Posted on 08/20/2010 12:26:09 PM PDT by Poundstone
Taxpayers must cover at least a third of a $3 trillion bill for public employee pensions even if lawmakers eliminate cost-of-living increases and raise the retirement age, according to an academic study.
“Even if states uniformly eliminated generous early retirement deals and raised the retirement age to 74, the unfunded liability for promises already made would still be more than $1 trillion,” Joshua D. Rauh, associate professor of finance at Northwestern University’s Kellogg School of Management in Evanston, Illinois, said in a statement.
(Excerpt) Read more at kellogg.northwestern.edu ...
How about concessions. If we have to spread the wealth, let them also spread the pain. This is NUTS!
They need a structure for state and local governments to go through orderly bankruptcy, by which the ridiculous government pension promises will be cut. The cost will be the state and local governments being less able to sell debt in the future—unless the bondholders are made whole through the process.
I don’t think the author understands the word “must”.
Taxpayers MUST?! I’ll be goshdamn....... =.=
If that becomes policy I will stop paying taxes.
“Entering a Death Spiral? Tensions Rise in Greece as Austerity Measures Backfire”
http://www.spiegel.de/international/europe/0,1518,712511,00.html
“austerity” for us, but not the goobermint class.
I think this is an issue that ultimately may hinge on the specific wording of individual state constitutions. From what I’ve read, the pension obligations of some states have some “wiggle room,” allowing those states, potentially, to get out of the obligation. Other states’ constitutions are written in such a way that pension obligations are inviolable contracts which may not be extinguished even by the state declaring the equivalent of bankruptcy.
What I’m saying here is that if you can move to another state, select a state that doesn’t have much of a pension overhang to pay off.
I live in Virginia.
“Taxpayers must cover at least a third of a $3 trillion bill for public employee pensions”
Only if the public employees are among the living.
“Thank God I’m a federal (not state) retiree.”
I would not feel so comforted. Did you know that federal pensions are entirely unfunded? Although the federal government contributes 11.2% for the pension, the money is just spent on current government programs (including retirement income for federal retirees). We will reach a day of reckoning on federal spending including federal pensions, Social Security, Medicare, Medicaid, and many other programs. The era of free government money is coming to a close.
Repeat Offender says "no." Who wants to don kevlar and play chicken?
Weimar Germany
"As an apprentice painter Wilhelm found himself making more and more money as wages increased during the early 1920�s. Unfortunately those Reichsmarks would purchase less and less as time went on. My grandfather told me that at one point he made RM1,000,000 a day, an amount that was paid daily. One million Marks, it turned out, was enough for his lunch on the job site, and then to buy food for dinner for himself, his father, and his sister. Nothing else.
His father, Edward, had found by this time that the buying power of his pension was drastically reduced.
There was labor unrest among the railroad workers, and one of their demands was for the total lifetime pension to be paid as a single lump sum. Eventually this was done, and my great-grandfather discovered that his total pension was sufficient for dinner for the three of them at a restaurant. So much for his pension.
Early in 1923, the family decided that my grandfather was to emigrate to the United States. In the U.S. he could find work and the money would be worth something. He had a childhood friend in New York State who could meet him when he got off the boat. Somehow the money was found and Wilhelm took the train to Rotterdam to begin his journey to the New World.
My grandfather had a large box of money with him on the train. To his surprise, after buying the ticket he actually had money left over! But what should he do with the extra money? My grandfather realized that Reichmarks would be worthless in the U.S., so he decided to pack the money up in another box (�larger than a shoebox,� he said) and mail it home to his father. However at the central Post Office in Rotterdam he was disappointed to be told that the postage on mailing the box of money to Germany was as much as the box of money itself!
So with the box of money under his arm, my grandfather stepped out of the Post Office into the city square in Rotterdam. He said it was a bright Spring day and a clock was chiming the hour. Just then the square filled with children as their school day ended. On an impulse my grandfather opened the box and began throwing the money into the air! How my grandfather would laugh and his eyes twinkle as he described the squeals and shouts of the children! How they scrambled for the worthless German money floating in the air! At least for a moment, it was good for something.
Moral to the Story.
I believe that the story of my grandfather during the Weimar inflation has several morals. One is that inflation punishes economic virtue. My grandfather�s family had income-producing property and a pension, but the income from both was destroyed by the debasement of the Reichsmark. Thrift and financial planning came to nothing. Also the inflation destroyed the value of hard work, as the earning power of my grandfather decreased even as the nominal value of his earnings ballooned."
Now, you have noticed that all state debts have increased, say the last 20 years. And were they not boom times? So, if the Republicrats could not find money to pay debts during 'good times', what makes you think they will now, or in the near future? Honest bet? They won't. So, the debts will continue until collapse, or they are like Weimar Germany,or ten years ago in the Soviet collapse with their pensioners, paid in junk money.
Sure he’s gonna say this...he’s on the government PENSION roll!
hmmm...looks like there is not complete agreement on that theory:
http://market-ticker.org/archives/2589-More-Ill-Noise-And-Other-States-PENSIONS.html
FYI
Well, at least I have the comfort of knowing that if my federal pension is inflated into oblivion, everyone will be in the same boat!
(although I also note my pension has automatic COLA coverage as well).
No, Daisyjane, that article is in full agreement with my theory. In fact, I read that article last week.
The article asserts that Illinois doesn’t have a contractual obligation to pay state pensions.
I simply note that this assertion, and the entire article, pertains to the state of Illinois only. My suggestion to fellow Freepers is: check out whichever of the 49 other states you have an interest in, to see what their pension obligation pension is, and what their state constitutions say.
Difference between state and federal, evidently.
That said, I wonder where the SCOTUS decision (of some years ago) that claims the gov’t has no legal obligation to pay SS benefits comes in. (?)
Good grief, what a mess we’re in.
Smirk all you want , we’ll give you your pound of flesh in worthless US Federal Reserve Notes ... While we earn our money in “New Dollars”. I sure hope you prepared by saving on your own,,, should have been easy for you as we paid you double what your worth for all those years and covered all your healthcare expenses.
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