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The Coming Era Of Pension Poverty
Submitted by Charles Hugh-Smith of OfTwoMinds blog,
Assuming "growth" will fund all promised pensions and entitlements is magical thinking.
The core problem with pension plans is that the promises were issued without regard for the revenues needed to pay the promises. Lulled by 60 years of global growth since 1945, those in charge of entitlements and publicly funded pensions assumed that "growth"--of GDP, tax revenues, employment and everything else--would always rise faster than the costs of the promised pensions and entitlements.
But due to demographics and a structurally stagnant economy, entitlements and pension costs are rising at a much faster rate than the revenues needed to pay the promised benefits. Two charts (courtesy of Market Daily Briefing) tell the demographic story:
As the 60+ million baby Boom began qualifying for Social Security and Medicare entitlements, the percentage of beneficiaries rose quickly from a decades-long level of about 16% of the total population to 18.5%. This might seem like much, but what's troubling is the steep rise in the number of beneficiaries while the number of full-time workers who pay the vast majority of the income taxes has remained stagnant:
Federal social spending (entitlements) has almost tripled from 5% of GDP to 14% while federal tax revenues/spending have remained range-bound as a percentage of GDP. In other words, social spending is soaring as a percentage of the economy (GDP) while revenues to support that spending are limited by the slow-growing economy and the correlation between high tax rates and recessions.
The other structural headwind is low investment returns in a zero-interest rate global economy. The only way to increase yields is to take on more risk, a strategy that has potentially catastrophic consequences: Pension Funds Are "Compromising Their Solvency" OECD Warns.
Any criticism of rapidly rising public pension costs quickly draws accusations of union-bashing, a favored propaganda technique to divert investigation of blatant abuse of the system. Since I have cousins who have retired from California police and firefighter jobs, I know all the insider games and tricks that many public employees can use to boost their pensions and benefits.
The issue isn't unions, it's the systemic abuse of public trust and public funds.
Buying political influence with campaign contributions doesn't mean promised public-employee pensions and benefits will align with tax revenues and yields on pension funds. The global economy is due for a recession and an extended period of slow growth/stagnation as the Great Deleveraging of credit/asset bubbles strips away phantom collateral and pops all the bubbles. This global deleveraging will occur whether we like it or not, and refusing to consider massive losses in pension-fund owned assets and declining tax revenues will only lead to greater fiscal imbalances/crises down the road.
The usual excuse for insider abuse is "everybody does it." What this means is "everybody on the public payroll who can get away with it does it." The private sector doesn't offer tricks like doubling your overtime in your last year of service to plump up your pension, or getting cashed out of your sick leave and unused vacation time to the tune of hundreds of thousands of dollars:
Ex-Transit Agency boss tops SF list with half-million payout
sick leave policy can pad healthy paycheck
In the real world, these benefits vanish if you don't use them within the allotted time.
Promises made in flush times cannot be kept in lean times. Common sense suggests that public employee pension benefits should be tied to the revenues required to pay them and the rate of low-risk returns on pension funds. If common-sense is "union bashing," then we not only have a pension-funding problem, we have a propaganda problem.
Regardless of what was promised, what can't be paid won't be paid. The federal government can print money, but state and local governments cannot print money to pay soaring pension and healthcare costs. Push taxes and junk fees up enough and you will spark a taxpayer rebellion. If you doubt this, check out the origins of Prop 13 limits on property taxes in California.
I have suggested that the federal government eliminate the Social Security payroll tax and just print the money for Social Security pensions: How About Ending Social Security and Paying Retirees with Cash? (November 15, 2013)
The reason why this is practical is the Social Security system is not open-ended like Medicare; costs can be fairly accurately predicted, and SSA pensions are limited. In a deflationary $17 trillion economy, printing $1 trillion and distributing it to tens of millions of beneficiaries, most of whom paid SSA payroll taxes for decades, would not be enough to spark systemic inflation. (The Federal Reserve, so desperate to generate inflation, should jump on the prospect of goosing some mild inflation via broad-based spending by tens of millions of households.)
Assuming "growth" will fund all promised pensions and entitlements is magical thinking. We're going to have to do better than indulge our Spoiled Brat Economy mindset because "we wuz promised." What we were promised based on faulty assumptions, faulty projections and wishful thinking no longer matters.
