Public Pension Crisis: Two options remain -- Implosion or Reform

[Dittohead not!]

This is not a proposal to eliminate Medicare, it's a proposal to reform Medicare and make it (somewhat) more sustainable.

Currently, Medicare is unsustainable. Meaning that it will not be sustained. Foot stomping and being Very, Very Angry, and banging our sippy cups and blaming each other isn't going to stop the math.

It's an unworkable idea. Seniors aren't going to be able to find their own health insurance with any "voucher" provided by the government.
The reason Medicare is so expensive is that health care in this country is the most expensive in the world.

 

[Bullseye]

Baloney. Even worse - yesterdays baloney that is on its way out. That money is not "already spent". Trump just came up with billions and billions and billions of dollars - $70 billion - to spend more on the military ... that was NOT already spent... funny how that happened.

You really have no idea how the federal budget works do you?

Feel free to show me the shortfalls each year for the years you project and then show me how we could not take that from the budget because you claim there will not be money there.

See the Trustee's report; they're the ones predicting the shortfalls - I'm sure it's loaded with all the graphs and tables you could ever want.

SS is an obligation we have already made and the people getting the benefits have fulfilled their end of the deal. The government must fulfill their end as well or we are worth nothing as a people.

Guess again. Ever look at those annual statements you get? Nowhere in them does it say the amounts it lists are GUARANTEED.

You don't want to go that route? Fine. We can raise FICA taxes now and pop the cap on contributions while freezing benefit levels and much of the problem simply vanishes. All we need is some leadership on this issue and the will to tell the right wingers to shove it with their doom and gloom "lets screw the people" ravings.

Actually, no, raising FICA may help a bit but it's been tried over 50 times in the life of SS and we're still in trouble. Problem with that is demographics is against us; the ratio of paying workers to beneficiaries keeps dropping and people keep living longer.

You can keep denying the facts, haymarket, but you can't change them.

 

[Renae]

Do you have any hard evidence to present that states will not be able to pay pensions in the future?

Then a letter arrived in October. The California Public Employees’ Retirement System was cutting his $2,500-a-month pension by 60 percent, bringing it to about $1,000 a month.

“I was really shocked when I found out about it,” Cussins said. “We thought the pensions were there for the rest of our lives.”

Loyalton’s four retired city employees became the first in California to see their pensions sliced by CalPERS because of a city defaulting on its payments to the fund, but hundreds of other government retirees across the state may soon face a similar fate. At the same time, financially strapped local governments that considered pulling out of the state pension system, some hoping to find more affordable alternatives, have found it next to impossible to do because of the large termination fees they must pay CalPERS if they do.

This tiny Sierra Valley town voted to pull out of CalPERS. Now city retirees are seeing their pensions slashed

https://calmatters.org/articles/california-retirement-pension-debt-explainer/

State Pension Funding Hits Record Low Nationwide | Money

 

[Helix]

May I ask what state?

Indiana.

 

[Neomalthusian]

But they ARE enforceable in this case. A deal with the state will ALWAYS pin the cost on the taxpayers. ALWAYS EVERYTIME.

Pensions weren't set up to be paid by general taxes. They were set up to be funded by the employees themselves, with match coming from the taxpayers of the day. In other words, if I'm the taxpayer and you're the public worker, the way we set up the pension was with the idea that you'd defer some of your current pay into a fund, and I'd match your contribution, and those funds would be invested and then used to pay your benefits.

In the fine print it says "but if you guys want to promise the benefits without actually deferring enough pay or matching money into the fund, that's fine, we'll just make future taxpayers pay for it." What a deal that is for you and me! It's those future taxpayers that get slammed with an unfunded liability.

You are saying a deal is NEVER good with the state.

I'm saying DB pension deals are never good with anyone. No type of fiduciary has had consistent success with them. State and local governments screw them up. Unions screw them up. Companies screw them up. They're bad news. We don't have to pay people this way, and we shouldn't, given it does not work well over the long term.

 

[haymarket]

You really have no idea how the federal budget works do you?

