Posted on 02/26/2009 10:15:59 AM PST by SmithL
Did you know that the various state, districts, counties, cities, etc have something like $500b in uninsured deposits in these self same big 4 banks?
Now you know why Hussein and his henchmen are trying anything to keep the big 4 banks from declaring bankruptcy to the tune of $2-4t in losses(they are already insolvent).
Anybody with a either a 401(k) or pension can expect a big fat -0- in pretty short order. And don't think S/S is going to pick up the slack - when the sovereign wealth funds stop buying our Treasuries, the central gov't itself basically collapses.
Oh, puhleeze. You're just digging deeper into craziness.
... retirement rights were already earned.
Bull puckey!
"Retirement rights"... WHEW!
You didn't know that?
Concerning where private retirement funds are kept invested, check US Bonds and other US securities.
There's no mad conspiracy going on there ~ the fact is Obama himself is rather stupid, woefully undereducated regarding anything outside a narrow piece of law, and he's unable to attract first-class talent to his cabinet or to the sub-cabinet positions in the agencies.
Compounding all of those deficiencies the guy has no sense of scale or proportion.
I already said it could be changed *prospectively* to which you disagreed.
*Prospective* employment benefits, or those that attach to *prospective* time worked, are *not* vested.
They can, and should, be changed.
No, we're not -- nor was John Chiang. He is talking about the liability associated with health benefits for current and prior employees. Do you know what an unfunded liability is?
When it comes to California, many of its muncipal authorities neglected the downstream costs when they set up their retirement systems.
The risk to the retirees is that the town or school district simply goes bankrupt ~ which is possible.
I think you are of the impression no one has gone through this stuff before. The state of Virginia where I currently reside had 100% of its counties, cities, public school systems and any other government agencies go bankrupt during the Great Depression.
Currently Virginia has a system where every incorporated city in the state is ALSO a county. The state takes care of almost all the roads ~ no county road crews. The state even takes care of sidewalks. The state budget regularly contains money to equalize public education benefits per pupil throughout the state.
Closest system to the Virginia system is Hawaii. Before this Obama Depression is over I bet California look a lot more like Virginia and Hawaii than it does the mess you have there today. You'll continue to have the same budget battles as before, but the ongoing expenses of the state will be better understood by the public.
"Local control" is an overrated and expensive concept for government services.
I think it's going to look a lot more like Haiti, myself.
Just National City and 2nd and 3rd streets in LA maybe ~ Berzerkly will continue to look like Berzerkly, but will slowly turn into California’s third large “China Town” as the graduates begin settling near their university laboratories.
What Chiang is recommending here is not new. It was suggested by the Legislative Analyst’s Office (Elizabeth Hill) several years ago. It has been researched, extensively. Among the recommendations were to 1) Start weaning off the pay-as-you-go system by establishing a fund, as Chiang suggests (to stop deferring the liability to our grandchildren) and 2) to change a 2-tiered benefit system, cutting back on benefits.
Tier 1 would include any of those covered by existing employment contracts or for the vested portion of the benefits. The second tier would deal with employment benefits on a prospective basis, on a scaled down basis. This has been done by hundreds if not thousands of companies and s starting to be done in local government. It simply MUST be done because the existing structure in California is unsustainable.
As to a contract being a contract, true. But a typical employment contract does not guarantee employment for life. Nor does it guarantee pay raises ad infinitum nor benefits ad infinitum. Heck, GM was successful in negotiating with the UAW to scale down their retiree health benefits. There is no reason California cannot do it, too.
Of course the rest of the management team at the Union as well as at GM deserved such treatment themselves.
Now, concerning a large entity such as California maintaining an investment fund to pay future health insurance costs ~ if they'd had such a fund in September it'd lost 60% of its value in November if all they had done was followed "recommended best practices". California would still be on the hook for the costs.
Okay, so under your short term logic, no person, state, company, or other should ever invest for fear there will be a decline in market value of their investments.
Do you keep your money under your mattress?
Shall we abolish all pension funds?
"Best practices" mean one thing in normal times. They mean something else in abnormal times.
We must be able to adapt to conditions.
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