Gordon T. Long and I discuss these systemic issues in a video program:
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Last to go will be law enforcement pensions.
Teachers go first.
My brothers are teachers and I hear them bitch about their pensions not being met. I said, what do you think happened to all those people who don't have pensions and put their money into 401ks? When the market goes down, so does your retirement. What makes Pensioners think the same rules don't apply to them? Nothing is guaranteed, even if you have a socialist government job.
If they have paid into a pension for forty years, then they are entitled to their share of the pot.
It isn't really welfare.
Unfortunately, when "growth" goes negative, possession is 10/10ths of the reality. The 'law' doesn't matter, recall the GM bondholders or the owners of accounts at Lindt & Waldock.
Now making the long predicted transition to a smash & grab economy. . . . . .
If they have paid into a pension for forty years, then they are entitled to their share of the pot
Ill remember that quote when they means test me and deny my SSI benefits some day....
"That which cannot be sustained, won't"
serf, 2015
...Soon enough, grandparents will have to start sharing basements along with their university graduate grandchildren.
Three generations living together in one household....everywhere across the planet.
Unless the Dee-troit art collection is at stake. If it is, then it's time to fuck the pensioners. 'Cuz the 1%ers dont want their tax-deductible art donations to end up going to the highest bidder @ an auction whose purpose is to raise funds for pensioners following a muni default.
I realized back in the 80's when Congress had the realization that there was a serious problem in social security, were motivated to investigate, and decided to throw up their hands and make-pretend, that I would not be seeing my expected benefits when it was time for me to retire. I figured back then that I'd be worked to death.
The problem is that the politicians lied to get re-elected and the public went along with it because they believe in a free lunch and purple unicorns shitting skittles.
So who is guilt?
https://www.youtube.com/watch?v=rOoyvUHB_PM
duplicate, sorry.
The "public" (the sheep) believe what they're told by those for whom they voted and liars on tv.
Voting districts put up candidates who serve whatever special interests want a representative in congress. Congress represents only the special interests, not the voters.
This is a system that has evolved (faster after the advent of tv), not one that we voted for.
When do political candidates and politicians lie? (Hint, are their lips moving?)
You'll be paid your $1800/month benefit. . . which should be enough for several Happy Meals.
Duped.
Why is it that some of us choose to tune into the realitity of our predicament while the majority seem to successfully tune it out?
The federal gov will "save" the local law enforcment providers and pensioners by Federalizing local law enforcement and bringing them under the Federal umbrella.
City politicians, who have made patronage promises out of their ass for decades, will concede to the Federal govt the local political power as represented by the unions in order to live another day in paradise and "save" the city.
The DOJ has been working hard on federalizing local law enforcement under Holder, with the help of an array of race hustling useful idiots of the left, from Sharpton to La Raza. The federales are backed by sovereign debt issuance backed by sovereign fiat jssuance, and the shittiest democrat localities are ripe with social decay, borderline insolvency, and corruption. They are all for federalisation and are acting in concert with treasonous fucks at the DOJ to help gin up and amplify events to bring it about. These precedents will set in and be the precedent for full federalization. He who pays the piper calls the tune.
You really think that the pension shuffling in the mid 90's didn't touch the military or police pensions? They are all in the same pot, have been for a while. Why do you think the tag line to this financial misadventure has been 'too big to fail'? Because if it does, everyone goes down on the same fiat ship.
Here's the background: In the 1990's the entire pension savings system got an overhaul. The Introduction of saving funds, CD's, RIF's, RRSP's and all the tax planning stuff came out. It had nothing to do with giving people options, it had everything to do with breaking a public pension systems that was surrounded by financial firewalls, laws and red tape. How to get around them, you make a trojan horse called IPP's (Individual Pension Plans). The brick of laws that were signed under the aspicious idea that having more than two functioning pension systems running was 'for the best of everyone'. It was coordinated from Japan to Europe in the same timeframe in the early 1990's that the tens of thousands of little buckets of pension money would be consolidated under one massive pot with earmarks. This situation is a direct reflection of the idea of 'infinite growth' of those choices made.
