, or $850 billion per year. So, nationwide, governments are underfunding their pensions by around 3 percent of $850 billion, or around $25 billion a year.

A $25 billion shortfall in a $16 trillion economy. We’re doomed!

Please keep reading for a bit more - from me, and from Krugman.

In Maryland a few years ago, the employee contribution to pensions suddenly went up, from 5% to 7%.  Why?  Well, when the stock market had been doing well, the state decided that the increase in the value of the portfolio meant that it did not have to continue to fund its share of the pension costs because it was covered by appreciation, even though the actuaries for the system warned them not to follow that route.  That 40% increase in employee share was imposed when the stock market loss of value meant the plan was not on a path to the target of 80% of future liabilities funded.  That was not the only time such an approach was taken, as one can see in this story, in which once again the legislature has cut the state's contribution to the pension plan.

It was a decision to in part achieve balance in the budget on the backs of public employees, for whom the pensions were as part of total compensation a form of deferred compensation for current service.   I know a number of teachers eligible for retirement who did not continue in the classroom because the increase in contributions to the pension, and the serious increase in premiums for health care plans, felt punitive to them.

Given the relative shortfall NATIONALLY on public pensions, given the waste in defense spending, given how much goes to profits for contractors for services that could be done by government employees at all levels of government, and - most of all - given the tendency of governments at all levels not to appropriate tax the incomes of either corporate or wealthy individuals, there is realistically NO pension crisis.

Which is why Paul Krugman, after wondering why the shortfall is not really such a major issue,  ends his blog post thusly:

So, why is it being hyped? Do I even need to ask?
Know the facts.

That will put you ahead of both the editorial board of the Washington Post and those who constantly are pushing "austerity."

In the past corporations were able to raid their pension plans (when they still had defined benefit pensions) on the grounds that they were "overfunded" because of appreciation of the assets - although somehow they were not required to put the money back in when the assets depreciated.

And remember this - what happens to public employee pensions is a trial balloon for what the austerity hawks want to do with Social Security.

Have a nice life -  if you can afford it in retirement.

Originally posted to teacherken on Sun Jul 21, 2013 at 04:33 AM PDT.

Also republished by ClassWarfare Newsletter: WallStreet VS Working Class Global Occupy movement.

EMAIL TO A FRIEND X
Your Email has been sent.
You must add at least one tag to this diary before publishing it.

Add keywords that describe this diary. Separate multiple keywords with commas.
Tagging tips - Search For Tags - Browse For Tags

?

More Tagging tips:

A tag is a way to search for this diary. If someone is searching for "Barack Obama," is this a diary they'd be trying to find?

Use a person's full name, without any title. Senator Obama may become President Obama, and Michelle Obama might run for office.

If your diary covers an election or elected official, use election tags, which are generally the state abbreviation followed by the office. CA-01 is the first district House seat. CA-Sen covers both senate races. NY-GOV covers the New York governor's race.

Tags do not compound: that is, "education reform" is a completely different tag from "education". A tag like "reform" alone is probably not meaningful.

Consider if one or more of these tags fits your diary: Civil Rights, Community, Congress, Culture, Economy, Education, Elections, Energy, Environment, Health Care, International, Labor, Law, Media, Meta, National Security, Science, Transportation, or White House. If your diary is specific to a state, consider adding the state (California, Texas, etc). Keep in mind, though, that there are many wonderful and important diaries that don't fit in any of these tags. Don't worry if yours doesn't.

You can add a private note to this diary when hotlisting it:
Are you sure you want to remove this diary from your hotlist?
Are you sure you want to remove your recommendation? You can only recommend a diary once, so you will not be able to re-recommend it afterwards.
Rescue this diary, and add a note:
Are you sure you want to remove this diary from Rescue?
Choose where to republish this diary. The diary will be added to the queue for that group. Publish it from the queue to make it appear.

You must be a member of a group to use this feature.

Add a quick update to your diary without changing the diary itself:
Are you sure you want to remove this diary?
(The diary will be removed from the site and returned to your drafts for further editing.)
(The diary will be removed.)
Are you sure you want to save these changes to the published diary?

Comment Preferences

  •  Tip Jar (146+ / 0-)
    Recommended by:
    MartyM, katiec, dkmich, One Pissed Off Liberal, VTCC73, melvynny, Egalitare, mollyd, jilikins, ER Doc, jadt65, evelette, Vatexia, Temmoku, salmo, blueoasis, willrob, ruleoflaw, Chi, LamontCranston, emal, spacejam, TomP, Ian Reifowitz, triv33, Shippo1776, Mary Mike, bobswern, GwenM, Sark Svemes, Debs2, midwesterner, Byron from Denver, countwebb, qofdisks, Bronx59, grumbleberries, Dirtandiron, lurkyloo, not this time, gfre, RuralLiberal, gooderservice, splashoil, importer, fba1a, sunny skies, annetteboardman, DRo, arendt, sfbob, lilypew, zerelda, RFK Lives, hubcap, greenbell, ARS, xaxnar, TracieLynn, radarlady, SpecialKinFlag, ItsSimpleSimon, Gooserock, wayoutinthestix, David Kaib, PrahaPartizan, kck, gfv6800, elwior, OldSoldier99, psychodrew, Friend of the court, OleHippieChick, MadRuth, rapala, ScienceMom, Gowrie Gal, camlbacker, phrogge prince, USHomeopath, MarkInSanFran, doingbusinessas, Sunspots, wader, Mostel26, Alumbrados, Publius2008, Aaa T Tudeattack, mystique mist, bkamr, Brooke In Seattle, barbwires, Thinking Fella, SuWho, Al Fondy, kevinpdx, Odysseus, kerplunk, ColoTim, left turn, happymisanthropy, SherwoodB, fiercefilms, eru, Wino, waztec, gmats, Einsteinia, afisher, linkage, scott on the rock, kurious, War on Error, CaliSista, yoduuuh do or do not, left of center, denise b, jbsoul, petulans, LillithMc, cocinero, venger, cpresley, spacecadet1, Skennet Boch, FindingMyVoice, peacestpete, orangecurtainlib, vahana, sceptical observer, TX Scotia, DontTaseMeBro, peachcreek, Brian B, lcrp, ItsaMathJoke, HeyMikey, WoodlandsPerson, JerryNA, Just Bob, HCKAD, ladybug53, monkeybrainpolitics, Calamity Jean, SteveLCo, cassidy3

    "We didn't set out to save the world; we set out to wonder how other people are doing and to reflect on how our actions affect other people's hearts." - Pema Chodron

    by teacherken on Sun Jul 21, 2013 at 04:33:44 AM PDT

  •  Well, we will see if this topic is of any interest (52+ / 0-)

    to anyone except me

    I would hope that others who either are public employees or have close ties to those who are would see the importance of this topic

    "We didn't set out to save the world; we set out to wonder how other people are doing and to reflect on how our actions affect other people's hearts." - Pema Chodron

    by teacherken on Sun Jul 21, 2013 at 04:56:57 AM PDT

  •  Me - I'm a public school retiree. (32+ / 0-)

    Everything is one big lie.    From campaigns to policy, it is all one big lie.   Hope your wife is doing well.

    What we need is a Democrat in the White House. Warren/Spitzer 2016

    by dkmich on Sun Jul 21, 2013 at 05:05:05 AM PDT

  •  and if you think this is an important topic (25+ / 0-)

    it could help energize the discussion if you would

    1.  comment on the thread

    2.  recommend the diary to try to keep it visible

    of course, both are completely up to you

    "We didn't set out to save the world; we set out to wonder how other people are doing and to reflect on how our actions affect other people's hearts." - Pema Chodron

    by teacherken on Sun Jul 21, 2013 at 05:06:14 AM PDT

    •  I can understand where you are coming from Ken. (4+ / 0-)

      My mom just turned 80 this year, and is getting TTRA (Texas Teachers Retirement Assoc), SS and some from the VA.  TTRA sucks, and is getting worse.  And as that gets worse, her SS goes up.  

      Hang in there Ken, I know it is bad news.  Some of us will never retire....

      DBA

      "Death is the winner in any war." - Nightwish/Imaginareum/Song of myself.

      by doingbusinessas on Sun Jul 21, 2013 at 09:21:14 AM PDT

      [ Parent ]

  •  Thanks tk. (31+ / 0-)

    Read the Krugman. $3.8 trillion in unfunded liabilities vs $1 trillion - that's a pretty big lie. These purveyors of propaganda know no shame. There's a lot of that going around. Must be some kind of virus.

    •  simplistic (19+ / 0-)

      I love PK, but, he's being simplistic on this issue.  Yes the numbers are wrong--but--public pensions are a political football affecting relatively few voters.  It's easier to cut pension contributions than to cut "essential" services.  That's what Detroit did--very publicly and w/o political flack.  Public employees have been historically under paid in the US-- and their pensions deliberately underfunded.  Think contract Ponzi scheme.

      What's needed is a change to the bankruptcy laws--giving pensions a higher standing than other creditors--and that won't happen.  When unions were a political force, governments tended to do the right thing more often--those were the days my friend--we should have known they would end.

      Today's underfunded number is less important than the trend--and the politics behind that.  When public employees--including cops , firemen, and teachers-- go out on strike en masse for this issue, it will become a more important political issue.  Until that--it will fester--get much worse--be financially ignored.  Governments are like any other employer, abusive and selfish whenever possible.  No countervailing force (unions) seems up to the challenge today-- and the media is now also the enemy.  Don't put lipstick on the pig--or the elephant--or the donkey.  This is a huge problem for public employees.

      Under capitalism, man exploits man. Under communism, it's just the opposite. John Kenneth Galbraith .

      by melvynny on Sun Jul 21, 2013 at 05:57:43 AM PDT

      [ Parent ]

    •  And a lot of of the pensions are invested in (1+ / 0-)
      Recommended by:
      Dirtandiron

      lots of international schemes like building private highways in 3rd world companies.

      The monied ppl would steal gold out of the teeth of their grandparents, NO the would pull the whole tooth.

      Pensions are one of the few resources keeping Wall Street and the Banks here and abroad propped up.

      Next up?  Inflation because, well, you might still have some savings left.  The monied was us all impoverished and/or uber struggling.

      And here's a new trend.  Uber conservative Utah is raising property taxes officially.  They've been resorting to fee tricks and stuff.  I may have to sell and move!  This is UTAH?  

      It's difficult to be happy knowing so many suffer. We must unite.

      by War on Error on Sun Jul 21, 2013 at 12:20:09 PM PDT

      [ Parent ]

      •  taxes (1+ / 0-)
        Recommended by:
        War on Error
        Uber conservative Utah is raising property taxes officially.  They've been resorting to fee tricks and stuff.  I may have to sell and move!  This is UTAH?  
        Probably not one peep from the media about that, either. Democrats have some small tax increase and the media is "OH MY GOD, old people and poor people will lose their houses, you will have to move soon too! PANIC" But when a Republican raises property taxes-the sound of crickets.

