Pensions Aren't Bankrupting (Most) States

[william the wie]

William

You might be right, I don't know. I've never done a political analysis of the states.

I don't want to leave the impression that all jurisdictions are fine. Some are in dire straights. Here in Florida, even though the state is in good shape, many cities and counties in the state are in trouble.

While it is not necessarily outright corruption the fact that it looks like one hand washing the other when it comes to public sector unions and the Democrats makes the partisanship quite understandable. It smells of payoffs to a party machine at taxpayer expense.

 

[Norman]

I beliebe someone in this thread has watched democrat TV too much...

Partisan hackery from both sides seriously need to die.

For the facts in this matter I say:

1) "pensions" not having any evidence of costing the state something is just as laughable as military not having any evidence of being the reason for deficits.

2) In general, public unions are not bargaining with anyone. They are the voter (pay check payer) and the receiver of the check. So of course they will demand ever increasing wages - tax payers can't go bankrupt. Public wages should be determinated by how bad government needs the employees. If there are not enough enough employees willing to do the job, increase the wages. If there is huge unemployment and everyone else is getting a pay cut, it is sensible to cut the public wages.

Then again, US government never cuts anything so I can see why public employees think their wages should not be cut either.

 

[PoliticalChic]

I beliebe someone in this thread has watched democrat TV too much...

Partisan hackery from both sides seriously need to die.

For the facts in this matter I say:

1) "pensions" not having any evidence of costing the state something is just as laughable as military not having any evidence of being the reason for deficits.

2) In general, public unions are not bargaining with anyone. They are the voter (pay check payer) and the receiver of the check. So of course they will demand ever increasing wages - tax payers can't go bankrupt. Public wages should be determinated by how bad government needs the employees. If there are not enough enough employees willing to do the job, increase the wages. If there is huge unemployment and everyone else is getting a pay cut, it is sensible to cut the public wages.

Then again, US government never cuts anything so I can see why public employees think their wages should not be cut either.

"...military ...the reason for deficits..."

Why'd ya' settle on the military, Norm?

Obama’s 2011 Budget Proposal: How It’s Spent

Obama?s 2011 Budget Proposal: How It?s Spent - Interactive Graphic - NYTimes.com

$3.69 trillon budget proposal

1. Social Security $738 20%

2.National Defense $738

3. Income Security $567

4. Medicare $498

5.Net Interest $251

6. Health $381

7. Education $122

8. Veteran’s Benefits $122

9. Transportation $91.55

10. International Affairs $67.39
$3,575.94

 

[PoliticalChic]

Why employee pensions aren't bankrupting states | McClatchy

Some states, counties and cities are in trouble, however.

Facts won't mollify the envy and hate fueled tea party or dissuade the GOP from its agenda. American citizens employed in local, state or federal government and union members of all kind are their targets.

Wages must be capped and benefits curtailed even as the costs for fuel, medical care, food and credit continues to rise, and the profits of corporations and industry skyrocket to new heights. Why? Because the power elite in America would have us believe it is all the fault of greedy employees, the lazy underclass and the illegal immigrants.

Kid yourselves not, a class war exists in America today and while it has not yet met on the battlefield the offensive has begun in rhetoric filled with hate and fear; their goal, to divide working Americans and to take the focus off of those who rape and pillage and pollute.

Who are we being told to hate and fear?
People of color;
Gays and Lesbians;
Muslims;
Liberals and progressives;
The poor;
Immigrants;
Dissidents;
Labor unions;
Teachers;
Your neighbors and friends.

What's at the bottom of all this?

Tax cuts and sweetheart deals for businesses.

Simple as that.

I recall reading that HillaryCare ordered prospective doctors into particular specialties...you know, the way all good totaltitaians do, but...

... exactly where in the Constitution does it dictate what line of work one must enter?

 

[boedicca]

The OP is incorrect. Even that well known NEOCON RAG The New York Times recognizes that public employee pensions are a problem.

(They're not the only problem, but combined with ballooning entitlements, excessive employee levels and comp are killing the economy.)