When places like the Ontario teachers union is waving a red flag, that's not a red flag for the teachers. That's a red flag to the subscribers to the OTPP that pay them to manage their funds. Who are those subscribers? Nearly everyone because they all follow each other blindly around the financially landscape as behemoth investment groups. When one group is stating they are bleeding money all over the place. It means they are all screwed. Throw in poorly masked real inflation in combination with the martengale system of pension system management methods that are being used. Given enough time no one will have a pot to piss in.
They used to use urine to tan animal skins, so families used to all pee in a pot & then once a day it was taken & Sold to the tannery…….if you had to do this to survive you were “Piss Poor”
But worse than that were the really poor folk who couldn’t even afford to buy a pot……they “didn’t have a pot to piss in” & were the lowest of the low. I always love telling this to my son when he asks for money... "Dad!!! Not the piss story!!! jeeez
Thats fucking hilarious BB!
I'm gonna use this on my nieces and nephews on the 4th during poetry and story telling session....
"Last to go will be law enforcement pensions."
Not if our brave men and women in the military stand ready to resume the beatings in their abscence.
The reason I stopped you sir, is that your tail light isn't working.
Now if you'd be interested in making a minimum $200 cash donation to the Police Retirement Fund right here and now, we won't have to get the paramedics involved.
"just print the money for Social Security pensions:"
Yep, worked for WS Banksters.
In fact, printing should replace taxes, too.
If inflation is ever admitted to, the argument can be it is "an allocated, focused tax system".
They are doing that now, but nobody wants to admit it.....
My father broke his back working for CLE union, and they just took a 1/3rd from his pension this May. Add to that they have sent him a letter letting him know he will get an additional letter to let him know how long the rest of his pension is guaranteed for. That's fucked up!
The concept of a profit seeking business ever acting in any way except from their own pure self interest is just not going to ever work. Same with insurance companies.
They cannot change their stripes. Making money is what they do, there are no rules that will ever be able to restrict that. We should just admit it, not believe otherwise and make decisions accordingly.
Well did he notice the union goons are thugs and they consort with or are members of organized crime. Not unlike Wall Street, ConGresZ and SCrOTUS.
...Death Panels
fixed
No, no, no, That's called alternate retirement planning......
OMG! Control the narrative to control the sheeple. Stupid euphemisms & catch phrases. "Right sized" We right sized some schools here. Bullpucky, they closed two schools & crammed all the kids into another school.
When your government lies routinely about inflation, you know your pensions will keep you firmly in poverty:
Chapwood Index shows real inflation in US.
In 2014, it was 9.7% - 1212% of official US inflation (0.8%)
http://www.chapwoodindex.com/
The Chapwood Index reflects the true cost-of-living increase in America. Updated and released twice a year, it reports the unadjusted actual cost and price fluctuation of the top 500 items on which Americans spend their after-tax dollars in the 50 largest cities in the nation.
The gooberment just wants to encourage you to steal better during your working days. The pension is just a bonus. The icing on the cake.
I am in my 40s and plan on working into my 70s. If I drop dead before that...well...that will change my calculation.
I do not mind working and am certainly not expecting a pension. I will just buy up some shit as I go and give it to my wife and kid so that they will have something when I kick the bucket. The house is paid for and the car is paid for an there is no debt. Not sure there is much more a person can do. Just enjoy what you got and deal with the bullshit I suppose.
You have done a great service to your family. I don't even dream about social security or solvent retirement funds, but I rationalize that I'm paying in what my retired Dad takes out- my lump of sugar.
I'll work until I drop. I don't see another way.
A dear friend of mine told me just today: live every day, but return to the mirror at the end of the day. If you can look that image in the eyes and state "I have done the very best that I could do today", then you have done your part.
Yours is a testament to family first and their tomorrow. Philo Beddoe, there is honor to be found in that. +1 x 107.62
I plan on working till I am 70. I hope to live ten years beyond that without having to greet people at Walmart. I don't know what kind of cuts to benefits my union pension plan will enact, but I doubt any of us will get through the next 20 years without some haircutting. I hope to leave my own family with a paid for house and no debt. But I am not there yet. My father, on the other hand, inherited $800K from his parents, and is living on that plus a reverse mortgage. He has no intention of leaving anything to anyone. He doesn't like to talk politics or consider the conspiratorial angle like I do. One of his favorite films is "The Secret". Magical thinking helps when you are insulated from economic reality by an $800K buffer.
Long dog food.