        Where are all the jobs, Boehner?

        by Dirtandiron on Sun Jul 21, 2013 at 12:44:47 PM PDT

        [ Parent ]

  •  Why aren't public employees just put into SS? (6+ / 0-)

    Seems like that would help SS and your contributions would be about 6 percent versus a higher percent.

    Sure, you'd have to save on top of it, but we all do.

    •  many are - (13+ / 0-)

      there are SOME public retirement plans which did not participate in SS, but that started disappearing a long time ago.

      As Maryland school teachers we contributed to BOTH SS and the state pension.  Right now that means 14.65% of one's gross salary.

      I was already vested in SS before I became a teacher in 1995 because I had at that point well over the necessary minimum - in fact I had more than 20 years contributing to SS.

      "We didn't set out to save the world; we set out to wonder how other people are doing and to reflect on how our actions affect other people's hearts." - Pema Chodron

      by teacherken on Sun Jul 21, 2013 at 06:04:17 AM PDT

      [ Parent ]

      •  And many aren't. (10+ / 0-)

        I live in a Machine Dem city, so my perception may be skewed.

        But here they are mostly separate, except for a few, which I think is wrong.

        Pension should be on top of SS, not as a replacement for SS.

        And, you know, 14 percent ain't that much. I give 22 percent to my 401k on top of my 6 percent to SS.

        •  Yes (1+ / 0-)
          Recommended by:
          Justanothernyer

          There is no reason for everyone not to contribute to SS, regardless of whatever other retirement money may be available to them.

          (-5.50,-6.67): Left Libertarian
          Leadership doesn't mean taking a straw poll and then just throwing up your hands. -Jyrinx

          by Sparhawk on Sun Jul 21, 2013 at 01:00:59 PM PDT

          [ Parent ]

        •  The 401k money is yours. Pension money is not. (0+ / 0-)

          Not when politicians can change the terms of pensions at will.  They can write a new law, and millions of dollars of costs per year just disappear.

          •  not quite correct (2+ / 0-)
            Recommended by:
            Mostel26, HM2Viking

            1.  any money you have contributed is still yours.  That is why if you leave before retirement you can get it out, tax free if you roll it into a 401K or 403B

            2.  depending on the state, once you are vested, you are entitled to the government's contribution as well, and if you leave before retirement, same as in #1

            3.  What is not guaranteed even if one is retired is COLAs.

            4.  Some governments encourage you to contribute to a 403B even beyond the retirement by matching the first few dollars. When I worked in Arlington County Government, they would match the first $25/pay period put into a 403B.  Once they put it in, it was yours.

            Yes, in bankruptcy, whether of government or of a private corporation, pensions are NOT at the top of the list for creditors, so even money you have contributed is at risk.

            But absent that, the terms can be changed, but that does not apply to what is already in the pot.

            "We didn't set out to save the world; we set out to wonder how other people are doing and to reflect on how our actions affect other people's hearts." - Pema Chodron

            by teacherken on Sun Jul 21, 2013 at 07:13:44 PM PDT

            [ Parent ]

            •  Think we are talking about 2 different plan types. (0+ / 0-)

              You are coeect that you keep any $ in defined contribution plans.  I meant that you cannot cash out $ in defined contribution plans.  I guess there are very few defined benefit plans left any more (which may prove my point).

              •  no, I am talking defined benefit plans (0+ / 0-)

                wnere you have contributed, which is true of most public employee pensions, which are defined benefit but to which you contribute pre-tax dollars.  That is what I had in teaching jobs in both MD and VA.  I only taught in Virginia for one year so had no vesting in the employer contributions on my behalf, but was able to get out all of my contributions, and had a choice of rolling them over into an IRA and leaving them non-taxed as of yet or taking them as cash and paying taxes on it.

                "We didn't set out to save the world; we set out to wonder how other people are doing and to reflect on how our actions affect other people's hearts." - Pema Chodron

                by teacherken on Mon Jul 22, 2013 at 07:11:11 PM PDT

                [ Parent ]

      •  Best 14% of pay you'll ever do. Don't have... (1+ / 0-)
        Recommended by:
        Dirtandiron

        to save a penny in bankster IRA's/401K's. Unless, of course, Maryland tucks it to ya.

    •  State's pension funds are a cookie jar (3+ / 0-)

      States use pension funds because they get enormous benefits, the employees not so much.  

      •  That's kind of simplistic. T'is the Bankster's (0+ / 0-)

        that benefit the most. For the State's t'is a pain.
        Get with the program.

        •  Alas no, banksters and state pols feed each other (3+ / 0-)

          States adopted their own pension system because it afforded them short and long term benefits, many of them unethical or illegal.  The extreme and cynical example of those benefits was Governor Rhodes "loaning" money at 0% interest with no repayment date, which I recall because I had money in the fund.  Rhodes of course, got a political contribution or two from those guys.  He was far from alone in finding ways to personally and politically benefit from control of that vast pool of money.  Here are links to more contemporary scandals: http://www.propublica.org/... and http://www2.ucsc.edu/....  The money involved is serious, but of course, those getting those benefits are hardly likely to be starting a public discussion of the process.

          Then we get to the historic underfunding of public employee pension funds.  It allows politicians to promise more than they deliver, which for the pol is a feature, not a bug.  They have not been doing that all these years, in all those states, by accident.  

          •  Your first link is broken. No Gov Rhodes in 2nd... (0+ / 0-)

            Rhodes is a bankster just like his cronies. He ain't the "State."

            Underfunding is a big scary voodoo doll that banksters show us to get interest rates up and do other mojo shit.

            •  No (1+ / 0-)
              Recommended by:
              Notreadytobenice

              Jim Rhodes was governor of Ohio for two sets of two consecutive 4 year terms.  Gilligan's victory following the first set of terms was attributed in part to scandals during Rhodes' administration, among which were the "loans" to which I made reference.  Rhodes was a crook, seriously corrupt.  As to the assertion that he was a bankster, not the State, if the Governor acting in his capacity as the chief elected official of a state doesn't count as an act of the State, what exactly is it?  This was all years ago, to be sure, but not all that long ago when I made the decision that state pension funds delivering deferred compensation was not assured.

              That history was important to me, but I sought a more recent example or two to make the same point in this exchange.  The two links I included were just the first two results from Googling "scandals in state pension fund management."  There are lots more.  I have no idea why they didn't work for you, but I suppose my lack of expertise could well have created a problem.  The general point, though, bears repeating.  It should surprise no one that part of those very substantial management fees the financial sector takes from state pension funds find their way back to the elected and appointed officials who control the funds.  Is there some reason to believe that those officials in state after state are unmindful of that potential benefit to them and take no part in them, scandals notwithstanding?  Nothing to see here, really?  Political corruption is not all that uncommon after all, as a scan of the diaries here will show.  

    •  i contributed to both (0+ / 0-)

      As a mn state employee i contributed to both ss and msrs.between the 2 systems i contributed 25% of salary for 25 years. As a form of forced savings it was and is a great system.

      My inlaws are appalled that i am able to work as a federal employee and draw my state pension. They just don't understand that pensions are part of total compensation.

      They think that my pension is written from the state treasury rather than from my account that is a combination of personal contributions, employer match and earnings.

      Public employee pensions are deferred compensation. The antipension meme gets very old especially when the pensions have been used to keep compensation levels below the free market value of the position.

  •  The dirty secret...at least the secret... (21+ / 0-)

    ...the Financial Elites want us to at best hurriedly gloss over is that there have been too many eyes on Public Pensions to have the hijacked to the extent they have been in the Private Sector. So even as there is a great deal of handwringing of the eminent demise of Detroit's employee pensions, the actual gap between obligations owed and ability to meet them is really not great. There was no easy way for the Financial Elites to quickly monetize the liquidation of Public Pensions. Speed is important: as the Detroit bankruptcy will show, the more light is shown on the details, the less intractable stabilizing Detroit will be seen to be.

    When you are right you cannot be too radical; when you are wrong, you cannot be too conservative. --Martin Luther King Jr.

    by Egalitare on Sun Jul 21, 2013 at 06:02:46 AM PDT

  •  one of Bakers favorite topics - the AAUL (4+ / 0-)
    Recommended by:
    Temmoku, salmo, mystique mist, Odysseus

    discount rate (more or less: the assumed rate of return on pension assets) - is lurking in the background of the Detroit bankruptcy and may become very important.  if the assumed ROR is 8% - which the city financial statements assume - then the Accrued Actuarial Unfunded Liability (AAUL) is around half a billion.  if its closer to the "risk free" ROR (often pegged to treasury rates; the pension horizon is 30 years, so around 3.5%), then the liability is closer to 3.5billion, which is the number that's been thrown around in the press.

    if the bankruptcy court permits any discharge of the AAUL, then that liability calculation will be very important: the higher the liability, the larger the recovery by the pension if the court orders that some % of the AAUL be funded.  the lower the liability, the less the fund would get.  Baker has always defended higher RORs, so this could put him in a tight spot: continue to defend higher RORs even if it means less for the pension, or switch his position for political reasons.

    •  Synder thinks bigger. Governorship is nothing. (6+ / 0-)

      Want to be the darling of the Republican party, like, forever? Bust the public sector unions, once and for all, and Detroit is looking like it'll be the test case, easy pickings, at that. How do you do that? It's one of the oldest tricks in the book:

      "If you don't like the game, change the rules."
      In their July 19 edition, NY Times (excerpts):
      Detroit Gap Reveals Industry Dispute on Pension Math
      ...Seemingly out of nowhere, a $3.5 billion hole appeared in Detroit’s pension system, courtesy of calculations by a firm hired by the city’s emergency manager.
      How did that happen? Well, start from the start.
      To calculate a city’s pension liabilities, an actuary instead projects all the contributions the city will probably have to make to the pension fund over time. ...Pension plan trustees set the rate of return, usually between 7 percent and 8 percent...In addition, actuaries “smooth” the numbers, to keep big swings in the financial markets from making the pension contributions gyrate year to year...These methods, actuarial watchdogs say, build a strong bias into the numbers...If the critics are right about that, it means even the cities that diligently follow their actuaries’ instructions, contributing the required amounts each year, are falling behind, and they don’t even know it.
      How do you authenticate (change the rules to what you want) pension plan management? You establish a task force. Of course.
      A Public Plans Reputational Risk Task Force was convened.
      ...the Blue Ribbon Panel, which was composed not of actuaries but public policy figures from a number of disciplines. Panelists include Richard Ravitch, a former lieutenant governor of New York; Bradley Belt, a former executive director of the Pension Benefit Guaranty Corporation; and Robert North, the actuary who shepherds New York City’s five big public pension plans.
      Who are these guys, anyway?
      Richard Ravitch
      (Wikipedia)
      In 2012 Ravitch co-chaired (with Paul Volcker) the "State Budget Crisis Task Force." The Ravitch Volcker report, which reviewed the fiscal strength of six US states, said more transparent accounting of government liabilities was needed and warned that the capacity of state governments to meet various needs would be increasingly crowded out by the growth in Medicaid spending and retirement.
      Paul Volcker? That guy? And ah, Medicaid.