Of course, being the NYT, they have to diss actually dealing with the root of the problem: union's collective bargaining power (I refuse to call it a right).

At a time when public school students are being forced into ever more crowded classrooms, and poor families will lose state medical benefits, New York State is paying 10 times more for state employees’ pensions than it did just a decade ago.

That huge increase is largely because of Albany’s outsized generosity to the state’s powerful employees’ unions in the early years of the last decade, made worse when the recession pushed down pension fund earnings, forcing the state to make up the difference.

Although taxpayers are on the hook for the recession’s costs, most state employees pay only 3 percent of their salaries to their pensions, half the level of most state employees elsewhere. Their health insurance payments are about half those in the private sector.

In all, the salaries and benefits of state employees add up to $18.5 billion, or a fifth of New York’s operating budget. Unless those costs are reined in, New York will find itself unable to provide even essential services.

To point out these alarming facts is not to be anti- union, or anti-worker. In recent weeks, Republican politicians in the Midwest have distorted what should be a serious discussion about state employees’ benefits, cynically using it as a pretext to crush unions.

New York does not need that sort of destructive game playing. What it needs is a sober examination of the high costs of wages and benefits, and some serious proposals to rein them in while remaining fair to hard-working government employees.

Gov. Andrew Cuomo has pursued a reasonable course, making it clear that he expects public unions to make sacrifices, starting with a salary freeze. He wants to require greater employee contributions to pensions and health benefits, with a goal of saving $450 million.

Negotiations begin this month, but so far union leaders have publicly resisted Mr. Cuomo’s proposals. If they don’t budge, Mr. Cuomo says he will have to lay off up to 9,800 workers. That would damage the state’s struggling economy. Some compromise must be found. ...


http://www.nytimes.com/2011/03/06/opinion/06sun1.html?_r=1

 

[Norman]

I beliebe someone in this thread has watched democrat TV too much...

Partisan hackery from both sides seriously need to die.

For the facts in this matter I say:

1) "pensions" not having any evidence of costing the state something is just as laughable as military not having any evidence of being the reason for deficits.

2) In general, public unions are not bargaining with anyone. They are the voter (pay check payer) and the receiver of the check. So of course they will demand ever increasing wages - tax payers can't go bankrupt. Public wages should be determinated by how bad government needs the employees. If there are not enough enough employees willing to do the job, increase the wages. If there is huge unemployment and everyone else is getting a pay cut, it is sensible to cut the public wages.

Then again, US government never cuts anything so I can see why public employees think their wages should not be cut either.

"...military ...the reason for deficits..."

Why'd ya' settle on the military, Norm?

Obama’s 2011 Budget Proposal: How It’s Spent

Obama?s 2011 Budget Proposal: How It?s Spent - Interactive Graphic - NYTimes.com

$3.69 trillon budget proposal

1. Social Security $738 20%

2.National Defense $738

3. Income Security $567

4. Medicare $498

5.Net Interest $251

6. Health $381

7. Education $122

8. Veteran’s Benefits $122

9. Transportation $91.55

10. International Affairs $67.39
$3,575.94

My point was that everything is a part of the deficit.

And since this guy is obviously a liberal hack, the military spending was the best example.

 

[Toro]

My point was that everything is a part of the deficit.

And since this guy is obviously a liberal hack, the military spending was the best example.

Are you referring to me?

 

[PoliticalChic]

My point was that everything is a part of the deficit.

And since this guy is obviously a liberal hack, the military spending was the best example.

Are you referring to me?

I'll hold ya' coat, Toro!

Go to it boys!

 

[Toro]

My point was that everything is a part of the deficit.

And since this guy is obviously a liberal hack, the military spending was the best example.

Are you referring to me?

I'll hold ya' coat, Toro!

Go to it boys!

A critique of a popular meme does not make one an ideological stooge.

 

[Pepe]

The majority of Economists with measurble IQs see returns for Investments over the next 5 years at 3.6% max not the Tinkerbell 8% fairy tale rates projected by most Public Pension Fund Managers.

States, especially Blue States, use very "creative accounting."

