States in Peril Must Cut to the Bone?

Leo Kolivakis's picture

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sudzee's picture

I don't at all, at this time, appreciate the greedy, lazy, overpaid freeloading public sector unions just like most of us on this site.

I will though appreciate them when the rioting in the streets begins. I have always beleived that it is they, who have everything to loose, will be maning the front row of demonstators. Promised a retirement of ease for mearly showing up for a meaninless "job" for 20 or so years.

Thirty million strong including 2 million trained and armed cops, about to loose their cushy retirement dreams, will be a force to be reckoned with.

I wish them luck. May they find happiness in finally doing something productive for the taxpayers they have been financially rapping for all of their none working lives.  

dxj's picture

It will be the unemployed public sector doing the rioting. That sense of entitlement goes deep. They certainly haven't given a damn (up to now) what is happeing to the private sector. The cops will have more important things to do than answer your frantic 911 call  as the angry/hungry horde come to loot.

The Alarmist's picture

Dude, who do you think will be doing the rioting? There will be a few cops there, but it will be teachers, bureaucrats and other public-sector union members on the other side of the shields, and the "enforcement" you will see from the "forces of good" will be tepid at best.  Al theatre to shake a few more protection-dollars out of your next paycheck.

 

Tic tock's picture

It makes no sense - States are pretty huge - if they simply created their own state coporations to provide themselves with the goods they need, like paving, books, pencils, they could save billions in costs. It wouldn't be deflationary, even though the prices of goods would go down.

The real problem is food and utilities inflation v. wage deflation. If the states want to handle a transition in absolute terms to a lower pension pot, then quid pro quo, they require deflation in those prices. The states badly need to improvise agricultural projects and some sort of in-state energy supply. 

The Alarmist's picture

You obviously have never used a government-issue Skilcraft pen ....

 

Watauga's picture

The "pension wedge" is the greatest propaganda tool the political/financial/cultural elite have at their disposal to finally crush America's Middle Class/Working Class.  First, they create pension plans in an ever-expanding government (at all levels), then they create the wedge by destroying the economy/jobs while boosting government spending (at all levels), then they tell the angry jobless how government employees are the root of the problem. . .   Pretty easy to see that all of your attacks on the government employee and his pension are playing right into their hands.  Perhaps the discussion should not be against one another, but should be about which "leaders" we elect to office?

nmewn's picture

I will say again Leo.

They will shrink government, cut taxes and allow the people to prosper one way or the other.

And yes, some amputations will be involved.

Where was the hand wringing by public sector workers and their unions when the private sector was being destroyed?

I'll tell you Leo...they were chanting gimme gimme gimme.

http://www.paceadvantage.com/forum/showthread.php?t=69326

Look at the money that could have been saved just on T-shirts and signs alone...not to mention the massive "carbon footprint" of busing these people around for photo ops...LOL.

Seasmoke's picture

nice to see a horse racing guy here

Gromit's picture

Simple solution really.

For funded programs calculate shortfall on a sensible actuarial basis (maybe 30 year bond yield rather than 8% whatever) then reduce all benefits by percentage of shortfall. 

For unfunded programs use same percentage. 

There is no fundamental problem with the concept of a defined benefit pension - so long as the benefits are not higher than incoming payments can sustain.

dxj's picture

"Simple solution really ..."  What you're advocating is not a defined benefit program, but one that pays out according to the assets available. This is more like a 401K, which the rest of us mooks in the private sector live with.

Zero Govt's picture

 

All these angry people in the US who attack public employees and their "generous benefits" should ask themselves what will happen to their vital services when states cut to the bone.

Answer: Nothing. Nothing will happen. Life will go on as normal free of the feeding, snorting pigs of society, the public sector. Go to any US town where the Govt has gone bankrupt and these "vital" services (police, education, firemen etc) have all been laid off. Life goes on better than normal, free of the States expensive, tawdry, wasteful calamity clown show.

Anything the Govt supplies is 2nd or 3rd rate dross. Let the free competitive market supply it, it could hardly do worse, it will without shadow of a doubt be much (much) better. 

 

johnQpublic's picture

zero govt, you are correct sir

 

up at my 'camp'  there is a volunteer fire department, and there are two paid "govt" employees

they also collect the garbage, and do the snow plowing

no police

no crime(that i've seen)

and a single room post office with one woman working there

taxes are way up...almost 50% in last 8 years....now stand at 300/yr property and school combined

the average income is 22k a year

very mellow,relaxed,happy place with zero crime

5 street lights(one of 'em is broken going on ten years now)

35 miles to nearest wal-mart so local businesses get all the business

co-op electric....my bill is 16-35 bucks a month and i have electric everything, no gas or propane, but i have a wood burner. and electric heat backup

the less government, the lower the cost of living

its in the largest county in new york state

our local government officials are UNPAID

they do the job as a public service

as far as i know , there is only a town supervisor and a building inspector

once again...

the less government, the lower the cost of living

mad props to charlie-johns grocery,stephensons lumber, and all the other little businesses who keep prices low, and provide much better service than anywhere else i've ever shopped

and thanks to the building inspector who certified my foundation work by phone

and Dawn who let me use her phone, and Harry for throwing the best damn parties i've ever stumbled home from down the middle of the road

sethstorm's picture

All the junk and shoddy services that's come from Third World countries provide a nice counter-example. 

Government provides scale and uniformly applied service where the private sector won't.  Try that in anything more than a small town, and chaos happens - just not that the kind of chaos that you may prefer.