      Robert North
      (Bloomberg, Jan 13, 2012)

      New York’s chief actuary is recommending that the city’s $115.2 billion pension plans lower their assumed annual rate of return on assets to 7 percent from 8 percent, which would open a funding gap of at least $2 billion next year, according to two people familiar with the proposal.
      In New York, they want this guy's head on a stick.

      Bradley Belt
      (Wikipedia)

      Prior to establishing Palisades, he served in the Bush administration as the executive director of the Pension Benefit Guaranty Corp. Belt had been previously appointed by President Bush to the Social Security Advisory Board, and he helped shape and communicate administration policy on pension and retirement security issues.
      The Bush Social Security Advisory Board. Uh huh.

      The Society of Actuaries 'Blue Ribbon Panel' has come up with a roadmap for Republicans to shitcan public sector unions once and for all. Starting with Detroit, since it's easy pickings, it looks like they'll probably get away with it.

    •  historically (0+ / 0-)

      Minnesota state retirement system has earned around 8-10% in both up and own markets. The large pension funds get the benefit of economy of scale that a 401k plan can never match.

      The ror is defensible as an assuumption. Employees who leave the plan and take their contributions earn 4% on their refund and the employer keeps the value of employer match above that value.

      My tsp account has always earned about 9% annually. The pension plan ror assumptions are if anything an underestimate of probable earnings.

  •  I went to a post 4th of July family party to visit (27+ / 0-)

    my cousins...who are not teachers. They work in the building trades. Their anger at Teachers and Teacher's pensions "which comes out of their taxes!" was palpable. They were practically spitting in our faces. Did you know that teacher's get $200,000 a year in pensions? We are retired but my husband worked in private schools for most of his career. His pension is actually quite paltry. We live off mine which is a quarter of that mythical pension amount.

    The lies and distortions are out there and no matter what amount of reasoning or facts will have no effect. We are leeches and are bankrupting the system. Right up there with al those welfare cheats who "sell" their food stamps for drugs and booze.

    Won't be at the next post 4th of July family gathering.

    It is the fault of all those pensions and teachers who drive Mercedes Benz es that are parked in the teacher parking lots!

    Sheesh!

    Thanks

    Character is what you are in the dark. Emilio Lizardo in Buckaroo Bonzai

    by Temmoku on Sun Jul 21, 2013 at 06:09:56 AM PDT

    •  The problem in Illinois pension funds is (14+ / 0-)

      also "manufactured". When Judy Barr Topinka was our Treasurer, she "allowed" the State stop paying into the Teacher's Pension funds as a "money saving" measure. Now our State faces the prospect of "kicking" that money back in that was so unfunded for the years she was Treasurer. So the State is going bonkers because it still wants to "unfund" their obligation.

      And Judy is now our Comptroller and signs our retirement checks from the Teacher's retirement fund(which we paid into for all those 30+ years).

      And Judy, on a local TV interview claimed that it was all Blagojevic"s fault, she had nothing to do with the "unfunding"!!!!!

      Nice to have it both ways....like he(Blago) had so much control and Quinn has none concerning the budget!!!!

      She is such a dissembler.

      Character is what you are in the dark. Emilio Lizardo in Buckaroo Bonzai

      by Temmoku on Sun Jul 21, 2013 at 06:38:01 AM PDT

      [ Parent ]

    •  wow (9+ / 0-)
      my cousins...who are not teachers. They work in the building trades. Their anger at Teachers and Teacher's pensions "which comes out of their taxes!" was palpable
      Are they in a union? I work in construction, in a union, and my experience has been that a lot of the wingnut types hate us almost as much as they hate the teachers. So anybody in the building trades who says that shit like your cousins ought to realize we're pretty much on the side of the teachers.

      Where are all the jobs, Boehner?

      by Dirtandiron on Sun Jul 21, 2013 at 06:57:29 AM PDT

      [ Parent ]

      •  Sadly, (7+ / 0-)

        too many union members are also on the unions are bad bandwagon. Everybody else has it too good and there is rampant corruption, etc. I don't get it.

        Oh for crying out loud!

        by 4mygirls on Sun Jul 21, 2013 at 09:03:40 AM PDT

        [ Parent ]

      •  The trade unions, at least some, in NJ (1+ / 0-)
        Recommended by:
        Dirtandiron

        have backed Sweeney and Christie. pretty sure the building trades is going for Christie. I could be wrong....Sweeney is the highest ranking Dem in NJ.

        •  NJ (0+ / 0-)
          pretty sure the building trades is going for Christie. I could be wrong....Sweeney is the highest ranking Dem in NJ.
          The building trades have a history of taking a beating for supporting the losing side for governor in NJ. Florio vs. Whitman in the '90s comes to mind. IIRC, Whitman's first act as Governor was an executive order repealing project labor agreements. Christie seems to be the likely winner so that must be on their minds when they decide whom to back for Governor.  I think the official union endorsements are really about pragmatism, real world politics and fear more than conservatism.

          Where are all the jobs, Boehner?

          by Dirtandiron on Sun Jul 21, 2013 at 06:38:31 PM PDT

          [ Parent ]

      •  Actually, I think they may not be union... (0+ / 0-)

        they are "independent contractors"...who do not pay into a pension plan. As they informed me...they have no pension plan...which is their own fault..they are old enough to know better and will be sorry in a few years when they turn 60.

        Character is what you are in the dark. Emilio Lizardo in Buckaroo Bonzai

        by Temmoku on Sun Jul 28, 2013 at 06:32:34 PM PDT

        [ Parent ]

    •   a school counselor in NJ i know retired in 2010 (1+ / 0-)
      Recommended by:
      Dirtandiron

      He had 25 years in, and retired at 55 due to a series of strokes and a heart attack. his current pension is around 20k and change per year.

      •  My friend startd teaching late and got 15 years in (0+ / 0-)

        before she retired. Her pension is about $14,000 per year. She works part-time at a Junior College to supplement her income.

        Character is what you are in the dark. Emilio Lizardo in Buckaroo Bonzai

        by Temmoku on Sun Jul 28, 2013 at 06:34:54 PM PDT

        [ Parent ]

  •  Let's be honest....we keep being told how retirees (22+ / 0-)

    have pensions so that the politicians can just "tweak" SS....well retirees have lost most if not all of their pensions and the trend continues.  There are billions of dollars that SHOULD have gone into pension funds that never made it there or the company (city, town, state etc.) "liquidated" the funds to "help" in a bad economic downturn promising to replace the funds which never happened or the funds were a part of bankruptcy, a sale or the company, etc.  Union companies asked employees to take lower wages and benefits in order for them to get a nice pension but stopped funding the pension in the 1970's while negotiating up until now......  Retirees are just finding out how screwed they are and there is no damn recourse...the company (city etc.) just tells them that they are "lucky" to get anything....even if it is $92 per month instead of the $825 they planned on.....and now with the lack of jobs there is no way to make up for that loss.  Our Overlords are gleefully stuffing their money away and planning to rape the rest of the funds including SS as soon as they can.....

    So the "plan for retirement" is just never retire making that the new normal......

  •  .... (23+ / 0-)

    I keep wondering what these people with no scruples expect the elderly to do with reduced or no retirement funds that they have paid into over the years?  Aunt Edna, who is 80 with multiple health issues can't exactly go sack groceries in the local store.  We will still have older people.  Many of them will not be in good health.  Even if they had investments, many lost a lot of wealth when the greedy (who are still doing quite well) tanked the economy.  Workers who lived on minimum wage or low wages could hardly have found a lot of extra money to contribute to savings.  

    What is supposed to happen to these people?  Living with family is one option, but many families are on the edge financially already.  Some don't have family.  Are these people supposed to just go off into the woods and die?  

  •  Defined benefit pension plans (26+ / 0-)

    in the private sector have become close to being an endangered species. The move is on to get rid of them in the public sector. Setting public employees off against workers who no longer have them or never had them is a very effective political tactic.

    •  Maybe the answer is "retirement packages" (11+ / 0-)

      like those CEOs and bankers get when they retire! Stock options and cars and homes in Lake Tahoe!

      I could use that!!!!

      Character is what you are in the dark. Emilio Lizardo in Buckaroo Bonzai

      by Temmoku on Sun Jul 21, 2013 at 06:46:53 AM PDT

      [ Parent ]

    •  That makes me wonder if (9+ / 0-)

      the concept of "retirement" will be changing. I do not have a defined plan although I contribute to a 403B it won't be enough. My plan is to keep working full time as long as I can, ie as long as I have decent health and work exists. I wonder if there will be a proliferation of elderly people staying in the low wage job market because of that.

    •  If the private sector doesn't get pensions... (1+ / 0-)
      Recommended by:
      johnny wurster

      ...there is no reason for the public sector to get them either.

      Especially in the current economic environment, "deferred compensation" should not exist for public employees. All compensation of any type should be provided the week the work was performed.

      If towns and cities want to provide good retirement benefits, they can always match 401k contributions 2-to-1 up to 20% or whatever. In this manner, the burden fully falls on current taxpayers instead of hoping future ones will cover it.

      (-5.50,-6.67): Left Libertarian
      Leadership doesn't mean taking a straw poll and then just throwing up your hands. -Jyrinx

      by Sparhawk on Sun Jul 21, 2013 at 07:42:26 AM PDT

      [ Parent ]

      •  so you are willing to do away with (14+ / 0-)

        bonuses

        stock options

        deferred compensation for high-paying executives

        ALL of that, right?

        Let  me see you post a diary on that and then maybe I will believe you are serious.

        "We didn't set out to save the world; we set out to wonder how other people are doing and to reflect on how our actions affect other people's hearts." - Pema Chodron

        by teacherken on Sun Jul 21, 2013 at 08:16:26 AM PDT

        [ Parent ]

        •  Why would I care what private companies do (1+ / 0-)
          Recommended by:
          johnny wurster

          I am not paying their salaries and am not on the hook for their obligations. If I'm a shareholder I might care.