Fuck your pensions, bitches!
Lamb and Rice from Costco isn't that bad
Have you seen the price of petfood ?
Fried cockroaches is whats for dinner, or soyalent green..
Cat food is more expensive than the cheapest tuna, so we went that route.
Elderly eating "Stewed Tomatoes in a tin."
[see movie _State of Grace_ starring Sean Penn]
Eatin' beans is just as effective as eatin' lightnin'.
Social Security is in deep trouble, but pension funds are a huge disaster. This is can kicking taken to a whole new level and CalPers etal collapse will be truly awesome in a giant trainwreck sort of way.......
This will be the ultimate revenge of the Millenials - they will still be employable after the crash and re-set -- but granny is going to be in trouble.
C'mon granny, let's walk to the edge of the iceberg.
http://www.gettyimages.co.uk/detail/news-photo/eskimos-ending-an-elderly...
That is fucked up. Pretty sure it is a real account. Chilling!
"Chilling!"
Ahhhhhh... You cheeky bastard!
Very real, but basic survival required it. Of course nothing like that could EVER happen here......
Dont worry, there will be a FEMA camp to take your grandparents to for "care". And those smokestacks are merely the heaters used to keep them warm . . .
Cremation would be a waste of valuable soylent green.
Euthanizing a generation of grandparents/great-grandparents will hardly be a prize.
But you are correct. 40 years after the Big Cull the pain will be gone. People will be happy again and reproduce and make Anime and go to music festivals.
i had a gf once who called me pookkie
Logan's Run.
Speaking of CALPERS , the country's biggest public pension fund, the 7.5% growth target this year was missed by 4.5% !
http://www.latimes.com/business/la-fi-calpers-return-rate-20150626-story.html
Who says faulty projections and assumption? Maybe the guys running the pension funds had faulty projections - but the guys running the Fed got this right on for a change -- ZIRP for all -- including pensions.
in Colorado when things weregood..the politicians increased pensions 10% or more...of course they get them too...now they are going broke of course and they want it all....
Former civil servants and officers are undoubtedly the poorest of the poor in Austria today. They
are too proud to press their claims, can get no employment. Thus it happens every day, again and
again, that elderly, retired officials of high rank collapse on the streets of Vienna from hunger.
When Money Dies: The Nightmare of the
Weimar Collapse
I have suggested that the federal government eliminate the Social Security payroll tax and just print the money for Social Security pensions
I'm surprised no one has jumped on this line yet.
This line of BS has been whispered in all the cops ears. The other line is if we must we will just raise taxes to cover it. That might be why they like them math challenged.
That is exactly what they are going to do...those so called IOUs are just that...there is no lock box for SS...just the feds printing it up as they go..Congress spent it all..and they have no extra cash to pay it back...so print they do...
Works for me, since they way things are going, I won't see a dime from that SS deduction that gets sucked outta my paycheck. Might as well eliminate the Fed tax too and go to a national sales tax.
SS disability is a fuck show as 1/2 of them are scamming so eliminate that too. Fuck it.
Zirp. Ya that pension is toast. Rehypothocated multiple times? My guess is they are zombies now.
I personally HATE teachers. FUCK THE TEACHERS.
They are propaganda peddlers in US Madrassa's.
They can take their common core math and live off that !!
"1 + 1 = Whatever the authorities say it is."
"FDR saved the nation with his {J,N}ew Deal policies."
"You're only in preskool, but you need to know safe kondom practices."
Any questions, class?
p.s. people don't want to be told they are programmed outputs of a factory.
The same folks that 'wuz promised' paid into SS for 50+ years. That money could have been used to fund their own private plan....so hell yes they'll be pissed and rightly so.
The tragedy is that everyone will get their full pension...it just won't buy much....it was always the plan...it worked perfectly in 1920 in the Weimar. Every widow got a check each month. In 1919 it paid the rent, but by 1923 it would not buy a stamp.
All obligations were kept and the widows quietly accepted their fate.
Others were not so sanguine and raided local farms cutting the udders off cows to spite farmers who were 'withholding food from the market'.
We are a much better people I'm certain.
Narrator: Bob is dead, they shot him in the head!
