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An Irrevocable Right to Benefits?
Lisa Fleisher of the WSJ reports, New Jersey Pension Gap Grows:
New
Jersey's pension gap grew to $53.9 billion in the last fiscal year, up
from $45.8 billion, thanks to market losses and a lack of state
funding, according to figures released Thursday by the state.
The
looming pension burden, largely ignored by the state for the past
decade, has ballooned into a nearly unmanageable problem that will push
state and local finances into a corner in coming years, dropping large
bills in the laps of already strained taxpayers.
Gov. Chris
Christie's administration said the gap, which reflected the state's
investment positions as of June 30, highlighted the need for proposed
cuts to current public workers' pensions.
The new calculations
mean the state has 62% of the money it needs to pay retirement benefits
promised to roughly 720,000 state and local workers over the next
decade, down from 66% a year earlier. But the state is using an annual
8.25% rate of return, which critics say masks the problem by being
overly optimistic
"As all states,
they're getting it wrong," said Eileen Norcross, a George Mason
University researcher who has studied New Jersey's budget and pensions.
Using a 3.5% rate of return, she had estimated the previous liability
at $173 billion.
For most of the past decade, New Jersey
politicians from both parties have skipped required payments to the
pension fund while giving increases in benefits to workers. Faced with a
tight budget, Mr. Christie skipped a $3.1 billion payment this year,
which experts said all but guaranteed a higher gap next year.
Mr.
Christie, a Republican, wants to reverse a 9% pension bump workers
received in 2001 under a Republican administration. A spokesman for
Senate President Stephen Sweeney said he would work on changes that
would "ensure workers who have been promised a pension get one," adding
the governor needed to fund the pensions.
Unions
argue their members have an irrevocable right to benefits they have
earned, and the governor has said he will meet the unions in court.
Public workers pay into their pensions at various rates—8.5% of salary
for police officers and firefighters; 5.5% for teachers, state and
municipal workers; and 3% for most judges.
"Once again, the
Christie administration wants to make middle-class retirees pay the
price for the disastrous consequences of reckless speculation and
financial malfeasance on Wall Street, and for the legislature's
continuing failure to fund the pension," said Bob Master, political
director for the New York-area Communications Workers of America.
Mr.
Christie in March signed a slew of pension and benefits changes pushed
by Democrats but said they didn't go far enough. In September, Mr.
Christie unveiled further proposals targeting current workers,
including raising the retirement age to 65, requiring all workers to
contribute 8.5% of their salaries to pensions, and eliminating
cost-of-living increases.
In a statement, state Treasurer Andrew
Sidamon-Eristoff said Thursday, "Unchecked, the cost of this
impossible burden will fall not just on the taxpayers of today, but on
future generations of New Jerseyans."
Average annual pensions
for new retirees as of July 2009 were roughly $39,500 for state
workers, $46,400 for teachers, $73,500 for police officers and
firefighters, and $105,600 for judges.
So who
is right, unions or the Christie administration? At this point, it
doesn't matter. Yes, Wall Street's elite made off like bandits,
squeezing the middle class once again. But Governor Christie, who spoke
with 60 Minutes this past Sunday,
is right when he says public sector workers and retirees will get
little sympathy from private sector workers who saw their 401K plans
implode in 2008. Moreover, with state budgets deep in the red, there is
no money left to pay for public works projects, let alone generous
public pension benefits. All stakeholders need to make concessions or
risk deeper cuts down the road.
If I were the unions, I would
use this as an opportunity to push for better governance at the large state public plans. And by better governance, I mean make sure that
alignment of interests are there. As for state governments, they have
little choice but to raise the retirement age, cut benefits, and
partially or fully remove inflation protection on public sector
pensions. They should also revise their rosy investment assumptions for
state plans.
This may seem unfair and unreasonable to public
sector workers, but to quote a strategist who I spoke with yesterday,
"deleveraging sucks". You can't have pensions apartheid between the
private and public sector. And there are no "irrevocable rights to
benefits". Just look at the mess Greece and Ireland are in right now.
When the money runs out, cuts are guaranteed.
That's one of the reasons why I was disappointed with the meetings at Kananaskis.