          And again, Ken, I am not opposed to good benefits for public employees, I am opposed to deferred compensation models where the burden falls on future taxpayers to cover today's services. If you want to give good benefits, pay for those benefits today with real money, not with promises for tomorrow.

          (-5.50,-6.67): Left Libertarian
          Leadership doesn't mean taking a straw poll and then just throwing up your hands. -Jyrinx

          by Sparhawk on Sun Jul 21, 2013 at 08:24:53 AM PDT

          [ Parent ]

          •  so you are also opposed to Social Security (9+ / 0-)

            where the cost in part is placed upon future generations.

            Oh, and so is paying for the national debt, so you must be opposed to that as well.

            "We didn't set out to save the world; we set out to wonder how other people are doing and to reflect on how our actions affect other people's hearts." - Pema Chodron

            by teacherken on Sun Jul 21, 2013 at 08:27:58 AM PDT

            [ Parent ]

            •  Thomas Jefferson himself... (1+ / 0-)
              Recommended by:
              Odysseus

              ...opposed intergenerational public debts and I suspect would be horrified by the current state of US public finances.

              As far as SS goes, I support it in principle as long as the actuarials work out because it is available for everyone, public and private workers alike (yeah yeah, some public workers chose not to pay in, I get that, not really relevant to my point).

              SS is a special case where I think the intergenerational nature of the compact is a good thing. Very different than asking private state and local taxpayers to cover legacy pension obligations promised in another era, in a situation where all these people have no hope of ever getting a pension themselves.

              (-5.50,-6.67): Left Libertarian
              Leadership doesn't mean taking a straw poll and then just throwing up your hands. -Jyrinx

              by Sparhawk on Sun Jul 21, 2013 at 08:35:35 AM PDT

              [ Parent ]

          •  Ahemm -- You DO Contribute (9+ / 0-)

            Sorry, you are on the hook for the contributions made to excessive executive compensation, even if you're not a shareholder.  Every dollar deducted from revenues which reduces the tax obligation for these service vampires increases your share of the load.  The same applies to every other taxpayer.  You're just deluding yourself when you think you aren't carrying these parasites around on your back.

            "Love the Truth, defend the Truth, speak the Truth, and hear the Truth" - Jan Hus, d.1415 CE

            by PrahaPartizan on Sun Jul 21, 2013 at 08:31:41 AM PDT

            [ Parent ]

            •  the deduction to the company is income (2+ / 0-)
              Recommended by:
              Sparhawk, Justanothernyer

              to the executive, where its taxed at a higher rate.  IOW, you got it backwards.

              •  I think I saw a comment recently that executive (0+ / 0-)

                compensation that's of a certain kind is fully tax deductible by the corporation.  So if the corporation doesn't pay taxes on it, everyone else gets to make up the difference.

                I know you're more versed in these issues than I am, so you'll be able to clarify here.  Maybe you're saying the executive is taxed at a higher rate, not the company, but isn't the executive able to have the compensation taxed at 15% (or whatever long term capital gains is) compared to normal salary?  So both the company and the executive don't pay taxes that the small business and owner of that small business would?

                •  most execs are taxed at 39.6% for income (4+ / 0-)
                  Recommended by:
                  Sparhawk, Balto, Justanothernyer, ColoTim

                  tax plus 3.8% for Medicare and another 2.9% for the company share of Medicare.  the comp they get, whether options or equity or cash, is taxed as regular earned income, not 15% rates (there are limited exceptions that usually don't apply to highly compensated execs)

                •  ColoTim - there is no way to structure any (4+ / 0-)

                  compensation for highly paid Fortune 2000 executives that is taxed at anything less than the top marginal earned income rate. None of their equity compensation, stock options, restricted stock awards, or any other type of equity compensation can be structured to qualify for long term capital gains treatment. At some of the Silicon Valley rockets like Facebook or Google the founders have founders shares, which are regular common shares they receive when the company was a few people in a garage (or dorm room). When those people sell their original founders shares it is taxed at long term capital gains rates.

                  I believe what you read is the tax credit companies receive when stock options are exercised and the executive pays the income tax and that's true. The company does receive a credit when the executive exercises his option, sells his shares and pays ordinary income tax rates on that transaction.  

                  The only highly paid executives who can structure some of their compensation to qualify for long term capital gains are mangers of investment partnerships like, real estate, oil & gas, venture capital, private equity and hedge funds. They are able to do that because of the unique character of partnerships, profits and losses are allocated by contract not on the basis of capital contributions, and some Tax Court rulings in the early 1970s.

                  "let's talk about that"

                  by VClib on Sun Jul 21, 2013 at 05:37:31 PM PDT

                  [ Parent ]

                  •  Thanks. I think what I was reading were (0+ / 0-)

                    descriptions of Rmoney style compensation, and he does make a lot of his money through those types of deals.

                    •  CotoTim - Romney as the managing partner (1+ / 0-)
                      Recommended by:
                      ColoTim

                      and later retired equity holder of Bain Capital was in one of the few positions where they can structure a significant portion of their income to be treated as long term capital gains. Those structures aren't available for the executives of the Fortune 2000 or even the too big to fail banks.

                      "let's talk about that"

                      by VClib on Mon Jul 22, 2013 at 10:11:51 AM PDT

                      [ Parent ]

                      •  Lucky for him he has skilled accountants who (0+ / 0-)

                        can get him the special breaks his lobbyists have carved out for him.

                        •  ColoTim - it doesn't take particular skill (1+ / 0-)
                          Recommended by:
                          ColoTim

                          While I think the Boston & DC offices of PriceWaterhouseCoopers provide Romney with the best possible tax advice this is old established law that doesn't take any particular insight or skill. The treatment of "carried interest" hasn't changed in more than 40 years and was dictated by the Tax Court so it wasn't a special break that any lobbyist or member of Congress advocated.  

                          "let's talk about that"

                          by VClib on Mon Jul 22, 2013 at 01:30:55 PM PDT

                          [ Parent ]

            •  Nonsense (0+ / 0-)

              Just total nonsense.

              (-5.50,-6.67): Left Libertarian
              Leadership doesn't mean taking a straw poll and then just throwing up your hands. -Jyrinx

              by Sparhawk on Sun Jul 21, 2013 at 10:05:07 AM PDT

              [ Parent ]

          •  Ok, but what happens . . . (1+ / 0-)
            Recommended by:
            Dirtandiron

            . . . when somebody converts those funds to another use.  Getting the funds paid today is no guarantee of anything.  If that were true 401ks would not be a disaster.  Right?  What you want is to transfer the risk from the firm to the individual.  That is happening to an astonishing degree in this country.  The problem is society is going to pay anyway, one way or another.

            If we are going to elect Democrats, lets elect real ones!

            by waztec on Sun Jul 21, 2013 at 09:42:12 AM PDT

            [ Parent ]

            •  Sorry. . . (0+ / 0-)

              I meant transfer the risk from the firm, or government to the individual.

              If we are going to elect Democrats, lets elect real ones!

              by waztec on Sun Jul 21, 2013 at 09:43:47 AM PDT

              [ Parent ]

            •  Re (0+ / 0-)
              If that were true 401ks would not be a disaster.  Right?  What you want is to transfer the risk from the firm to the individual.  That is happening to an astonishing degree in this country.
              If it's good enough for the private sector, it's good enough for the public sector. Even if all your criticisms of 401ks were true, we in the private sector deal with these risks every day. No reason public sector workers shouldn't have to share them.

              (-5.50,-6.67): Left Libertarian
              Leadership doesn't mean taking a straw poll and then just throwing up your hands. -Jyrinx

              by Sparhawk on Sun Jul 21, 2013 at 10:02:28 AM PDT

              [ Parent ]

              •  Private sector employees. . . . (7+ / 0-)

                . . .used to receive pensions.  The private sector stole them, renegotiated them, bankrupted out of them and in their place gave their employees 401ks which will end up burdening the public sector when they fail.  Many people gave up payment to get those pensions. When I worked for the public sector I gave up 40% in up front pay to get a chance that pension.

                You want individuals to assume risks not commensurate with their ability to influence the economic environment around them.  And that is what think is the basic flaw in everyone for themselves, which is what you espouse.

                If we are going to elect Democrats, lets elect real ones!

                by waztec on Sun Jul 21, 2013 at 10:15:42 AM PDT

                [ Parent ]

                •  Re (0+ / 0-)
                  . . .used to receive pensions.  The private sector stole them, renegotiated them, bankrupted out of them and in their place gave their employees 401ks which will end up burdening the public sector when they fail.  Many people gave up payment to get those pensions.
                  I never agreed to cover any pension benefit as a lot of these decisions were made before I was born. Any locality where pension benefits become too onerous many people will simply pack up and leave for a more competitive environment [often the town next door], and take their salaries with them.

                  Private workers don't care at all what kind of agreements you made in 1985 with people who are probably dead now. We want services in exchange for taxes. Pensions provide no services. The fact that public workers supposedly took a pay cut to cover pension obligations will be cold comfort because it will not stop the private citizens who foot the bill from leaving. You agreed to take this risk, despite perhaps not realizing you were agreeing to it. Those are the perils of "deferred compensation".

                  And finally, like I said before, even if all your critiques of 401ks were valid, there is no reason at all why public workers shouldn't have to deal with the same BS we in the private sector have to do.

                  (-5.50,-6.67): Left Libertarian
                  Leadership doesn't mean taking a straw poll and then just throwing up your hands. -Jyrinx

                  by Sparhawk on Sun Jul 21, 2013 at 10:24:19 AM PDT

                  [ Parent ]

                  •  In exchange for. . . (8+ / 0-)

                    . . .a current payment I (at that time)agreed to defer payment, which saved taxpayers money-then. You did not pay me enough then so, I could not afford a bank account.  

                    Now you are screaming because you paid less then and more now?  If I accepted less pay to defer the risk - you got the benefit. I don't want you to get the benefit.  I want my entire pay.  I performed the service-before.  I cannot take it back.  And I don't like you enough to make that sacrifice.  So pay up! I want a bank account to compensate for the pay I lost serving you!

                    Or. . .

                    I bought a car from you, but I am on an installment agreement with you.  And I don't want to pay any more.  Sorry about the dents in the car.  And Oh, I forgot to put oil in it. Sorry!

                    Your argument is simple.  I want public sector employees to be screwed like I was.  You should direct the anger toward those who caused the private sector difficulty.

                    If we are going to elect Democrats, lets elect real ones!

                    by waztec on Sun Jul 21, 2013 at 11:20:17 AM PDT

                    [ Parent ]

                    •  It wasn't me (0+ / 0-)

                      I wasn't a taxpayer in 1985. You made an agreement with people who may be dead now and certainly aren't running policy. In any case, it is irrelevant because taxpayers have the physical power to simply pack up and leave.