My degree is in Political Science and I taught Government for over 33 years. Yes - I know how the budget works and I know it is voted on and something years and years out is not already "money spent".

Now are you ready to discuss this rationally ?

We can
1- raise FICA taxes to raise more money,
2- pop the cap on what you pay and freeze benefit levels
3- in the future dip into other funds to cover the SS shortfall

You may not like it, but we will NOT cut benefits as it is not politically feasible. If any politician who represents me dares to betray our sacred contract and cut my benefits that I have already earned and were agreed to, I will treat that person no differently that a thief who is trying to rob me. And they will be dealt with accordingly.

And that goes the same for anybody enabling the thief to rob me.

 

[haymarket]

This tiny Sierra Valley town voted to pull out of CalPERS. Now city retirees are seeing their pensions slashed

https://calmatters.org/articles/california-retirement-pension-debt-explainer/

State Pension Funding Hits Record Low Nationwide | Money

Let me ask you a very simple question: do you honor your contracts that you enter into?

 

[vegas giants]

Pensions weren't set up to be paid by general taxes. They were set up to be funded by the employees themselves, with match coming from the taxpayers of the day. In other words, if I'm the taxpayer and you're the public worker, the way we set up the pension was with the idea that you'd defer some of your current pay into a fund, and I'd match your contribution, and those funds would be invested and then used to pay your benefits.

In the fine print it says "but if you guys want to promise the benefits without actually deferring enough pay or matching money into the fund, that's fine, we'll just make future taxpayers pay for it." What a deal that is for you and me! It's those future taxpayers that get slammed with an unfunded liability.



I'm saying DB pension deals are never good with anyone. No type of fiduciary has had consistent success with them. State and local governments screw them up. Unions screw them up. Companies screw them up. They're bad news. We don't have to pay people this way, and we shouldn't, given it does not work well over the long term.

Take it up with the guys who broke the deal. Put them in jail for all I care. Retirees kept their end of the bargain. You can not break the deal

 

[Spartacus FPV]

My degree is in Political Science and I taught Government for over 33 years. Yes - I know how the budget works

Doesn't seem like it. Considering your ignorance regarding constitutionality, sounds like a whole lot of miseducated students were ripped off.

 

[Bullseye]

Indiana.

Congratulations, Indiana appears to be one of the 6-7 states that has a stable pension system.

 

[Neomalthusian]

My degree is in Political Science and I taught Government for over 33 years. Yes - I know how the budget works and I know it is voted on and something years and years out is not already "money spent".

Now are you ready to discuss this rationally ?

We can
1- raise FICA taxes to raise more money,
2- pop the cap on what you pay and freeze benefit levels
3- in the future dip into other funds to cover the SS shortfall

You may not like it, but we will NOT cut benefits as it is not politically feasible.

Cutting benefits is no less politically feasible than your list of options. It all involves "taking" the money from somewhere. If what you're saying is the senior voting bloc currently has the power and that that's what determines political feasibility, then fine, I agree with that because it's directly observable, seniors are a powerful group of voters that for now will continue to win this debate. But that doesn't mean benefit cuts are inherently so bad whereas taking the money from everywhere else is inherently so good. It's just a greedy bunch of voters currently winning the voting game.

There is one group of Americans that your list intentionally avoids in the cost of this fix, and that is wealthy retirees. They are the ones that directly benefited from these liabilities being created. Their taxes were kept artificially low all their lives, and their promises to public workers created an enormous problem for the next generation. By refusing to look at benefits, you are protecting old wealth exclusively.

This old wealth will be handed down, creating the next round of privileged heirs who will have a relatively great quality of life. Those who aren't privileged to inherit will be broke, impoverished non-pensioners.

Your position on pensions and pensioners perpetuates social inequality.

If any politician who represents me dares to betray our sacred contract and cut my benefits that I have already earned and were agreed to, I will treat that person no differently that a thief who is trying to rob me.

And likewise, I will treat you and the people you vote for like thieves because you refuse to include older generations (who created these liabilities) in the fix.

 

[Helix]

Congratulations, Indiana appears to be one of the 6-7 states that has a stable pension system.