Tyler Durden: You wanna make an omelet, you gotta break some eggs.
https://www.numbersusa.com/content/resources/video/educational/immigration-world-poverty-and-gumballs-updated-2010.html
To help our grandkids and great grandkids, close the borders.
https://www.numbersusa.com/problems
As usual OfTwoDimMinds does not understand simple economics. The problem with Social Security is its funding mechanism. In an era of declining wages but staggering productivity gains, Social Security should be funded by a special tax on sales to capture all the productivity gains that workers produce yet are not captured in wages.
FICA tax is an anachronism: the number of employees working compared to number of retirees is irrelevant. What matters are the economic gains received by the corporations that are not taxed by FICA payroll.
Dr Bartlett RIP. https://www.youtube.com/watch?v=LqcHG7QUK9k
Not bad, but I prefer Professor Julius Sumner Miller
https://www.youtube.com/watch?v=4wzSKEruj70
or this guy:
https://www.youtube.com/watch?v=pWMpHc77qNI
"Yoo ged han F"
Dood I want the car launcher!
Fortunately, beans are still cheap and need only water to prepare. We are all Beaners, now.
"Beaners"
CHEECH AND CHONG- MEXICAN AMERICANS *HQ* https://www.youtube.com/watch?v=LLqqZmNFa_AEvery single day that a defined benefit plan of government is in place is a continuing fraud on someone - either the beneficiary (who won't get their "entitlement"), the taxpayer (who will be on the hook to fund it) or both.
I think we can do even better than that.....how about charging no federal income tax at all for one year....(finance federal expenditure by borrowing at close to zero rate)??....
Thios will spur a huge economic growth and hiring....
Anyway-we are borrowing so much so might as well do something bold........
"something bold"
War w/Russia.
The current SS tax rate of 6.2% only hits the first $118,500 of earnings. About $7000. If a person gets paid a million dollars he still pays the same $7000 in SS taxes. If they eliminated the cap, such a person would pay $70K in SS withholding. Gee, I wonder how badly that would hurt the lavish lifestyle of someone earning a million dollars? It would also address the SS issue in one swell swoop. (but it would be tough to get by a Congress owned by the wealthy).
Btw, the $70K could be about the same total that 25-30 moderate income wage earners pay in SS taxes. I mean, isn't the whole point to expand incoming contributions due to the changing demograhics leading to more being paid out?
Getting rid of the cap will never happen unless you vote into CONgress average wage earners. It's perceived as a tax on the rich...and CONgress is full of rich people. And as you correctly state, OWNED by even richer people.
Social Security wasnt sold as a tax, it was sold as a contribution to your retirement security. The cap on wages was because there is a cap on future withdrawls.
Had it been sold as a tax x to pay y scheme, it never would have passed.
and dont forget its 12.4 not 6.2, your employer kicks in the same 7k and self employeds pay whole 12.4.
Ive been kicking in the max for over 10 years, i'll never see a dime in return, now you want to take more?
a Ponzi is a Ponzi is a Ponzi, sucking more out of the new investors wont keep it solvent forever.
I hate common sense. My unicorns are having their balls kicked in and my tooth fairy says that she's really a guy and wants a sex change. What's a baby boomer to do?
Normally, Charles Hugh-Smith is pretty good, but this article really lowers my opinion of him. It looks to me like there are "talking points" on social security because the same points are raised time and again. This must be the 50th time I have read a nearly identical article.
They always say that people collecting social security are living too long and are free loaders. Then they go into the same old story about how "entitlements" like SS cannot be paid - but I have never seen a single one suggest that welfare - or any other far more wasteful expenditure - should not be paid. Just SS. No mention of the fact that people paid for this. No mention of the fact that the money was mismanaged and then stolen. No mention of the fact that income taxes have fallen way behind because the taxes/rates on the highest earning taxpayers are far lower than they were in the past. No mention of all the people who are collecting SS without having made contributions.
Well said, though maybe America can start by not being the greatest supporter of the MIC. Maybe won't need to be the world's police, just a thought.
so,
is the plan to first cut pensions in order to keep enriching Wall Street
and War Street?
OR
is the plan instead to first cut the trillion dollar handouts to the war and finance syndicate
before any adjustments are made to pensions and social programs?
(any who recommend budgeting with a belief that old-age pensions are equal or worse than hell-fire drones ... are operating under a delusion crafted by an endless public mantra of "entitlements" and "warrior heroes").