A lot of people are looking at politicians with gold plated pensions
asking themselves why couldn't they expand CPP and provide Canadians
with a more secure retirement? I know, the critics will holler:
"it's just another payroll tax". They're wrong and shortsighted and
I'm embarrassed to say this is the best Canada could come up with --
another giveaway to banks and insurance companies. And who's going to
end up bailing out PRPPs when they flop? Who else but Canadian
taxpayers!
There was a time when Canada led the way in terms
of health, education and social economic policy. Our leaders need to
rethink expanding CPP. If you do it right, you'll bolster the private
and public sector. But if you do it wrong, or introduce half-baked
measures, you're better off not doing anything at all. I'm serious, I'd
rather see no change than reforms that are doomed to fail.
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"If you love wealth more than liberty, the tranquility of servitude better than the animating contest of freedom, depart from us in peace. We ask not your counsel nor your arms. Crouch down and lick the hand that feeds you. May your chains rest lightly upon you and may posterity forget that you were our countrymen." [Samuel Adams]
Excellent quote from ol' Sam...here's some other poignant reminders from which we come:
"Bad men cannot make good citizens. A vitiated state of morals, a corrupted public conscience are incompatible with freedom." ~ Patrick Henry
"Associate yourself with men of good quality if you esteem your own reputation for 'tis better to be alone than in bad company...Guard against the impostures of pretended patriotism." ~ George Washington
“Whenever the legislators endeavor to take away and destroy the property of the people, or to reduce them to slavery under arbitrary power, they put themselves into a state of war with the people, who are thereupon absolved from any further obedience.” ~ John Locke
Guess where the last one ended up changing history...
"Do not blame Caesar, blame the people of Rome who have so enthusiastically acclaimed and adored him and rejoiced in their loss of freedom and danced in his path and gave him triumphal processions. ... Blame the people who hail him when he speaks in the Forum of the 'new, wonderful good society' which shall now be Rome's, interpreted to mean 'more money, more ease, more security, more living fatly at the expense of the industrious.'" - Roman statesman Marcus Tullius Cicero (106-43 B.C.)
We (Humanity) have been down this road before.
It's usually a dead end of blood, pain and sorrow. I hope to God we can do better this time.
You all have worn me out. Take my pension. Take my life. But you cannot have my soul.
Again, Merry Christmas to all, and to all, a good night.
"You all have worn me out. Take my pension. Take my life. But you cannot have my soul."
I don't want anything of yours. That's the only difference between us.
You can't tax me to death to honor a contract that was made under fraudulent terms. They didn't put real money aside to honor any of the terms, just another ponzi system (pay as you go) well we ain't got it now...that wasn't me or anyone else here arguing this side of the issue.
And I won't allow the continued theft of my childrens future.
Surely you can see that.
It's going to suck for all of us.
But I do wish you a Merry Christmas...we'll all survive at some level.
Your soul is rented. They are immortal, but you ain't. Trust me.
Now you are getting it. Except it is not the taxpayers who made the promise, and it is not the taxpayers who broke it.
They don't want your soul. All they want is your life and your money in exchange for empty promises.
Have a nice day, and Merry Christmas.
I'm not interested in your life, just your blood lust to redistribute the wealth of FREE men as some sort of justified booty.
There's no justifying EXCESSIVE PAY & BENEFITS in service to your country.
Any system that promised such a thing is FRAUDULENT and soon to be NULL & VOID.
The mistake the Founding Fathers made was not envisioning a godless, immoral time when Emergency Powers would be used to suspend Natural Law *permanently* and reduce *We the Sheeple* to wards of the Nanny State.
You made the mistake of thinking that was the *new normal* when in fact it was a Ponzi scheme to be used as a stepping stone to a New Feudalism.
Because you were greedy, arrogant, and more importantly utterly ignorant of the founding legal system of this country, i.e. UNAMERICAN, you were had!
Good luck with catching the crumbs falling off your masters' tables...