                      Now you are screaming because you paid less then and more now?  If I accepted less pay to defer the risk - you got the benefit. I don't want you to get the benefit.  I want my entire pay.  I performed the service-before.  I cannot take it back.  And I don't like you enough to make that sacrifice.  So pay up! I want a bank account to compensate for the pay I lost serving you!
                      You didn't serve me, you served people who are mostly dead now who made promises on my behalf that they had no idea if I would be willing or able to keep. You accepted their promises on my behalf at face value and didn't once question whether the money would actually be there. Did you get screwed? Maybe, but that's certainly not my problem. I have my own life to live and mouths to feed.

                      You can demand payment all you want. We can come to an agreeable arrangement or I'll just start looking through real estate listings for more competitive places to live.

                      Again, this statement might sound harsh but it is how private taxpayers (liberals and conservatives) actually see things. It's a tough world out there and everyone is trying to stretch a buck as far as they possibly can, including tax dollars.  

                      (-5.50,-6.67): Left Libertarian
                      Leadership doesn't mean taking a straw poll and then just throwing up your hands. -Jyrinx

                      by Sparhawk on Sun Jul 21, 2013 at 11:50:55 AM PDT

                      [ Parent ]

                      •  db pensions are a (1+ / 0-)
                        Recommended by:
                        Dirtandiron

                        Cheaper for the taxpayer. Your ignorance shows with every post. Retirement savings are EVERYONES problem.

                        The fixfor the privatesector is GRA

                        The fix for municipalities is statewide pension plans. See minnesotas PERA for an example.

                        Bottom line is to fix retirement plans we need to minimize fees through larger investment pools.

              •  It is NOT good enough for the private sector (2+ / 0-)
                Recommended by:
                Dirtandiron, Mostel26

                I guess you don't get out from under that rock of yours too often. Do us all a favor and crawl back, because you are adding nothing intelligent to the discussion.

                •  Not good enough (0+ / 0-)

                  And yet that's the reality that private workers live with whatever you think is appropriate. Until that situation is rectified, there is no reason for public workers not to work under the same framework. None at all.

                  (-5.50,-6.67): Left Libertarian
                  Leadership doesn't mean taking a straw poll and then just throwing up your hands. -Jyrinx

                  by Sparhawk on Sun Jul 21, 2013 at 08:27:06 PM PDT

                  [ Parent ]

              •  ass backwards (1+ / 0-)
                Recommended by:
                Dirtandiron

                We need to strengthen the private sector savings plans.

                You are making a race to the bottom argument. Public employees are relatively undercompensated for their ksa.

                Contributory db plans do not obliate taxpayers for future obligations. As a mn employee i paid 6%, the state matched 6% and investment earnings made up the difference for funding the annuity.

        •  Don't take the bait Ken (2+ / 0-)
          Recommended by:
          Dirtandiron, Mostel26

          Sparky is a well known troll here. He seems to think it is fun to spout libertarian bullshit here. He's not always out to lunch on everything, but can be relied on to espouse talking points that smarter, brilliant economists, like Paul Krugman and Joe Stieglitz, regularly debunk. He should head over to Cato or Heritage and stay with his own kind.

          •  oh I know about Sparhawk (3+ / 0-)
            Recommended by:
            leftangler, Dirtandiron, Mostel26

            shows up in my diaries with regularity

            if you challenge him on one indefensible point he changes ground and tries again

            very much like some lawyer I know

            doesn't mean they are winning the argument or even think that they are, although in this I suspect the bloviations are what is actually believed

            "We didn't set out to save the world; we set out to wonder how other people are doing and to reflect on how our actions affect other people's hearts." - Pema Chodron

            by teacherken on Sun Jul 21, 2013 at 05:07:57 PM PDT

            [ Parent ]

      •  So a person who worked 45 years. . . (13+ / 0-)

        . . .for a government should go back to 1968 and demand full pay for their work?  You would take away a benefit these people counted on and disregard the effect on them.  You are pretty callous, there pal. (you would call it freedom, I guess)

        When I was a kid I worked for the government in a job also worked by a private sector employee  (the jobs were exactly the same)  he made $40,000.00 and I made $8,000.00.

        As to 401 ks, well they are a shift of burden from large resource entities to the individual.  My mother-in-law had one which was worth something until 2008 and then she was eff'd.  When my father-in-law dies she will be poor.

        By your lights Social security and medicare should not exist either, because money goes into an account and it is disbursed to others.

        You know,  Libertarianism works well if people are equipped to be free agents.  It is not a useful ideology when we are all interdependent.

        If we are going to elect Democrats, lets elect real ones!

        by waztec on Sun Jul 21, 2013 at 09:33:20 AM PDT

        [ Parent ]

        •  Re (0+ / 0-)
          . . .for a government should go back to 1968 and demand full pay for their work?  You would take away a benefit these people counted on and disregard the effect on them.  You are pretty callous, there pal. (you would call it freedom, I guess)
          Generally I am speaking about future pensions as opposed to current ones. If I were in charge of public policy, I would freeze all existing pensions and convert all future payments to both new-hire and current employees into 401k payments.

          However, in principle I do not see a problem with pensioners taking a hit from the por state of public finances. It's not like there's some amazingly deep pool of money to fund existing pensions from. The pension payments are being maintained by that 26-year old guy with a wife and two children who works at Wal Mart for $11/hr. Why should that guy be on the hook for promises that were made in 1968?

          By your lights Social security and medicare should not exist either, because money goes into an account and it is disbursed to others.
           
          Medicare and SS are benefits available to the entire population who will expect to use their benefits in due time. Close to zero private workers will ever receive a pension. Why should a private worker be expected to shell out to fund a benefit that he or she will never receive themselves?

          (-5.50,-6.67): Left Libertarian
          Leadership doesn't mean taking a straw poll and then just throwing up your hands. -Jyrinx

          by Sparhawk on Sun Jul 21, 2013 at 10:00:27 AM PDT

          [ Parent ]

          •  You transfer risk from those with. . . (4+ / 0-)

            . . .an ability to shoulder and affect them to the individual who rarely has that market power.

            Why should I pay to clean up pollution created by a private firm who employs that person? Come on!

            If we are going to elect Democrats, lets elect real ones!

            by waztec on Sun Jul 21, 2013 at 10:18:22 AM PDT

            [ Parent ]

            •  Re (0+ / 0-)
              You transfer risk from those with. . . (0+ / 0-)
              . . .an ability to shoulder and affect them to the individual who rarely has that market power.
              Yup, that's true. It already happened to us in the private sector, no reason it shouldn't happen to you. I'll be happy to discuss improving public benefits again when private benefits start to improve.

              (-5.50,-6.67): Left Libertarian
              Leadership doesn't mean taking a straw poll and then just throwing up your hands. -Jyrinx

              by Sparhawk on Sun Jul 21, 2013 at 10:26:20 AM PDT

              [ Parent ]

              •  I got screwed and you should too. . . (7+ / 0-)

                . . .That is the gist of your argument.  Shouldn't your argument be that private sector employees have been hurt by a transfer of wealth to the already fortunate, because they have less bargaining power and those who benefited should pay for that transfer?  

                You espouse dog eat dog.  Unfortunately, the rest of us have  bear the costs of that attitude. While you espouse this, the real cause/problem remains unaddressed.

                Again I ask where did I say that I was a current government employee?

                If we are going to elect Democrats, lets elect real ones!

                by waztec on Sun Jul 21, 2013 at 10:56:58 AM PDT

                [ Parent ]

              •  Then you support a 'fuck you' race to the bottom (4+ / 0-)
                Recommended by:
                Spron, Odysseus, Dirtandiron, Mostel26

                Every time one 'side' of the workforce (public,private) loses something then they should just root for the workers on the other side to lose it too?

                Charles and David K. would certainly approve of that attitude!

                A few months ago, I think on Daily Kos, there was reference to a (Russian?) folk proverb about a peasant who is granted a wish by some magical being and receives a cow - his neighbor is also granted a wish - but has a different request - he wishes that his neighbor's cow dies.

      •  Nonsense. (2+ / 0-)
        Recommended by:
        waztec, Mostel26
        If the private sector doesn't get pensions...
        ...there is no reason for the public sector to get them either.
        Good ideas are good ideas.  They can be implemented in any context.

        Do you have any actual argument at all that properly funded defined benefit plans are actually bad?  Unrealistic assumptions on rates of return can always fail, but a poor implementation does not damn the concept.

        Defined Contribution only institutionalizes discrimination.  Favored workers getting raises can ensure a better retirement than people who speak out against bad policy, or people who are victims of racial or sexual discrimination.

        What needs to be done is to structure any defined benefit plan such that the funding and assumptions are integral.  Automatically issue General Revenue bonds at the assumed rate of return for the exact annual pension amount.

        -7.75 -4.67

        "Freedom's just another word for nothing left to lose."

        There are no Christians in foxholes.

        by Odysseus on Sun Jul 21, 2013 at 10:59:04 AM PDT

        [ Parent ]

      •  yawn. (0+ / 0-)

        To put the torture behind us is, inevitably, to put it in front of us.

        by UntimelyRippd on Sun Jul 21, 2013 at 11:09:05 AM PDT

        [ Parent ]

      •  Right wing talking points n/t (1+ / 0-)
        Recommended by:
        Mostel26

        Where are all the jobs, Boehner?

        by Dirtandiron on Sun Jul 21, 2013 at 07:09:02 PM PDT

        [ Parent ]

      •  disagree (0+ / 0-)

        We need to shitcan the 401k system and replace it withguaranteed retirement accounts for the private sector.

        Contribution based db plans do work. The 457 model for public employees actually costs tTaxpayers more than a db plan.

    •  On a go forward basis equity will drive public... (3+ / 0-)
      Recommended by:
      Mostel26, left turn, Odysseus

      ...sentiment away from these various legacy commitments. But they are commitments.

      For bankruptcies pensions should come first in line in front of other creditors and federal bail outs should be restricted to those pensions.

      That will prevent bottom feeders from driving up debts with bad loans and force necessary reforms.

      The days of disparate contract based employer dependent pensions are over. They're not equitable, too inefficientand expensive .

      A single national solution decoupled form employers will be far cheaper, equitable, and invulnerable to the whims and cycles of this or that public or private employer.

  •  Arguments about the rate of return that actuaries (10+ / 0-)

    use for pension accounting have been around for a long time and periodically resurface.  But the actual return is measured too, so it is quite possible to see if that assumed rate of return measures up to the rate of return over time.  Pension funds not required for present use are long term investments and may be invested for a higher rate of return  than treasury rates.