Okay, I'll take counterpoint. What everyone forgets is the bulk of SS and pensions were stolen. The feds have quadrillions in IOUs sitting in SS coffers. We're just suppoed to say "meh" and let them not repay? The corporations also pushed thru the 401K crap pension funds to push fiscal responsibility out of their ledger, then looted trillions from the old pension funds for astronomical CEO pay and bonuses. So we just shrug and say "I'm okay with that". What's needed is a Ron Paul style forensic audit that brings all this to light in a prosecutable manner. Shut down all military spending, except pay and VA, until all the SS IOUs are repayed. Seize all CEO/Board member's assets and prosecute until all the old pension funds are solvent.
I kknow, it'll never happen. But it needs to happen.
+1
Stop making sense !
Shut down all military spending, except pay and VA, until all the SS IOUs are repayed.
So your solution is to defund the one thing that the Constitution specifically requires and use the dollars to fund the unconstitutional Ponzi scheme.............Brilliant!!
The current military is 80-90% waste. Sure, keep the 10-20% needed to pay/supply the current forces, but no more million dollar hammers & toilet seats, and certainly no more quadrillion dollar boondoggles like the F35!
"we wuz promised"
More like "We haz paid for" all our lives, every paycheque.
"Assuming "growth" will fund all promised pensions and entitlements is magical thinking."
Indeed, but Chuck why is it that when it comes to deficit elimination you lot have such an odd set of priorities, and always seem to want to start slashing where the least difference can be made, yet will hurt a large portion of the shrinking middle class the most?
Eg. I see ~50% of fat that can be trimmed from the following pie chart, w/o (yet) downgrading Granny's catfood supper from wet to dry:
https://upload.wikimedia.org/wikipedia/en/c/ce/Fy2010_spending_by_catego...
At least it might be a Decent place to start, no? Sure, it might leave a few multinationals on the hook for their own overseas operations defense costs, but if you wanna make an omelette... amirite?
Exactly, the idea that pensions are somehow selfish or unjustified is ridiculous. “We wuz promised” as if holding someone (an employer) to a promise is somehow selfish and petty.
The lack of accountability in American society is only matched by our lack of empathy.
TIAA-CREF IS INSOLVENT.
All non-guaranteed pensions are Madoff ponzi scams.
I need the lawless .gov to fuck off and get out of my face and my wallet.
I want every friggin dime I paid into SS/Medicare paid back in a lump sum right now. I am fine with clawbacks from criminal politicians and bankers personal/family assets.
No more paid in either. I do not need lawless felon criminals in .gov to take care of my retirement.
And for the rest of you assclowns, don't even think about coming down my street rioting because you lost your pension. (or for any other reason) You will not be allowed.
Grimaldus
Trump / Grimaldus 2016....I like your style
So, ins tory the "brats"are thos people were promissed pensions, and now want what they were prmissed? God forbid workers actually get anything, right, we should just be happy to have a job. Idiot
This is rather bogus.
I suggest that what is happening in Britain is happening elsewhere.
The British people have, in general, paid in all their lives to fund a state retirement pension.
This group is A.
Millions of immigrants have poured in. Many are unemployable and/or have never worked. Many are on benefits - so are already taking money out of the coffers for years at a time - never contributing a penny.
Also expect a state retirement pension. B.
So the contributions in the kitty of A have to be shared with B/Bs.
So A loses half their pension to B because A's original pension they have paid in for - is deemed 'unaffordable' because B grabs half.
In fact A's pension is perfectly affordable and paid for by A.
The problem is the freeloader marked B who thinks they have a God given right to steal half of A's pension meaning they both get cut back.
B should not get the pension.
Not paid in - why pay them out.
Either their country of origin takes up the slack and pays them from abroad - or they have to return to get the pension in their own country.
Time for the As to stop being stupid doormats and protest.
You are being blindly robbed by foreign scroungers.
Get off your butt and say NO.
Macy's is going to boycott you for that.
The boomers have already enjoyed the best years of this country. Let them have processed cheese-like food to go with their whine. The Hondurans and Somalis who just got here need money.
What are all those retirement shekels going to buy? A stamp?
When I tell California public school teachers "the pension promises that have been made to you will not be kept," their eyes glaze over and they get this annoyed look in their eyes, as if I was talking to them in Canto.