GAAP requirements need to apply and a Bill in Congress to force Union Pensions into "realistic accounting" is being fought by the Left like it is Custer's last stand.

There is a reason Illinois "requested" that the Obama Administration "Guaranteee" their Bonds.

It doesn't require a Degree in Rocket Science to connect the dots.

Then let's throw in February's Deficit of 223 Billion for the Empire................

 

[Toro]

The majority of Economists with measurble IQs see returns for Investments over the next 5 years at 3.6% max not the Tinkerbell 8% fairy tale rates projected by most Public Pension Fund Managers.

States, especially Blue States, use very "creative accounting."

GAAP requirements need to apply and a Bill in Congress to force Union Pensions into "realistic accounting" is being fought by the Left like it is Custer's last stand.

There is a reason Illinois "requested" that the Obama Administration "Guaranteee" their Bonds.

It doesn't require a Degree in Rocket Science to connect the dots.

Then let's throw in February's Deficit of 223 Billion for the Empire................

Pensions don't look ahead 5 years. They look ahead 5 decades. Five years is irrelevant.

 

[Pepe]

The majority of Economists with measurble IQs see returns for Investments over the next 5 years at 3.6% max not the Tinkerbell 8% fairy tale rates projected by most Public Pension Fund Managers.

States, especially Blue States, use very "creative accounting."

GAAP requirements need to apply and a Bill in Congress to force Union Pensions into "realistic accounting" is being fought by the Left like it is Custer's last stand.

There is a reason Illinois "requested" that the Obama Administration "Guaranteee" their Bonds.

It doesn't require a Degree in Rocket Science to connect the dots.

Then let's throw in February's Deficit of 223 Billion for the Empire................

Pensions don't look ahead 5 years. They look ahead 5 decades. Five years is irrelevant.

You can believe what you will but if you wish on one hand and shiite on the other, which is the most likely outcome?

Five years of continued future requirements and five years of lower return on Investments simply digs a deeper hole.

The Union Leadership is screwing its own members over the long term.

 

[Toro]

You can believe what you will but if you wish on one hand and shiite on the other, which is the most likely outcome?

Five years of continued future requirements and five years of lower return on Investments simply digs a deeper hole.

The Union Leadership is screwing its own members over the long term.

It's not about what I believe but what I know. What I know is that continuously changing a pensions assumed return based on five years worth of data leads to enormous volatility in plan asst values and an inaccurate understanding of the true economic condition of a pension. That's why professionals who calculate actuarial returns don't do it.

The other thing that I know is listening to what economists expect asset markets to do over anything other than the very long-term is an absolute fools game. Forecasting the weather or the Super Bowl winners over the next five years is about as accurate.

 

[PoliticalChic]

Are you referring to me?

I'll hold ya' coat, Toro!

Go to it boys!

A critique of a popular meme does not make one an ideological stooge.

That was HIM, Tor!

(Did you hear what Toro was muttering about you, Norm?)

 

[PoliticalChic]

The majority of Economists with measurble IQs see returns for Investments over the next 5 years at 3.6% max not the Tinkerbell 8% fairy tale rates projected by most Public Pension Fund Managers.

States, especially Blue States, use very "creative accounting."

GAAP requirements need to apply and a Bill in Congress to force Union Pensions into "realistic accounting" is being fought by the Left like it is Custer's last stand.

There is a reason Illinois "requested" that the Obama Administration "Guaranteee" their Bonds.

It doesn't require a Degree in Rocket Science to connect the dots.

Then let's throw in February's Deficit of 223 Billion for the Empire................

"The majority of Economists with measurble IQs..."

Now, that's funny!

But not as funny as this:

When Albert Einstein died, he met three New Zealanders in the queue outside the Pearly Gates. To pass the time, he asked what were their IQs. The first replied 190. "Wonderful," exclaimed Einstein. "We can discuss the contribution made by Ernest Rutherford to atomic physics and my theory of general relativity". The second answered 150. "Good," said Einstein. "I look forward to discussing the role of New Zealand's nuclear-free legislation in the quest for world peace". The third New Zealander mumbled 50. Einstein paused, and then asked, "So what is your forecast for the budget deficit next year?" —The Economist, June 13th 1992, p. 71).