Federalist, I see your point. I honestly do. But try to see it from my younger generation's point of view. I am 33. The deals you brokered were not between me and my elected representatives as you claim. They were made between you and my grandfather's elected representative. I wasn't even born when those promises were made, but somehow you think me and my children have a moral obligation to fund your comfy lifestyle while the bulk of my generation is barely scraping by.
Now you may claim that I have benefitted from the country that your generation has left in place for me and my kids. ummm... yeah... thanks for that.
Some are thinking this conflict is going to be public vs. private, but the real building conflict is intergenerational. By the older generation's reckoning we younger guys are obligated to stick around and pay off the debts of our fathers and grandfathers. Sadly your generation got suckered into a ponzi scheme. You chose to buy into the promises of people YOU elected and you got shafted. Now you think my generation is responsible to make you whole after the scam is revealed for what it is. Not going to happen. As in all ponzis someone gets screwed over. You think that it should be ANYONE but you.
I am a reasonable guy and would be willing to negotiate a decreased pension and benefits schedule that won't impoverish me and my children. But when your generation start threatening and bloviating about how I OWE you because some guy YOU elected BEFORE I WAS EVEN BORN promised you the moon and you won't accept a penny less -- things change. That is threat to my family and to my children. I will not allow my children to be impoverished and enslaved for the naivete and foolishness of your generation.
I fully expect most older people to take Federalist's position. I can see the writing on the wall. Despite my fairly young age I have started and run a fairly successful business that has provided with me a good income. I am in the process of selling it right now. Last week I got all my children passports and my wife and I are in the process of deciding where we are headed. Going Galt y'all.
"By the older generation's reckoning we younger guys are obligated to stick around and pay off the debts of our fathers and grandfathers."
Not all of us sensei.
Alot of us see it for what it is...a generational ponzi perpetrated by statists for their own power & prestige.
As a Boomer, I have a deep sense of shame for not recognizing it and allowing it to go this far. It was by my (and our) own ignorance that it did. None of us (at least me) knew it was this bad until five or ten years ago.
What started the awakening for me? When Bush used bribery for votes in a presidential election (Pills for Seniors). I knew there wasn't a dimes worth of difference between the party's right then. No one was willing to say no we can't afford it and instead appealed to the base instinct of the people to get something for "free" from their countrymen.
That's not leadership...it's pandering.
It really is us against them.
Do what you must for yourself and your family...but I'm staying and fighting it.
Kenny Dart is also trying to escape the great US cauldron with all the loot leaving megatons of styrofoam for your futures.
What I think you don't understand, or refuse to agree with, is that these obligations have always been, and, by their nature, must always be, intergenerational. Just as I have paid, since age 11, into Social Security for millions of folks who took out benefits for decades, you are obligated to pay for those who have built the foundations upon which you stand. You may not think that is a good deal. You may think you did not enter into that bargain. But because government actions are not static and limited to only one generation, ALL generations pay for those who went before them and ALL generations will receive benefits paid for in part by the labors of those who come after them.
Good luck in your expat journey. I hope you follow The Sovereign Man/Simon Black. He always has some great insights and, in his premium service, offers some great information. But I would warn you that in so many of the places where the grass seems greener, what you find is a situation much worse than that we face in the U.S. I wish you well, but don't expect New Zealand, Australia, Canada, Western Europe, Indonesia, or South America to be any better.
When you set forth a position of your family vs. my family, you have declared war--class war--or generational war. You need not do it. But if you choose to do it, you, and I, suffer the consequences. You will watch me kill your children. And I will see you kill mine. In the end, all it sows is hatred and death. There is not need for that.
No, the government-citizen bargain in America has never been a ponzi scheme. The bankers and politicians sure have run their versions of ponzi schemes of late, but that does not relieve the government of its obligations. You see, it is not the government that owes the money. It is the taxpayer. And if the taxpayer reneges, he is a cheat and a thief--an immoral coward who is, in essence, an evil criminal. We cannot dismiss the obligation by saying, "Oh well, those are old folks and I owe them nothing."
At least you are doing the right thing in escaping. You don't like the obligation, get out before you become even more indebted. Those taxpayers you leave behind won't like it, but there is not alot they can do about it. They elected a government that allows you to run in the middle of the night to another country, leaving this one, and its obligations, behind.