Then they go back to telling me, "you know what, Lin? If I keep teaching until 65, I will get THIS much more money! So I'm gonna keep going. Just think, 10 more years and I've got it made!"
Please bear in mind the stress of having to daily deal with classrooms packed to overflowing with anchor babies has already destroyed the health and sleep patterns for most of these poor, deluded "educators."
Both Public and Private pension funds are underfunded. They all claimed they would produce 8+% growth over time. Well, they have not done that. Taxpayers will be tapped to keep the Public employees funded. Private pensioners will be sent to the PGTF. That program pays a fraction of the real promised private pensions.
Here is a teacher I know. Just retired. This person gets, and I know this for a proven fact, the following
1. A Full State Funded Teacher's Pension Payout
2. Full Social Security Payout
3. A School District funded 401K ,matching funds, account
Notice, many of us rely on ONE of these! Or at the most two.
I asked, him, after getting the school district and state to fund them a full private pension, how in hell could the district be forced to fund a 401K mathcing fund pension. He said, we threatened to strike if we didn't get it. "After all, many workers have 401Ks" I said "Are you fucking nuts! 401K was a replacement FOR private pensions. Not an added pension."
If you work for the schools, you can retire in luxury. How do I know? Locally, the most expensive, largest luxury homes are those of retired teachers. Some worth 1 million +.
Jack, are you implying that after a career of service and paying into a pension plan(s) your anecdotal teacher doesn't deserve to retire with what they signed on for, and what you're calling 'luxury'?
If so, using your language what sort of retirement do they warrant?
Fair enough. The Taxpayers fund the State pension and contribute to a 401K. Plus full Social Security. You imply 3 full pensions is a norm worth us funding?
Ans. If that is the contract your elected representative agreed to fund, and the professional fulflilled their end of the bargain over their career, yes. Same-same as any other set of contractual obligations, private or public. In both sectors better benefits, perks, and pay are used to attract better quality employees, no?
Anyway, aside from the extensive evidence provided by your local teaching acquaintance, I'm not entirely convinced that your 'triple threat' is an accurate description of the norm for teachers' pensions nationwide, but even if it is: good for them, they've earned it. Sounds like a promising career choice kids, write that down. Better books than mercenaries!
Speaking of the devil, there are the unequivocally destructive expenditures of empire that eat up, what, ten times the amount the US taxpayer spends on maintaining the three r's...I know I certainly wouldn't start raging up and down the street if that ratio was reversed.
But I respect your individual value judgement: perhaps a living pension is too good for public teachers. Let's disregard the fact that different professions, public and private, all over the world, command as many different pay, perks, and pensions as there exist occupation types. In that case maybe teachers in the public system should only get the same pension as anyone else, or the minimum, or the same as a fry cook, or whatever amount you have decided is fair. Fine with me if that is how you feel. All I am suggesting is that we gut the big fish lavishly wasting our labour abroad bombing on behalf of inscrutable private interests before we fry any hungry little minnows actually providing a valuable service for everyone back home. (And don't kid your island-unto-your-self, public education benefits everyone).
Just my opinon, natch. You are of course entitled to your own set of priorities.
The biggest tragedy for social security is the mismanagement of the funds. People are obligated to contribute with each paycheck throughout their working lives. That is long term money. It should have been placed into long term investments, like real estate, etc. It wasn't and it isn't. If this had been done, they would have so much money they wouldn't know what to do with it. Then they put the blame on the old people for living too long!
Social Security Trust Fund Billions were placed in the General Budget by Lyndon Johnson in order to Fund the Vietnam war and Social Spending. Since then, SS supluses have all been stolen by congress for wars and social spending. It is all gone, replces with worthless T-Bills. Trillions of surplus dollars were stolen. Without this open theft, SS would be funded into any future needs. Trillions in surplus, plus interest paid of trillions of suplus.
But, Congress stole it. It paid for the Air War over North Vietnam. It paid for Aircarft Carriers, tanks, the Iraq war, Greneda, the Urkaine coup, ANYTHING BUT for the people who paid in.
Yet another reason to loathe LBJ. Whatta POS.