    Pension returns will vary year to year even if the smoothed actuarial return is around 8%.  But some years it will be much more and some years much less.  The average return on the T Rowe Price S&P 500 index fund I just looked up is 8.89% since inception in 1990.  This year it is currently at 20.29 % and the 5 year average is 6.79%.  Of course it had at least a couple of big negative return years in there as well.  This sort of return is where the actuarial numbers come from.

    The greatest government failing (and corporate too for that matter if they still have a defined benefit pension) is that they underfund during years of high actual returns deluding themselves and taxpayers that they don't have to put the money in.

    So I say that it isn't that the actuaries are wrong.  The problem is that the government fails to put the money in. If the government had deposited the funds they were supposed to have deposited there would not be a problem.

    •  Pension accounting is always an estimate. (4+ / 0-)

      If you take out a $100K loan payable over 10 years at 5% interest, you know the exact amount of liability to record on the books. With any pension plan there are always multiple unknowns, the return on investments, the life expectancy of individual retirees, etc. If you change the assumptions you make about any of those factors, it changes the amount of the liability. It is only with hindsight that it is possible to determine the accuracy of the actuarial estimates.

      The reason that governments fail to put in money in bad economic times is because they would have to either cut other expenses or raise taxes to do it. Those are not politically popular options.

  •  Fed's super-low rates meant to smash pensions (9+ / 0-)

    Very hard to fund a pension/retirement of any kind, individually or collectively, at 0.75% interest on savings.  

    Fed interest rate policies look to me like a feature, not a bug.

  •  Funny how politicians talking about unfunded (7+ / 0-)

    pension liabilities never talk about improving the economy and the job situation.  (In fact, most of the "crisis" talk assumes no economic growth in the US over the next 10-20 years.  That's nonsense, of course.)  A growing economy and jobs will fix  most of whatever they think is wrong.  Why aren't they talking about jobs ?  

  •  Public and private pensions are terrible ideas (4+ / 0-)

    Its just not practical to burden simple currency users like states and local govts, or private businesses with the responsibility of providing retirement income for millions of people who are not working, and for the rest of their lives.  This is a burden that only the currency issuer, aka the Federal Govt, should take on.  There is only one institution in the world that has the Constitutional authority to create US dollars and that is Congress.

    Article 1 Section 8 of the Constitution states:
    To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures

    States and local Govts plus businesses are all non-sovereign with respect to the US dollar, we all must earn or borrow dollars before we can spend them.  The Federal Govt is sovereign over the US dollar and is the only body that is not revenue constrained.  

    Just think about how much easier it would be for states to fund themselves if they didn't have to pay so many people to not work.  We should have a national retirement pension program provided by Congress.  That would leave people free to save or spend as much of their working life money as they want while still being guaranteed a stable and secure retirement upon turning 65

    "The Earth is my country and Science my religion" Christiaan Huygens.................... Please join our Kos group "Money and Public Purpose". The gold standard ended on August 15, 1971, its time we start acting like it.

    by Auburn Parks on Sun Jul 21, 2013 at 07:01:19 AM PDT

    •  Well, Wall St could not charge fees for that.... (2+ / 0-)
      Recommended by:
      TracieLynn, Sunspots

      and 65 is too old for retirement. The age should be lowered. Many people don't make it to 60, let alone 65.

      •  Great. I'm all for earlier retirement as an optio (1+ / 0-)
        Recommended by:
        leftangler

        "The Earth is my country and Science my religion" Christiaan Huygens.................... Please join our Kos group "Money and Public Purpose". The gold standard ended on August 15, 1971, its time we start acting like it.

        by Auburn Parks on Sun Jul 21, 2013 at 11:33:46 AM PDT

        [ Parent ]

    •  "Providing income for millions . . . (6+ / 0-)

      . . .who are not working?"  Those employees entered an agreement to accept deferred payments.  Pensions are a payment for work already performed under an agreement.  By your logic not working makes you ineligible for payment.  Why shouldn't a financial institution not pay out on your 401k? You aren't working and too much time has passed and financial circumstances have changed, so you should not receive it.  Ooops, I am sorry they already do that.

      If we are going to elect Democrats, lets elect real ones!

      by waztec on Sun Jul 21, 2013 at 09:55:23 AM PDT

      [ Parent ]

      •  Admittedly, I can see where you mighth perceive (0+ / 0-)

        my comment as a misunderstanding of pension contributions as a part of total compensation.  I assure that I understand fully where that money comes from:
        1.  worker contributions
        2.  companystate and local govt contributions in lieu of increased wagessalary.
        3.  the interestgains earned from the investment the pension funds make over time.

        You are making it seem as if you think I don't think workers have earned their retirement incomes, that assumption is wrong.  I have met very few people who would want as much guaranteed income for every man and woman in America at retirement as me.  I personally advocate for a guaranteed retirement income of at least 2X whatever the current poverty level is.  Right now, this would be ~40,000 per year per single and ~$55,000 per couple.  Thats guaranteed income (indexed to inflation) for every single retired American.  The question is who pays for it?

        Only the Federal Govt is sovereign over the US dollar.  Its the issuer, the US dollar comes from the US Govt, per the Constitution.  Businesses and local Govt's are nothing more than currency users, just like you and me.  Therefore, I simply think its prudent for the cost of the program to be borne by the only institution that is not revenue constrained, the Congress.

        "The Earth is my country and Science my religion" Christiaan Huygens.................... Please join our Kos group "Money and Public Purpose". The gold standard ended on August 15, 1971, its time we start acting like it.

        by Auburn Parks on Sun Jul 21, 2013 at 11:42:26 AM PDT

        [ Parent ]

  •  Chris Christie largely based his governorship (11+ / 0-)

    on berating the teacher pensions and refusing to fund them because there is no sense funding a system that is broken, he says. And for this David brooks and Morning Joe can't stop kissing his ass for "taking the state's powerful teacher's union" well that union just saved special ed's butt here in NJ as the governor's task force wanted to eliminate important parts of a very effective evaluation system here. I never miss the chance to explain to people how bad Christie has been, because all we hear about is Snyder, Walker, Scott and we never hear about Christie in the same breath, when he is as bad or worse than these others. By the way UE went up in NJ, so much for the billion dollar tax cuts to the wealthy ' job creators"

  •  I withdrew from a public pension 1n 1984 (6+ / 0-)

    I was vested in a public pension plan in 1984, and withdrew my money when the opportunity presented itself, on the basis of the obvious underfunding.  I should add that my previous employment by the State of Ohio, where then Governor Rhodes made quite a stink by "loaning" public employee retirement funds at 0% interest with no payback time, had some bearing on the decision.

    On the whole, it was the right choice.  Over time, the benefits have been whittled away through things like claw backs, which would definitely have applied to me.  Of course, our current governor is proposing significant downward adjustment to further balance the budget on the backs of not just current employees, but those in the pool of retirees.  

    About that time, I started seeing senior corporate people routinely refusing to live up to the terms of their contracts.  Perhaps that was because that was about the time in my career when I started leading projects that required me to work with bond dealers working in investment banks on Wall Street.  I also got to know senior people at the state, whose ethics looked a lot like the Wall Streeters.  It should be no surprise that what passed for morality on Wall Street in the 80's is now normal in the state houses and governor's mansions across the nation.  Differed compensation simply no longer is assured compensation.  

    This is not to endorse the various schemes that have employees putting retirement funds into various Wall Street scams - where the annual fees eat the benefits.  I was in a couple of those too because employers matching money was too good to turn down.  At 2.75% per year, the beneficiary was really the firm managing the retirement money.  The money came out as soon as I was allowed to withdraw it.  

    I don't have a good answer to the question of "What's to be done?"  I was able to invest the money in real estate and my small business (later).  From the mid-80's to 2007, that turned out to have been a good strategy.  I urge my children to build themselves a small business on the basis that our sociopathic, plutocratic elites are on track to steal any other form of security.  Real estate probably won't work out as well for them as it did for me.  They have good prospects, I think.  But, building a small business is not for everyone.  Far from it.  The average kid is screwed.  We used to know that this is the kind of thing government does best.  I'm hopeful our nation will rediscover that truth.

  •  The people in Congress are like the unjust steward (3+ / 0-)
    Recommended by:
    sfbob, salmo, mystique mist

    in the biblical parable. Their sole interest is in staying in office and feathering their nests for when they aren't. The prospect of being fired makes them more rapacious. So, they use their control of the public purse to reward friends and punish critics. Citizens, who have the power to fire their asses are not their friends. So, they funnel what they can to banks and try to withhold the rest without being too obvious.
    But, the fact is that the Congress is tasked with producing the currency and, if there's not enough, it's because they've mismanaged it.

    We organize governments to deliver services and prevent abuse.

    by hannah on Sun Jul 21, 2013 at 07:11:51 AM PDT

  •  Krugman is being kind of flippant. (2+ / 0-)
    Recommended by:
    Sparhawk, johnny wurster

    $1 trillion is almost a third of the federal budget.  That makes it very difficult for any kind of federal bailout, due to the sheer amount of money required.

    The main problem is, compared to the actual tax base of many of these state and local governments, the pension requirements are crippling.  They don't have all $16 trillion of the US economy to tax.

    •  umm, look at the CURRENT costs (8+ / 0-)

      necessary to bring pensions into compliance.

      If you purchased a house at the time interest rests were above 10%, when you got the interest disclosure and you saw how much interest you would pay over 30 years, it might have scared the bejeesus out of you.

      But for most people, that did not stop them from taking on the mortgage.

      The total nut necessary to fix the problem is relatively tiny, which is what was in the original report, and which Baker pointed out as does Krugman.  To state it in gross terms is to intentionally and unnecessarily scare people into thinking no fix is possible.

      "We didn't set out to save the world; we set out to wonder how other people are doing and to reflect on how our actions affect other people's hearts." - Pema Chodron

      by teacherken on Sun Jul 21, 2013 at 08:19:53 AM PDT

      [ Parent ]

      •  Two issues (5+ / 0-)
        Recommended by:
        Richard Lyon, Odysseus, Balto, Sparhawk, MGross

        First, the costs are not distributed evenly across plans.  There are a number of plans which are funded quite well.
        And there are unmitigated disasters like Detroit and Illinois.

        Second,  as Krugman notes, the shortfall may be several times larger if, as is suggested, the wrong discount rates are being used.   Note that everyone involved (political leaders, union leaders and pension trustees and actuaries) has a strong incentive to overstate the expected return on investments and understate the size of resultant pension liabilities (where, as under GASB rules, the discount rate on the liabilities is equal to the expected rate of return on investments). And, if one concludes that discounting of liabilities should be done the same way for public pension liabilities as for all other liabilities including private pension liabilities, the number increases further.