Fair winds and following seas.
Face it (wo)man, we've ALL been LIED to!
http://reason.com/blog/2008/10/24/saving-social-security-episode
This is just the tip of the iceberg!
Don't leave, yet.
At the rate things are going, I would think the default is coming sooner than later.
Perhaps once the funds run dry we can build camps for human refuge like Federalist, and then those of us that are producers can go back to the business of living.
It's either that, or total tyranny, so keep those passports handy as there'll be time to tell which way this nightmare is turning...
"Perhaps once the funds run dry we can build camps for human refuge like Federalist, and then those of us that are producers can go back to the business of living."
I can see Federalist now...
http://www.youtube.com/watch?v=bytoID_SNnE
Thank you Federalist for arguing the government pensioner's case in a thoughtful and intelligent way.
I think we can both agree that there is an irrevocable legal obligation to pay certain pensions, lifetime meds etc. and I think that you will be reasonable enough to agree that our judges have a personal interest in upholding the rights to such benefits!
But by extension of your argument these benefits must be paid in full until they cannot be paid at all. Is this fair to the forty somethings and younger cadres? Should we favor an aristocracy of sixty and seventy year olds and risk paying nothing to those that follow?
Is there any level of pension fund solvency (60/40/20% whatever) at which benefits should be scaled back to protect younger employees? Or do they just pay full pensions untiol the money runs out? Is there any level of required municipal pension plan funding (50/100/200% of total tax revenues) at which benefits should be reduced? Should current municipal employees be reduce to just those who collect taxes to fund pension shortfalls?
Lifetime meds and benefits kill in their own way..and way faster than Jack La Lanne's way
In short, the taxpayer owes the pensioner what he earned. Remember, he, too, paid the wages and retirements of both those who went before him and his peers. That was all part of the bargain he struck.
As for younger people, it may not be a good bargain to enter government service. Perhaps government will do away with guaranteed pensions. Perhaps the best workers can get is a private pension. But this will all have to be bargained for in the future. If Pete Jones enters government service under certain conditions, he is entitled to expect the government to abide by those conditions throughout the remainder of the employment.
Should public pensioners agree to take some form of scaled back pension? They probably will be forced to because so many Americans, listening to the loud voices on radio, have been told to believe that the pensioner is the enemy. The pensioner that does is simply trying to salvage pennies on the dollars he earned.
If it were me, I'd retain the Defense Dept, State Dept, Commerce Dept, Transportation Dept, and Justice Department. I'd shitcan the rest of executive branch of the federal government. I'd eliminate the notion of guaranteed pensions and medical benefits for all employees from this date forward. I'd cut individual income taxes in at least half, if not more. I'd reduce capital gains and dividends taxes. I'd eliminate the estate tax. And I would encourage the States to do the same. I'd do all I could to slash spending and lower taxes. I'd reduce the U.S. Code and Code of Fed Regs by half. I'd cut through hundreds of regulations that inhibit business and free enterprise. I'd offer tax incentives to encourage hiring new workers. BUT, I would not break faith with those who I have obligated my government to pay.
Please feel free to persuade Congress and the Senate to ACTUALLY CUT spending so that pensions can be paid (good luck wid dat!)
;-)
Nothing made by man is irrevocable.
ever hear of an irrevocable trust?
Ever hear of the "Finger of God?" In the "Age of Kali", you WILL do as Kali commands!
Can you imagine what will happen to stocks and bonds when the pension plans start to withdraw capital to pay their retirees?
Obviously, pensions are not irrevocable in the sense of being guaranteed against all contingencies.
Russian pensioners found that out when the Soviet Union collapsed, as did Polish and Iraqi pensioners when their countries were invaded.
The US has not quite collapsed, nor been taken over militarily. However, I expect the bankster takeover and pillage to lead to the equivalent of both an invasion and a collapse.
We'll be paid in Chinese wallpaper and better off growing our own.
Yes, yes, yes. . . a thousand times, yes. There is not doubt that this is the sort of evil to which men, and their governments, stoop when they decide to cheat and steal from their citizens. But that does not let them off the hook morally. Indeed, it plants them squarely in Satan's camp.