 

[Toro]

That was HIM, Tor!

Yes, yes, I know.

When Albert Einstein died, he met three New Zealanders in the queue outside the Pearly Gates. To pass the time, he asked what were their IQs. The first replied 190. "Wonderful," exclaimed Einstein. "We can discuss the contribution made by Ernest Rutherford to atomic physics and my theory of general relativity". The second answered 150. "Good," said Einstein. "I look forward to discussing the role of New Zealand's nuclear-free legislation in the quest for world peace". The third New Zealander mumbled 50. Einstein paused, and then asked, "So what is your forecast for the budget deficit next year?" —The Economist, June 13th 1992, p. 71).

What's the definition of an economist?

An accountant without the personality.

 

[Samson]

The majority of Economists with measurble IQs see returns for Investments over the next 5 years at 3.6% max not the Tinkerbell 8% fairy tale rates projected by most Public Pension Fund Managers.

States, especially Blue States, use very "creative accounting."

GAAP requirements need to apply and a Bill in Congress to force Union Pensions into "realistic accounting" is being fought by the Left like it is Custer's last stand.

There is a reason Illinois "requested" that the Obama Administration "Guaranteee" their Bonds.

It doesn't require a Degree in Rocket Science to connect the dots.

Then let's throw in February's Deficit of 223 Billion for the Empire................

Pensions don't look ahead 5 years. They look ahead 5 decades. Five years is irrelevant.

Indeed.

But then don't you believe that the article's caveat:

Boston College researchers project that if the assets in state and local pension plans were frozen tomorrow and there was no more growth in investment returns, there'd still be enough money in most state plans to pay benefits for years to come

.


is even more significant? They aren't necessarily looking at decades, but instead, years.

 

[Samson]

The majority of Economists with measurble IQs see returns for Investments over the next 5 years at 3.6% max not the Tinkerbell 8% fairy tale rates projected by most Public Pension Fund Managers.

States, especially Blue States, use very "creative accounting."

GAAP requirements need to apply and a Bill in Congress to force Union Pensions into "realistic accounting" is being fought by the Left like it is Custer's last stand.

There is a reason Illinois "requested" that the Obama Administration "Guaranteee" their Bonds.

It doesn't require a Degree in Rocket Science to connect the dots.

Then let's throw in February's Deficit of 223 Billion for the Empire................

"The majority of Economists with measurble IQs..."

Now, that's funny!

But not as funny as this:

When Albert Einstein died, he met three New Zealanders in the queue outside the Pearly Gates. To pass the time, he asked what were their IQs. The first replied 190. "Wonderful," exclaimed Einstein. "We can discuss the contribution made by Ernest Rutherford to atomic physics and my theory of general relativity". The second answered 150. "Good," said Einstein. "I look forward to discussing the role of New Zealand's nuclear-free legislation in the quest for world peace". The third New Zealander mumbled 50. Einstein paused, and then asked, "So what is your forecast for the budget deficit next year?" —The Economist, June 13th 1992, p. 71).

Wow:


Economist Humor



Pretty Funny

 

[Toro]

But then don't you believe that the article's caveat:

Boston College researchers project that if the assets in state and local pension plans were frozen tomorrow and there was no more growth in investment returns, there'd still be enough money in most state plans to pay benefits for years to come

.


is even more significant? They aren't necessarily looking at decades, but instead, years.

That passage is there to demonstrate that even under extreme assumptions, most pensions have many years worth of assets to pay off liabilities. It's not a forecast.

 

[Samson]

But then don't you believe that the article's caveat:

Boston College researchers project that if the assets in state and local pension plans were frozen tomorrow and there was no more growth in investment returns, there'd still be enough money in most state plans to pay benefits for years to come

.


is even more significant? They aren't necessarily looking at decades, but instead, years.

That passage is there to demonstrate that even under extreme assumptions, most pensions have many years worth of assets to pay off liabilities. It's not a forecast.

No I agree with you, but wonder about the reality of "frozen plans," when in fact the "projected" assets decline, even a small amount.