    •  You are comparing decades to a single year. (0+ / 0-)

      That is wrong.  That's like saying you'll never pay off your multi-year car loan because the total is too much of your annual salary.  The shortfall in one year is not $1T, but rather $25B.  The $1T is the total shortfall, which can be paid off over time, and will earn interest while doing so.

      Even if you were right about the debt, cities and suburbs contain the vast majority of the US population (~80%), which makes the vast majority of the US economy, so you'd still be wrong about the tax base.

  •  What I don't understand is why the retirees don't (3+ / 0-)

    Stop this and insist that a board containing retirees is/are instated for every public pension fund to monitor what is done.

  •  I am the exception here (16+ / 0-)

    I'm a federal employee. I have been one for nearly 37 years and am therefore under the Civil Service Retirement System. At this point I'm part of a vanishingly small minority. Most of the people in CSRS have already retired; I have not. Anyone who entered federal employment after 12/31/83 is part of the Federal Employee Retirement System (FERS). FERS employees contribute to Social Security while CSRS employees do not. FERS consists of a small contribution to CSRS, the Thrift Service Plan (TSP the federal employees' equivalent to a 401k) and Social Security. FERS employees receive an automatic 1% contribution to the TSP and matching funds up to I believe 5% of their own contributions out of salary.

    FERS was introduced in 1987, meaning that federal employees hired between 1/1/84 and the date FERS went into effect were in limbo. Money was set aside for a "program to be created." In other words these folks agreed to become federal employees while having no idea what sort of retirement benefits they'd receive. It was pretty damned scandalous and in truth I wonder why anyone would have agreed to become a federal employee under such circumstances. Naturally when FERS was introduced there was considerable pressure for CSRS employees to convert to FERS. While there were a few--very few--people who might have benefited from such a move (it was suggested that those who were planning to retire right away might do better under FERS), for the rest of us, we looked at each other and asked "how stupid do you think we are?" Needless to say I stuck with CSRS which is a defined benefit plan backed up, unlike other such plans, by the full faith and credit of the federal government.

    Somewhere in the bowels of the Office of Personnel Management is an actuary who is hoping that every one of us remaining CSRS employees, and all of the CSRS retirees, dies quickly. As for my colleagues; even the most prudent investors among them have no idea what it will take for them to be able to retire and live decently afterwards.

    It seems to me that every attempt is being made to picture those of us in defined benefit plans as somehow privileged. If being "privileged" means that we don't have to worry about outliving our retirement savings, I suppose that counts; otherwise it is nothing more than to an attempt to lower the expectations of American workers. To me this is a disgrace. Everyone who works hard for a living for thirty to forty or more years should be able to live in retirement without fear of falling into poverty. Instead this is being laid out as a normal occurrence for all except the wealthiest. This is the biggest disgrace of all.

    •  A defined benefit plan (8+ / 0-)

      is a better thing for an employee to have than a defined contribution plan. The people who still have them are becoming a dwindling minority. So, it does get easier to portray them as a privileged elite.

      For the most part the American public is quite willing to fall for it.  

      •  We pay for it (2+ / 0-)
        Recommended by:
        johnny wurster, Justanothernyer

        The private sector covers all public sector costs.

        If they get pensions and we don't, one might forgive private workers for accusations of elitism.

        (-5.50,-6.67): Left Libertarian
        Leadership doesn't mean taking a straw poll and then just throwing up your hands. -Jyrinx

        by Sparhawk on Sun Jul 21, 2013 at 08:19:24 AM PDT

        [ Parent ]

        •  you pay for it whether it is salary or benefits (16+ / 0-)

          you can make a decision you do not want the benefits of public service in which case I wonder if perhaps you should head to a libertarian site.

          Public employees over the years have taken less in direct compensation now in return for benefits, including retirement.

          The total compensation, including all benefits, for public employees, has in general been less than that for those of equivalent skills and background.

          And for those who have been public employees for some time, or who are already retired, to change the terms of their pensions while it might technically be legal is a violation of the agreement under which they served as public employees.

          "We didn't set out to save the world; we set out to wonder how other people are doing and to reflect on how our actions affect other people's hearts." - Pema Chodron

          by teacherken on Sun Jul 21, 2013 at 08:22:54 AM PDT

          [ Parent ]

        •  And the public sector. . . (4+ / 0-)

          . . .covers externalities not properly addressed by the private sector.  See pollution, infrastructure, scientific research, legal system.

          I pay every day to support the private sector through my taxes.  I dare you to tell me I don't.  

          You might forgive me for accusing private corporations of elitism.

          Your argument is specious.

          If we are going to elect Democrats, lets elect real ones!

          by waztec on Sun Jul 21, 2013 at 10:05:20 AM PDT

          [ Parent ]

          •  Re (0+ / 0-)
            And the public sector. . . (0+ / 0-)
            . . .covers externalities not properly addressed by the private sector.  See pollution, infrastructure, scientific research, legal system.
            All 100% paid for by the private sector. We employ you to do those things because it makes more sense than to have corporations handle them. It doesn't mean we in the private sector have some special obligation to you. There is no reason why you deserve a pension and the rest of us don't. If you don't like your compensation package you can quit and go work for the private sector.
            I pay every day to support the private sector through my taxes.  I dare you to tell me I don't.  
            You are a net consumer of public money. The private sector is a net producer of public money. That's the difference. You don't "pay taxes" except on paper. If all private industry packed up and left your locality your salary would be zero. Private export industry pays all the bills, all the time [except for some very rare public industry projects].
            You might forgive me for accusing private corporations of elitism.
            This isn't private corporations, it is the private citizens who employ you to do a job and expect good service at economical prices in exchange. You are a public servant, and it makes sense that you get the same pay and benefits that the rest of us in the private sector do.

            (-5.50,-6.67): Left Libertarian
            Leadership doesn't mean taking a straw poll and then just throwing up your hands. -Jyrinx

            by Sparhawk on Sun Jul 21, 2013 at 10:16:33 AM PDT

            [ Parent ]

            •  Who said I was a public employee? (3+ / 0-)
              Recommended by:
              Odysseus, Mostel26, HM2Viking

              I am not the private sector.  Why should I pay to clean up after Exxon? I have no obligation to Exxon!  That is your logic.

              You are a public servant, and it makes sense that you get the same pay and benefits that the rest of us in the private sector do.

              But I got less pay, demonstrably less pay, for a chance at the pension when I was a public employee.

              "You are a net consumer of public money. The private sector is a net producer of public money. That's the difference."

              I said I was a public employee, not am a public employee.  Even if I were, how can you say that my production would be less valuable to the private than yours a a private sector employee?  Your philosophy assumes that public employees are not a value producer for the economy and that is not necessarily true.  It also assumes that private sector employees are less productive and capable.  I'll debate that one with you any time.  I went to a large business school with many co-students.  Yeah, I'll debate that one with you.

              Your philosophy also assumes that business non line functions such as R&D are parasitic, because they do not immediately contribute to the profit of the firm.

              If we are going to elect Democrats, lets elect real ones!

              by waztec on Sun Jul 21, 2013 at 10:36:15 AM PDT

              [ Parent ]

              •  I am not in the private sector as a . . . (1+ / 0-)
                Recommended by:
                Mostel26

                . . . rhetorical position.

                If we are going to elect Democrats, lets elect real ones!

                by waztec on Sun Jul 21, 2013 at 10:38:52 AM PDT

                [ Parent ]

                •  Errata. . Sorry about this! (1+ / 0-)
                  Recommended by:
                  Mostel26

                  . . .my production would be less valuable to the private sectorthan yours. . .

                   It also assumes that  (public) sector employees are less productive and capable.

                  I am sorry about that.  I am having trouble getting my "H" key yo work  It is throwing me off.

                  If we are going to elect Democrats, lets elect real ones!

                  by waztec on Sun Jul 21, 2013 at 10:43:47 AM PDT

                  [ Parent ]

          •  The public sector (5+ / 0-)

            also helps corporations who dont pay adequate compensation, eg Walmart, where a large percentage of workers receive some type of public assistance.

            Democrats give you the Bill of Rights; Republicans sell you a bill of goods!

            by barbwires on Sun Jul 21, 2013 at 10:22:13 AM PDT

            [ Parent ]

            •  That's not the public sector (0+ / 0-)

              Other corporations pay those bills, just like they pay every bill.

              (-5.50,-6.67): Left Libertarian
              Leadership doesn't mean taking a straw poll and then just throwing up your hands. -Jyrinx

              by Sparhawk on Sun Jul 21, 2013 at 01:05:57 PM PDT

              [ Parent ]

  •  The retirement system in New York... (9+ / 0-)

    ...for state employees has been split up over the years into what they call tiers. The latest is Tier 6. This website spells out the differences between tiers, and how they've been changing for the worse over the years.

    Every time the state runs into a budget crunch, it seems like the very first thing they do is go after the state employees. They ask for give backs, institute lag payrolls, talk about 'reforming' the pension system...

    And there's a very vocal anti-union rhetoric that charges that state employees are over paid and underworked because the politicians need their votes. Very popular line of thought among those who think NY taxes are too high, resent state employees for having benefits they don't, and think NY Government is too big in any case.

    What they never acknowledge is that A) state employees actually provide services people in NY need, B) they have to pay taxes on their salaries too, and C) it truly creates jobs - because state employees put that money back in the economy right where they live.

    "No special skill, no standard attitude, no technology, and no organization - no matter how valuable - can safely replace thought itself."

    by xaxnar on Sun Jul 21, 2013 at 08:10:04 AM PDT

  •  It's the $mil/$bil private muni bond invesestors! (2+ / 0-)
    Recommended by:
    ScienceMom, Alumbrados

    They're looking at Detroit's Chap.9 and moving to slow the clock while they plot their retreat from heavy concentration in tax free municipal bonds.  

    I just completed my own 2q financial report & unsurprisingly found that my retreat from equities into bonds and real estate showed RE up by >30% and bonds way over-committed. So it's time to make a change. BFD.

    Those muni holders are the really big fish and they're testing the waters for federal bailouts. Steve Rattner's article this weekend proposing a federal bail out is all about protecting Bloomberg type portfolios and nothing to do with the city or the 700k residents. He shills for federal $$ by using GM as an example of protecting both investors and the "company" but that's BS. Only the big preferred holders were protected. Those of us average schmucks holding GM stock lost 100%. Fuggettaboutit. That scam is spent.