" I'm embarrassed to say this is the best Canada could come up with --"
Until You Get Rid of The Queens Bitch Harper...
Can you explain to me the totalitarian move by Queenie that suspended Parliament and kept that douche bag, neo-con man, warmonger and reactionary corporate tool Harper in power?
Harper is Canada's version of the Puppet of Wall Street Obummer...
You can argue this shit all day long,
but I know what I see. Nobody is paying
the pensioners in bankrupt Prichard, Alabama a dime of their pensions.....not the city, state or the feds. When the money isn't there,
there's nothing to wrangle over but the legalities, and gee, the money still DOESN'T appear, because there isn't any money.
Fascinatin', isn't it?
No argument. I owe you the
money and have a moral obligation
to pay. But I'm just pointing out the icy reality of
Prichard. They totally comprehend the
debt and moral obligation, but since
they are broke, they don't pay a dime.
Net result: You, the pensioner, starve. So what is
your moral obligation worth? Zero.
I oink that!! Thank you Pigman for kicking the shit out of the obvious! ;)
You can always go to court and win a judgement against
someone who owes you money. The problem
is that you can't collect what he doesn't have.
Have you read any of this thread besides bits and pieces that suit your mental framework? Yes, if the government that owes the pension goes belly up, the pensioner is not going to get his money. BUT THE FACT REMAINS, THE TAXPAYER, THE GOVERNMENT, YOU, AND ME, OWE THE MONEY. We are morally obligated to pay. And if order is restored following a widespread government collapse, then any restored government should meet the obligation.
Does anyone remember what happened when, in the Early Republic, the government tried to shortchange the soldiers of the Continental Army? How about the soldiers camping on the Washington Mall? Blood was shed, folks. Blood, in our times, will be shed if the government fails to make good on its obligations.
No argument. I owe you the
money and have a moral obligation
to pay. But I'm just pointing out the icy reality of
Prichard. They totally comprehend the
debt and moral obligation, but since
they are broke, they don't pay a dime.
Net result: You, the pensioner, starve. So what is
your moral obligation worth? Zero.
What is the Bid on Moral Obligations on the F-I trading floor of the largest-ever corporate beneficiary of the US Government and its politically-reamed by corporate enablers?
Actually, our conveniently 3-layered (fed-state-local) government is NOT financially "broke".
It is just that priority is given to wars, bankster largesse, and elitist tax breaks, all over elderly pensions.
I wish people would stop defending those moral choices with a false cover of "icy reality".
It is icy in the sense of heartless, but it is not "reality" in the sense of being the only social option.
- and yes, a few corrupt politicians and their flunkeys have made off with exorbitant pensions which should be cut back, but most of the pensioners public, private, or SocSec, are not so well off.
Precisely, assuming that the taxpayer chooses to default on his obligation, and assuming we are speaking only of the financial aspect of the matter. But we are talking about more than money here. We are talking about the our very souls. The moral obligation comes into play only if the taxpayer cares about his soul.
Souls?
OMFG you jack-booted statists actually believe you're doing god's work, don't you?
Who the fuck are you to talk about souls when you and your thuggish brethren sold-out EVERYTHING to serve your elite masters' dreams of tyrannical empire?
You represent the soulless scourge that has eviscerated the greatest example of a free society in the history of mankind!
Perhaps you get it now. You can
actually starve while waiting to collect your righful debts
and moral obligations. Right out of
Dickens....(or Prichard, Alabama.)
Question: How many loaves of bread does moral obligation buy a city pensioner at the Piggly Wiggly in Prichard, Alabama?
Answer: Zero
Yeah, but at least he starves to death knowing he was in the right!
There's a lot of talk here that comes down to, "It's just not fair." And it's not.
Also, the sun came up this morning too. Since I live in the Northwest, I couldn't see it. But it's also true.
Whether our pension benefits (if any) were part of an agreement with private industry, the public sector or gang lords, the truth is that we're all going to stew in the same pot. All of the pension money is invested somewhere in the macro economy. Maybe shares in the company we worked for, or bonds, ETFs or narcotics. If it has value, it's a target for those fine folks we have allowed to be in charge.