Well, we can't let that little detail get in the way of screwing those who paid in.

 

[haymarket]

Doesn't seem like it. Considering your ignorance regarding constitutionality, sounds like a whole lot of miseducated students were ripped off.

Your personal insults designed to attack a perceived political enemy reveal tons about you and nothing about me - a subject you are abysmally ignorant about.

 

[haymarket]

Cutting benefits is no less politically feasible than your list of options.

Cutting benefits is theft pure and simple. Any thief who tries to steal from me what is mine or what has been promised to me because I have earned it, will risk my wrath.

Your position on pensions and pensioners perpetuates social inequality.

Gimme a freakin break and don't make me gag in revulsion. . It is right wing policies that have created social inequality so spare me the phony garbage in defense of screwing working people out of what they have rightfully earned.

And likewise, I will treat you and the people you vote for like thieves because you refuse to include older generations (who created these liabilities) in the fix.

Taxation is not theft - so you have no argument.

 

[Neomalthusian]

Take it up with the guys who broke the deal. Put them in jail for all I care.

Who is that? There's no one there. It's a collective failure. There are no criminals. This problem is the fault of no one and everyone. There's no singular person to blame. There are some examples out there that make some people seem like they're more to blame than others, but there is no singular thief or criminal or cause of the failure. It's dynamic and multi-systemic failure. Pensions do not work long term.

Retirees kept their end of the bargain.

No they didn't. They couldn't. It wasn't even possible for pensioners to actually do the right thing in terms of funding their pensions.
The nature of pensions made it impossible for them to "keep their end of the bargain." Their end of the bargain was intended to fully fund their own pensions with matched contributions from taxpayers. This failed. Currently, pensioners are getting a screaming deal over this debacle, as well as older wealthier retirees (who may or may not be public pensioners). They benefited from the bad promises. And now they're being treated like special little flowers who can't be touched, while the rest of the country careens toward bankruptcy funding their comfy retirements.

You can not break the deal

The mere existence of unfunded pension liabilities breaks the deal.

Your posts demonstrate the collective myth that this entire nation gullibly believes about DB pensions. You're not alone or especially ignorant about this. Lots and lots of people think the way you do about this, and it's simply not correct. The myth is that "someone stole the money," and "they" need to be kept to "their" end of the bargain. There is no "they." The pension system is failing all the way around. There's no one to blame or put in jail. It's a systemic failure, and addressing the failure will be painful. You and most others remain in denial about this and all you seem to care about is that the cost of the fix be painful only to younger Americans but not at all to older Americans. It's age-based discrimination, basically.

 

[vegas giants]

Who is that? There's no one there. It's a collective failure. There are no criminals. This problem is the fault of no one and everyone. There's no singular person to blame.



No they didn't. They couldn't. Pensions made it impossible for them to keep their end of the bargain. Their end of the bargain was intended to fully fund their own pensions with matched contributions from taxpayers. Pensions



The mere existence of unfunded pension liabilities breaks the deal.

Your posts demonstrate the collective myth that this entire nation gullibly believes about DB pensions. You're not alone or especially ignorant about this. Lots and lots of people think the way you do about this, and it's simply not correct. The myth is that "someone stole the money," and "they" need to be kept to "their" end of the bargain. There is no "they." The pension system is failing all the way around. There's no one to blame or put in jail. It's a systemic failure, and addressing the failure will be painful. You and most others remain in denial about this and all you seem to care about is that the cost of the fix be painful only to younger Americans but not at all to older Americans. It's age-based discrimination, basically.

Nope. RAISE TAXES. That is the solution. The retirees kept their end of the deal in full. I mean you can try to break the deal but most judges are going to rule in favor of the retirees. A deal is a deal. All you need to do is raise taxes

 

[haymarket]

Nope. RAISE TAXES. That is the solution. The retirees kept their end of the deal in full. I mean you can try to break the deal but most judges are going to rule in favor of the retirees. A deal is a deal. All you need to do is raise taxes

You are 100% correct.

And to think all these decades I actually fell for the bull crap that conservatives were fiscally frugal, people of old fashioned honor and believed in upholding contracts and agreements entered into. Boy oh boy but that was a line of horse puckey.

