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

wsj.com

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

#21

Post by omegaworks »

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 choice is raising taxes, reducing spending elsewhere, or demanding workers give up the pensions they were promised.

Why is there a fourth option for banks and not for pensions? Why is Quantitative Easing left out of this discussion?

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

#22

Post by spullara »

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)?

You could increase the taxes on pensions to return them to sane levels.

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

#23

Post by ngould »

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…

Care to enlighten us pension finance non-experts on what the article misses?

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

#24

Post by Someone1234 »

justaman wrote: post #4

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

Both US Democracy and CEOs at large companies both have an adverse interest in short-term success, even at the cost of the long term.

This is why in both cases out-sourcing/privatization is popular. It shows a short term benefit, the long term is someone else's problem.

How can we expect politicians to care about the pension fund if the problem isn't going to materialize for tens of years pass the end of their term limit?

And if they were a "hero" and increased taxes to try and tackle it, they'd only get voted out next election, so someone else can come in, undo it, then spend all the savings.

In a theoretical Parliamentary Democracy, the "upper house," with lifetime terms would exist primarily for this function, consider the long term interests over the short term point-scoring. But no country that I know of can be described as having an effective upper house.

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

#25

Post by castlecrasher2 »

sushid wrote: post #13
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…

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

The same generation that mindlessly claims that millennials are spoiled while we field $10K+ medical bills for things like childbirth when they cost <$1K for them. I haven't seen any data to back this up but I suspect they're also far higher in diabetes diagnoses which is another reason our care costs so much more.

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

#26

Post by tasty_freeze »

The paywall prevents me from reading it, but the title makes me wonder. Does it claim that the per year pension deficit matches the entire economy of Japan, or are they saying the cumulative debt (which would accrue over decades) matches one year of Japan's economy?

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

#27

Post by jstewartmobile »

zajd wrote: post #16
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?

Boomers and their parents took out wayyy more than they put in. Whenever it has been time to pass the cup around for other groups, they haven't been what I would call generous. Look at the funding difference between Medicare and Medicaid if you want a feel for it.

Given all of that, I'm not too excited about propping-up their pension shortfalls.

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

#28

Post by rgcapozz »

sushid wrote: post #13
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…

As I get older I become more anarchist or socialist or syndicalist.

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

#29

Post by raincom »

oconnor663 wrote: post #18
maxerickson wrote: post #7

Earlier quoted context omitted.

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.

Pensioners, union members, and their families always vote for B. The people who care about the long term hardly form a solid block to elect the candidate A.

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

#30

Post by aurailious »

ngould wrote: post #23
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…

Care to enlighten us pension finance non-experts on what the article misses?

Laws were changed to intentionally weaken pension funds and then articles like this are funded to further destabilize trust in them.

Another way of saying it: rich people were unhappy they have to pay taxes.

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