Fact is, it's all, as I type this, being siphoned off while we sit in the same soup. It matters little where it originally came from. Whether you're a carrot, stick of celery or a chunk of beef, you're soaking in the same pool as the rest of us. Some of us have really nice promises for our share, other promises seem less likely to be honored. But none of us should expect to see more than pennies on the dollar when the final payouts are issued. It's gone.
When they decide how much more water to throw into our pension soup to make it go further, grab your life preserver!
AGAIN, I don't disagree that we are all going to end up in the same pot--either chaos or tyranny--but I do disagree about the SHOULD. Again, it is a matter of moral obligation on the part of the taxpayer when it comes to government pensions. It is not so in the case of private sector pensions. It is a matter of principle. It is morally wrong--indeed, EVIL--for the taxpayer to deliberately and hatefully try to steal this money from the pensioner. That is happens may be reality, but still it is not morally right.
And it has nothing to do with "fairness." It has to do with honesty and integrity. When the American people decide to cheat and steal from those they promised to pay, then they have lost not just their liberty, they have lost their souls.
That is pure bullshit. There is no moral obligation - none. And there is no hate, but I am sure it can be arranged.
Nobody is cheating, nobody is stealing. We are only doing what we are hardwired to do - protect ourselves and our families. When you reach in and take the food from my child's hand to put it into your mouth, prepare to pay dearly.
I would suggest that the greater immorality is foisting the obligation to pay for ill conceived pension plans upon the young and unborn. It's a shame that well meaning individuals such as yourself bought into a promise that cannot be honoured. Sorry. It ain't going to happen. There is no guarantee on anything, especially when the numbers are projected out decades in advance. To believe otherwise was naive.
Federalist, I agree with you completely.
Wake up, folks. Divide and conquer only benefits the oligarchs. United we stand and all that rot.
The thugs work for the oligarchs.
A freedom minded AMERICAN that wishes to restore the NATURAL RULE OF LAW (Enshrined in the Declaration of Independence) has NOTHING in common with these violent parasites, PERIOD.
Then again, I doubt you could seriously comprehend a word I just wrote, but don't feel bad, neither could 99.99% of 'MeRiKans...
High Plains Drifter:
I can sympathize with your statements.
I am only telling you how the states and federal government views their "liabilities."
I can back those statements up with objective governmental excerpts and links.
Many states and localities have taken advantage of the system, in that the taxpayers can always bail them out.
State Governments tend to look at themselves as "eternal corporations," that last forever.
The same can be said of the federal government.
This type of thinking leads to overpromising today, and to heck with tomorrow.
Many people on blogs, apparently very intelligent economists, believe the fiat currency and the dollar being the world's reserve means, in effect, we will never go bankrupt. That we have an infinite supply of dollars.
Well, to them I would say that the "full faith and credit" of government is what is backing the dollar. And, that full faith and credit is the perception seen by the masses, not the 1% of people who think we have an infinite supply of dollars. People look at governments the only way they can, like gigantic households and businesses. Yes, they can be given some slack over private entities.
But, there are 2 things I believe.
There is a God, and it is not the U.S. (or state) government.
Don Levit
It's all too easy to spend FRNs that are not your own!
When these corporations declare bankruptcy , it is the nature of the business , that everyojne takes a hit, including these pensioners who had the idea that the cherry tree would always have fruit on it. Well we are at the end of fiat now so the party is over. Now federalist45 talks to us about contracts and the rule of law. Give me a break already. It is he who is making sideways threats that if they don't get what they think they have coming to them, that they might come after it. Well to quote Dirty Harry, Make my day. I promise you there will no more New Orleans routines accomplished, where cops are invading people's homes without reason and wrestling old ladies to the ground in order to take their guns away from them. Those days are over pal. Besides Don we are in the days of the agency and the corporation. These states and these cities etc, they are the ones that made these stupid contractual agreements, not the people. There is no common law now and there is no rule of law now. Under laws of agency, they need to go string up the officials that they feel wronged them and quit worrying about coming to the well for more water. The well is dry and the people have run out of patience with these pricks.