 

[Neomalthusian]

Cutting benefits is theft pure and simple.

Unfunded liabilities are theft by older Americans from younger Americans, pure and simple.

Any thief who tries to steal from me what is mine or what has been promised to me because I have earned it, will risk my wrath.

You've only earned part of it. Unfunded liabilities define the portion of your pension payments that you have not earned. Millennials will realize this eventually. I recommend you start getting ready for that.

It is right wing policies that have created social inequality

False. Public sector pensions perpetuate inequality, and you're trying like hell to protect wealthy retirees from being whatsoever at all impacted by the cost of fixing the nation's public pension crisis that old wealthy retirees created. You're the regressive here that is championing inequality. It's not my fault you're unaware of that and can't connect the dots. I'm trying my best to help you.

 

[Renae]

Let me ask you a very simple question: do you honor your contracts that you enter into?

Let me ask you, what happens when you can't afford to pay a contract?

 

[Renae]

You are 100% correct.

And to think all these decades I actually fell for the bull crap that conservatives were fiscally frugal, people of old fashioned honor and believed in upholding contracts and agreements entered into. Boy oh boy but that was a line of horse puckey.

You guys do realize Jerry Brown set the table for Cali to renegotiate (I.E. cut your pension) in the future right?

 

[haymarket]

Unfunded liabilities are theft by older Americans from younger Americans, pure and simple.



You've only earned part of it. Unfunded liabilities define the portion of your pension payments that you have not earned. Millennials will realize this eventually. I recommend you start getting ready for that.



False. Public sector pensions perpetuate inequality, and you're trying like hell to protect wealthy retirees from being whatsoever at all impacted by the cost of fixing the nation's public pension crisis that old wealthy retirees created. You're the regressive here that is championing inequality. It's not my fault you're unaware of that and can't connect the dots. I'm trying my best to help you.

The right wing needs badly to just shut up already and do it. And watch what happens then. Just watch what happens as they will be signing their own political death warrants.

 

[haymarket]

You guys do realize Jerry Brown set the table for Cali to renegotiate (I.E. cut your pension) in the future right?

Again, why can't the shortfall in the California pension system be made up from the general annual state budget?

 

[Neomalthusian]

Nope. RAISE TAXES. That is the solution.

Raising taxes to address the pension debacle (without touching benefits) is a straight wealth transfer from poorer, younger Americans to already wealthier, older Americans. It also amounts to a bailout, which is an admission that the pension scheme has failed. The pension scheme was set up to fund itself by contributions, not general taxes. The need to pivot to taxes displays failure of this scheme.

The retirees kept their end of the deal in full.

Only partially. One half of the size of unfunded liabilities are the portion of their end of the deal they did not keep. By definition.

 

[Neomalthusian]

Again, why can't the shortfall in the California pension system be made up from the general annual state budget?

It can. Totally. But you have to understand what such a policy represents. It's inherently a bailout, a reform that changes the way pensions were designed to be funded, and it's also a wealth transfer from some Californians to others. The ones being bailed out are the ones who created the problem, and the ones paying are the ones who did not create the problem.

Remember that by advocating maximum redistribution to already older, already wealthier Americans from poorer, younger Americans is the epitome of regressive policy.

 

[haymarket]

Raising taxes to address the pension debacle (without touching benefits) is a straight wealth transfer from poorer, younger Americans to already wealthier, older Americans. It also amounts to a bailout, which is an admission that the pension scheme has failed. The pension scheme was set up to fund itself by contributions, not general taxes. The need to pivot to taxes displays failure of this scheme.



Only partially. One half of the size of unfunded liabilities are the portion of their end of the deal they did not keep. By definition.

Pop the cap on FICA contributions removing the current limit and the money will not be coming from what you describe as "poorer" Americans. It will come from the top 6% of earners. Make it so ALL earners pay the same percentage that the current lowest 93% currently pay. Simply freeze the top benefit level to what it is today and most of your shortfall problem is then gone with the wind.

And then your phony rhetoric dies a hard death upon that reality.