The Pension Hole for U.S. Cities and States Is the Size of Japan’s Economy • Hacker News Board

Re: The Pension Hole for U.S. Cities and States Is the Size of Japan’s Economy

#11

Post by slededit » Mon, Jul 30, 2018, 9:12 PM UTC

pzone wrote: post #6

Comparing stock variables (Pension liability shortfall) vs. flow variables (GDP, a rate of annual output) is a mistake that peeves me to no end. That said, the pension shortfall is a disaster playing out in slow motion. We're just waiting for the hard cash constraints to bite - when they do it's not going to be pretty.

GDP comparisons are worthless, but cash flow to debt is an important metric. If it was compared to cash inflows of the actual government entity it would be interesting (and depressing).

Re: The Pension Hole for U.S. Cities and States Is the Size of Japan’s Economy

#12

Post by safgasCVS » Mon, Jul 30, 2018, 9:14 PM UTC

If I paid for WSJ and this is the low quality journalism I got I'd be peeved. This article barely touches on how it got to be so bad. Excuse me but no - a single paragraph stating the obvious 'benefits promised were too rich' doesn't cover it. How is it possible that a solvency ratio can drop from 100% to 75% in 18 years? This doesn't just happen because eh seemingly every pension administrator just decided. How much does WSJ cost again?

Re: The Pension Hole for U.S. Cities and States Is the Size of Japan’s Economy

#13

Post by sushid » Mon, Jul 30, 2018, 9:15 PM UTC

justaman wrote: post #4

Its funny that the government is as bad with money as the people. Truly a good representation.

It's nice for the previous generations that got something out of nothing.

Too bad that "nothing" is my generation and we'll be putting our "contributions" into a pit that will give us actually nothing in return when it's time for us to retire.

As I get older I realize why people say if you're not a liberal at 20, you have no heart but if you are not a conservative by 30, you have no brain (or something to that effect).

Re: The Pension Hole for U.S. Cities and States Is the Size of Japan’s Economy

#14

Post by torstenvl » Mon, Jul 30, 2018, 9:15 PM UTC

pzone wrote: post #6

Comparing stock variables (Pension liability shortfall) vs. flow variables (GDP, a rate of annual output) is a mistake that peeves me to no end. That said, the pension shortfall is a disaster playing out in slow motion. We're just waiting for the hard cash constraints to bite - when they do it's not going to be pretty.

But it's not a real comparison. It's just contextualizing.

If I say that a brachiosaurus was the size of a house, I'm not saying that your current dwelling is comparable to a 65-million-year-old pile of death and dust.

Huge numbers are essentially meaningless to the human mind. But "all economic output of Japan in a year" is something that most people can wrap their heads around a little more easily. We know it's a fairly rich, industrialized nation, and so therefore that's a crapton of money.

Re: The Pension Hole for U.S. Cities and States Is the Size of Japan’s Economy

#15

Post by eecc » Mon, Jul 30, 2018, 9:15 PM UTC

OTOH administrations have to deal with significant shortfalls due to corporate tax elusion, compounded by the interests paid to compensate for them (possibly and ironically the bond holders might be the same corporations whose tax money is missing.)

I wonder how significant that amount is. I’m a Scala jockey and I bookmark a totally different part of the internet, I'd love the input of someone who has a better idea of these numbers...

Re: The Pension Hole for U.S. Cities and States Is the Size of Japan’s Economy

#16

Post by zajd » Mon, Jul 30, 2018, 9:15 PM UTC

betterunix2 wrote: post #9

The choice is raising taxes, reducing spending elsewhere, or demanding workers give up the pensions they were promised. Somehow I doubt anyone is going to agree to pay more in taxes to cover pensions in their state or city. After all, why should the government keep its promises (especially if it means we have to pay for it)?

> Somehow I doubt anyone is going to agree to pay more in taxes to cover pensions in their state or city. After all, why should the government keep its promises (especially if it means we have to pay for it)?

I agree with it but then again I'm not opposed to paying taxes. Why shouldn't we provide for the retirement of our workforce?

Re: The Pension Hole for U.S. Cities and States Is the Size of Japan’s Economy

#17

Post by NTDF9 » Mon, Jul 30, 2018, 9:16 PM UTC

betterunix2 wrote: post #9

The choice is raising taxes, reducing spending elsewhere, or demanding workers give up the pensions they were promised. Somehow I doubt anyone is going to agree to pay more in taxes to cover pensions in their state or city. After all, why should the government keep its promises (especially if it means we have to pay for it)?

The government doesn't keep its promises because it is not required by law that they are held accountable for dubious lawmaking.

Put simply, representatives need to be on a personal financial hook (or penalty) for laws, rules and policies, even after they've exited office.

Re: The Pension Hole for U.S. Cities and States Is the Size of Japan’s Economy

#18

Post by oconnor663 » Mon, Jul 30, 2018, 9:17 PM UTC

maxerickson wrote: post #7

justaman wrote: post #4

Its funny that the government is as bad with money as the people. Truly a good representation.

The problem isn't really "bad with money", it's more "benefit from making promises that someone else has to try to fulfill".

Or from the perspective of someone who has to run for election:

Candidate A says, "We need to cut benefits now to make sure the pension has enough money in the future." Candidate B says, "No we don't." Everyone votes for Candidate B.

It's not like we accidentally elected people who don't value the long term. It's that voters don't value the long term when there's real short term money at stake.

Re: The Pension Hole for U.S. Cities and States Is the Size of Japan’s Economy

#19

Post by ilikehurdles » Mon, Jul 30, 2018, 9:17 PM UTC

safgasCVS wrote: post #12

If I paid for WSJ and this is the low quality journalism I got I'd be peeved. This article barely touches on how it got to be so bad. Excuse me but no - a single paragraph stating the obvious 'benefits promised were too rich' doesn't cover it. How is it possible that a solvency ratio can drop from 100% to 75% in 18 years? This doesn't just happen because eh seemingly every pension administrator just decided. How much…

>How much does WSJ cost again?

It cost Rupert Murdoch some part of $5billion when he bought Dow Jones for that price.

Re: The Pension Hole for U.S. Cities and States Is the Size of Japan’s Economy

#20

Post by spullara » Mon, Jul 30, 2018, 9:18 PM UTC

safgasCVS wrote: post #12

If I paid for WSJ and this is the low quality journalism I got I'd be peeved. This article barely touches on how it got to be so bad. Excuse me but no - a single paragraph stating the obvious 'benefits promised were too rich' doesn't cover it. How is it possible that a solvency ratio can drop from 100% to 75% in 18 years? This doesn't just happen because eh seemingly every pension administrator just decided. How much…

Cash accounting.