I like your printing dollars for SS benefits idea. Here is another one for public pensions:
Since the local and state politicos cannot solve this being owned by the unions, The Feds could come in and apply the same actuarial discipline that the private sector chafes under. No exceptions. To meet this very reasonable standard, the feds should begin by lending money as needed to keep the pension funds compliant. Where will the money come from to pay back these loans? From those who benefit—the beneficiaries. Since the feds have unlimited ability to tax income in any way they want, they should establish an excise tax on benefits derived from these bailed out pension systems to fund the bailout.
http://www.stltoday.com/news/local/govt-and-politics/half-million-retire...
speechless
And to read the comments on that, many responses to the affirmative that she DESERVES that. Unbelievable.
St. Louis=Detriot. 3 years max
Anybody who says states and municipalities can't print their own money is wrong, re: pension obligation bonds.
Ask any Oregonian, or Californian, or Illini what a pension obligation bond is, they don't have a fucking clue. The pensioners really believe there is a box of money with their name on it, waiting for retirement.
This would be an interesting exercise: require public pension funds to have half of their assets in municipal and state bonds. Make them eat their own cooking.
Or, since public employee unions were brought into existence by Executive Order (Kennedy), I guess the next executive could simply rescind the order. That would be fun to watch.
The pensions will crash, especially the public-sector pensions. Many are already crashing.
But the commonly accepted premise in this and many other articles about the crashing pensions is, "They made promises to pay pensions at a future date having no idea if the money would be there."
Most of those in management positions who approved these pension plans knew the money would not be there. A perfect example is GM. Remember all those "labor disputes" in the 70's and 80's where the unions claimed they were being ripped off, that they were being treated like slaves? They threatened to strike and went on strike to force management to accept their demands.
Management tried to talk sense to the greedy and stated clearly they simply couldn't afford it.
Truth and reality could not overcome the greed of the unions. But management was forced with the decision of spending within their means and risking a strike that would destroy their market share and revenue (or political office and budget in the public sector) or caving and kicking the "pension payment" can down the road.
We've reached the end of the road in many industries and are about to reach the end of the road in others.
Everyone knew at the time the money would not be there, but the unions refused to budge.
No, the unions are not the only ones to blame for the collapse of industries. Our fascist-based monetary system is the godfather behind the coming collapse, combined with the Peter Principle and management and the graft and cronyism in political and government positions.
There is plenty of blame to go around and many reasonable explanations for why the collapse is coming.
But if there is a Greek chorus to this drama, their refrain should center upon Greed.
Greed gravitates to those who amass the most
Merely increasing inequality.
Those who have, gain more --
More burdens heaped upon the poor.
Pray Dionysos ease the pain
Pay blood and fire for disdain
Deny it not: Nemesis awaits
When Justice is delayed.
Using the author's logic then just stop all taxes and just print the damn money you need. WTF?!? Why didn't I think of that?!!!!!
Everybody gets a retroactive pay cut. Teachers, in particular, take lower pay in return for generous benefits. Now the benefits are being stripped away, often retroactively, and nobody is making up the pay cut.
Yes, ZIRP and the overall looting of the bond market over the past 30 years has made pensions untenable. But this was not unforeseen. In the 1980s, those who had pension obligations, large employers and units of government, started working to loosen the rules on how much money had to be set aside today to meet pension obligations into the future. Then in the 1990s, rules were changed allowing ridiculously optimistic earnings forecasts to be used, allowing even smaller contributions to be set aside.
So in the end, employees will work for a lower wage than they would have agreed to, and pensions will just show empty pockets.
Meanwhile, employees have been moved over to IRA's and 401k's for retirement savings. Professional stockbrokers make their money on fees and commissions, not buying and holding stocks.
The pension collapse scam that is unfolding is a slow-motion heist. It's not only worked, but it's obviously very popular too. Wage income has been transferred from workers to the Finance sector, yet again. This time retroactively. Good job.
After the Soviet Union collapsed, and they went through their 8th pension reform, I read the average pension was @1200 rubles, but the poverty line was 1800 rubles.
Enjoy your cat food while surfing those Obamaphones you ignorant pigs.
in my conversations with friends, protecting assets from the government ranks 2nd, that meth head that just seen you pull out of your gated community, and follows you to where your going ranks 1rst he just wants the few bucks your carring, and pensions are like the lottery have to be in it to win it, and a meth head will take you out of the lottery.