    Detroit is bankrupt and has been for a while. Legitimize the bankruptcy so the necromantic lending is halted. Then have a lottery to give away the abandoned and municipal properties and see what organically arises when people are freed from the yoke of foreign "investors" with hands out for federal bail outs suck blood from dumb ass stones

  •  Over at Washington Monthly, more on this (6+ / 0-)

    Both Krugman and Baker come up with comparisons to show the real size of the 'problem' with pension funding. At Washington Monthly, Samuel Knight picks up this as well in a short piece on Sunday Reads:

    *Dean Baker and Paul Krugman are hammering away at the Washington Post for fear-mongering about municipal finances in the wake of the Detroit debacle. The pair have pointed out that the Post is using a Boston College study to mislead readers about state and local government employees’ unfunded pension liabilities to the tune of $2.8 trillion.

    But I suppose $2.8 trillion isn’t a big deal to the Post. After all, it’s around what we’ll be spending looking for the phantom nukes in Iraq that the Post reported were real, and very scary and now has a hard time admitting never existed.

    There really doesn't seem to be much need for the Washington Post these days, unless you want a handy guide to whatever the current brain rot is inside the beltway.

    "No special skill, no standard attitude, no technology, and no organization - no matter how valuable - can safely replace thought itself."

    by xaxnar on Sun Jul 21, 2013 at 08:37:28 AM PDT

  •  There's a pattern here... (9+ / 0-)

    Whenever there's some kind of economic distress, or even when there isn't, there is always a group of people to be found claiming that if we keep spending money on X, we'll suffer a terrible calamity.

    Oddly enough, the loudest voices seem to be among those with the most money, who have no trouble spending it to hire people to spread the fear among those who don't have nearly as much money, but do have numbers.

    And also oddly enough, the "X" they're so worried about is usually the young, the old, the poor, the sick, minorities. The most vulnerable among us in other words. These are who they target, and that's best described as predatory behavior.

    To extend the analogy, it's as though wolves have convinced sheep dogs that they are in mortal peril from the sheep in their flock - so the wolves get the sheep dogs to turn on the sheep.

    And the wolves get fat.

    "No special skill, no standard attitude, no technology, and no organization - no matter how valuable - can safely replace thought itself."

    by xaxnar on Sun Jul 21, 2013 at 08:48:16 AM PDT

  •  Reporters, by and large, aren't that well (1+ / 0-)
    Recommended by:
    mystique mist

    educated. As long as they can quote a source for a number, they're good to go. Progressives need to be alert for that kind of thing, since there is a swarm of "think tanks" out there, giving academic titles to their propagandists to legitimize them as authorities. Sources, IOW, for the phony numbers.

  •  3 decades ago a GASB expert* tried to warn (0+ / 0-)

    that public employee pensions were underfunded (because they really were.)  That was long before any "teaparty" was created, so this issue's not just their creation (even though  they hype it.)  Few municipalities and other public employee groups heeded that warning to make necessary (and gradual) adjustments over the past few decades.  
      No doubt many plans are still underfunded to some extent.  But as Krugman rightly highlights, drastic immediate cuts aren't necessary, and aren't the right way to address the problem.

    *  Dr. William Holder

    My Karma just ran over your Dogma

    by FoundingFatherDAR on Sun Jul 21, 2013 at 10:36:40 AM PDT

  •  It's So Much More Fun To Demonize Public (3+ / 0-)
    Recommended by:
    CaliSista, Mostel26, HM2Viking

    employees, pensions, and unions.

    "I think that gay marriage is something that should be between a man and a woman.” - Arnold Schwarzenegger 2003

    by kerplunk on Sun Jul 21, 2013 at 10:42:10 AM PDT

  •  Nothing mentioned here about the USPS (3+ / 0-)

    The Postal Service, in my opinion, is having to fund the retirement of workers for the next 75 years, and by the time the USPS funds this huge account, they're going to be privatized and that huge pot is going to be given to whatever company takes them on for pennies on the dollar.  When it comes time for the workers to retire, it will be underfunded, if there at all, and there will be nobody around who was involved in the theft to account for it - not the politicians who mandated it, not the fat cats who told the politicians to do it and certainly not whatever company takes on the USPS.  I believe they're counting on the USPS to keep shrinking so the pension fund will be grossly over-funded based upon the few workers left.

  •  NAFTA - free? My Free ass.. (2+ / 0-)
    Recommended by:
    teacherken, gmats

    Look... We all know that song about who they came for first.

    Time to change the track. Maybe the whole album! They came for the overpriced workers in factories and Inc's that had some type of union representation for the workers + benefits FIRST. The golden shovel near the Wall broke the ground. Ship teh dirt & product oversea's! Because oil is cheap & this model is truly sustainable so we can jack up prices realtime on widgets... sorry (argh) tangent apology..

    Now.. the machine is after the next larger group of humans in the USA.. the "public" people. Backbones. Might as well just add the boomers to this group, basically anyone looking to retire and anyone looking for true security - HEALTH, DENTAL, retire benie's.. to give back the years of working back into the cumulative "good" for a modern society.

    Precedent. All legal mumbo f'ing precedent. This is what Detroit is about. In fact all over this wonderful land, like Maryland! Money sitting idle in PENSIONS. The so called politicians are merely Proxies for lurching Lex Luthers to steal from years of service and sacrifices.

    I wish I had a joke to tell... but am currently vibrating with pure anger. It is a 'nother "bad" day.

    Ken, I truly love your diaries... and thank you for your service.

  •  The middle class is reaping the whirlwind (2+ / 0-)
    Recommended by:
    teacherken, HM2Viking

    of being distracted by a long sequence of bright & shiny things (intermixed with dark & sinister things) as boardroom criminals raided their corporations' pension funds to pay themselves (& occasionally big shareholders) off handsomely, declared bankruptcy, blamed the greedy employees for bankrupting the company with their "outrageous" pensions, threw the liabilities onto the underfunded Federal program of last resort, & then told their retirees to blame the dadgum gummint for not being able to pay off 100 cents on the dollar.

    As it is, the banksters & Kochroaches point to public employees & say to the muddled masses, You're not getting a pension (mostly because we stole it from you, but in the words of Airplane! , that's not important now) so why should we let them steal our tax dollars for theirs?

    The parallel with SocSec should be obvious--but it goes beyond that. It's part & parcel of an obscene corpitalist economy where whole industries (not just "health insurance" but that's the poster-child) make big bucks by taking people's money in exchange for services to be rendered at a later time & then refusing to perform said services, daring their customers to come after them serene in the knowledge that (1) they have better lawyers and (2) they can all too often throw enough sand in the wheels of justice to delay any reckoning until any plaintiff lacking corporate immortality & deep pockets dies or goes broke.

    We the people might have saved ourselves a lot of heartache if we'd only thrown the first of those crooks into jail--or hung them from the nearest lamppost & let them rot there as a warning to the rest...(figuratively, of course...)

    BALTIMORE RAVENS--SUPER BOWL XLVII CHAMPIONS! WOOO-HOOO!

    by Uncle Cosmo on Sun Jul 21, 2013 at 12:05:10 PM PDT

  •  Airlines (2+ / 0-)
    Recommended by:
    cocinero, HM2Viking

    When airlines ended pensions and tossed both their workers and retired onto the government agency for 30 cents on the dollar, the US yawned.  It couldn't happen to them.  At the same time the CEOs of the airlines were becoming very fat off airline money.  Now government workers with pensions in Detroit are going to take a cut in bankruptcy court.  This is a state where the "emergency manager" takes over and sells everything they can.  Detroit pays taxes, but the state bleeds them into a slum.  If anyone with a government pension does not react to Detroit, it could happen to you next.  Pension money is a pot of candy to those looting the US.   If you still have a union, better get them active and fighting.  Even OJ got to keep his pension.  Behind every GOP action is aways a pot of money they want to put in their personal pocket.

  •  Thanks for this (1+ / 0-)
    Recommended by:
    HM2Viking

    As a retired public employee, Krugman's article was reassuring. The public retirement system in Iowa (IPERS) seems to be in pretty good shape. Our governor has not shown any signs of wanting to change the system. That's probably because, as the longest serving governor in the country, he will get a big retirement benefit.

bink, Thumb, Alumbrados, Paleo, Chi, Odysseus, left of center, importer, Gooserock, melvynny, emal, mrhelper, Wintermute, Troutfishing, RFK Lives, MarkInSanFran, hubcap, geordie, Dave G, Einsteinia, wonkydonkey, whenwego, mollyd, wader, HeyMikey, RuralLiberal, annetteboardman, lcrp, Major Kong, zerelda, ScienceMom, Emmy, Leaves on the Current, Josiah Bartlett, Gowrie Gal, Skennet Boch, radarlady, salmo, shagnaski, denise b, lilypew, qofdisks, SherwoodB, ArchTeryx, grimjc, Brooke In Seattle, eru, jane123, FindingMyVoice, kerplunk, snoopydawg, jilikins, Brian B, peacestpete, xaxnar, splashoil, ruleoflaw, kck, blueoasis, jeff bryant, triv33, gpoutney, gooderservice, NearlyNormal, sceptical observer, ER Doc, midwesterner, Persiflage, doingbusinessas, Ian Reifowitz, lakehillsliberal, Friend of the court, Temmoku, Aaa T Tudeattack, cpresley, Thinking Fella, ammasdarling, One Pissed Off Liberal, lobo charlie, SpecialKinFlag, camlbacker, Debs2, psychodrew, Wino, LillithMc, Mary Mike, sfbob, HCKAD, gfre, bobswern, Bronx59, TomP, bkamr, left turn, weegeeone, wayoutinthestix, OleHippieChick, elwior, jakebob, monkeybrainpolitics, Calamity Jean, Wek, WoodlandsPerson, petulans, phrogge prince, Notreadytobenice, venger, Al Fondy, clent, DontTaseMeBro, arendt, Dirtandiron, spacecadet1, ARS, War on Error, EquationDoc, CaliSista, astral66, jpmassar, vtgal, not this time, Just Bob, ItsSimpleSimon, Egalitare, Funkygal, Publius2008, Patate, USHomeopath, cocinero, fiercefilms, afisher, vahana, swale44, gmats, boomerchick, Sark Svemes, peregrine kate, VTCC73, Vatexia, Sunspots, jadt65, SuWho, Williston Barrett, We Won, lurkyloo, Mostel26, orangecurtainlib, FreeSpeaker, peachcreek, willrob, MartyM, David Kaib, ItsaMathJoke, OooSillyMe, Kayjay, Ramoth, katiec, Windowpane, countwebb, kbeagle, GwenM, JerryNA, Icicle68, k9kiki, Tigerlady, OldSoldier99, Liberty Equality Fraternity and Trees, jbsoul, mystique mist

Subscribe or Donate to support Daily Kos.

Click here for the mobile view of the site