10kby2k's picture

Unions built this country and now unions are destoying it.

Freddie's picture

No Leo there is no give and take.  Cut cut cut.  Thank liberalism for causing the state bankruptcies.  Odd how all these little leftist like Leo, "George Washington" never mention their union heroes or their idol Obama.

Triggernometry's picture

I guess your selective memory overlooked the fact it was "conservatives" who came up with the idea od "starve the beast." For the record, I'm no "liberal," I'm just frequently disgusted to hear people gush about Reagan when they have no clue as to the extent of damage done to our country under his watch.

Btw, I didn't junk you but I can see how somebody felt it was deserved.

plata pura's picture

End corporate personhood!

Triggernometry's picture

Bingo! Then we might not need unions.

Thalamus's picture

Stop the unions...stop organized crime!  Kill two birds with one stone.  

sethstorm's picture

Except that you create more thuggery due to cutting only part of of the organized crime.  Killing unions won't stop organized crime, it'll only move it to more acceptable settings.

 

 

SoccerDad's picture

I, for one, would like to finally see the States cut to the bone.  Government has gotten so big and out of control, I don't even think we know what services are 'vital' anymore.  If forced to cut to the bone, at least we would find that equilibrium between what's vital and the minimum revenue required from tax payers.   If, tax payers don't like the cost/benefit of those services and feel they aren't receiving vital services then, they should move to a more rural location where a more realistic definition of 'vital services' can be learned, while there they may actually also learn to produce more than they consume and save more than they spend.

KickIce's picture

Our government:  Aligator mouth / hummingbird ass.

Promise, promise promise...

 

The line from Top Gun comes to mind as well....

Son, your ego is writing checks that your body can't cash.

boeing747's picture

Boomers suffered too. Life time savings earned 0.25 cent because of Ben. SSI can not catch up real CPI. Higher property tax will hit them hard because every one of them has a house or two. States cut budgets mean less money for MedCal and home cares.

KickIce's picture

The elderly/poor have suffered for years as we've deflated the value of the currency to keep the ponzi scheme alive.

topcallingtroll's picture

States should be allowed to go bankrupt. Why should younger workers have higher taxes fewer benefits and worse retirement plans than baby boomers? The baby boomers arent willing to sacrifice anything as they engage in the largest intergenerational transfer of wealth in history. Shameful and greedy. The boomer generation will be remembered as the selfish entitled generation. The retirement age is being raised for everyone who is not a boomer.

The Alarmist's picture

Why have the slaves and serfs toiled for millenia to build monuments and palaces for the kings and their vassals, keeping them in lifestyles far better than anything the slaves and serfs would themselves ever enjoy?

It's the natural way of man. 

Back to your work, serf! Your lords and masters must enjoy the comfort that the almighty himself has ordained to them.

 

Lord Koos's picture

You mean like the 60,000 boomers who died in Vietnam before their 30th birtdhday?  Yeah they didn't sacrifice too much.  Younger people have no idea what it was like to have a military draft.

Stop scapegoating the boomers, it's just more divisive bullshit.  Boomers worked all their lives, paid taxes (higher than anyone in the middle class is paying today), paid into social security, and now as they near retirement, the pensions are gone, there 401ks & IRAs in the stock marker are are being manipulated by fraudsters, politicians want to take away SS benefits that they already paid for, and the value of their homes has plummetted. And what makes you think that millions of boomers aren't going to have to work until they die of old age?

Huck T's picture

Nah - no idea what a draft was like.  Or how to avoid it - and then get elected by pretending how bad ass you are when it comes to "defense."  Maybe if more Boomers had enlisted, rather than figuring out ways to avoid it, they'd have won in Indochina. 

Maybe if more Boomers had embraced integration, rather than white flight, the country wouldn't be as badly split along racial lines.

Maybe if more Boomers had engaged in responsible politics, rather than the cultural wars, they wouldn't be taking it in the kiester from the pols they voted in again and again and again.  No - a lifetime of immaturity... and now they're out dressing up like the Founding fucking Fathers! 

Maybe if more Boomers had stayed married and raised their kids, instead of going off to "find themselves," their offspring might be willing to take them in and feed them something more than catfood.

Maybe if the Boomers hadn't wanted to retire at fifty and live to be a hundred, they wouldn't have let themselves get taken in by notions of 10% annual home appreciation and house-flipping.

Do you see what happens?  This is what happens.

Of course, you gotta look at the folks who raised up these these whiners.  Makes me wonder how great the so-called Greatest Generation really was...

 

 

   

 

 

Watauga's picture

You haven't a clue, child.

"Youth is wasted on the young."

nmewn's picture

Where's your pitchfork kid?...is there an app for that?...LOL.

Freddie's picture

+1

However the young voted in large numbers for the Islamic messiah - who doubled the debt in 18 months.  I guess if they have the latest iGadget then all is well.

Trifecta Man's picture

Meredith Whitney will be vindicated soon enough.

Zero Govt's picture

Meredith is counting the beans, or lack thereof. What needs to be addressed more fundamentally is the system that brings about this insolvent clown show called "democratic Govt" ....it always fails so time for a big systemic change this time  

RoRoTrader's picture

The probability that the following from Yves Smith's, naked capitalism is the model of what is to come as part of the social/economic paradigm shift which is surrepticiously already underway.......imho.

UK About To Impliment Massive Tax Breaks For Banks; Is The US Far Behind?

http://www.nakedcapitalism.com/2011/02/uk-about-to-implement-massive-tax...