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

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

#91

Post by ProfessorLayton »

sp332 wrote: post #50
abledon wrote: post #31

How much money does one need to live in retirement? If they are doing daily exercise(1-2hr), cut out most processed foods and sugar , no alcohol , cook all their food from scratch using cheap staple ingredients , entertain themselves with books , community , local events and cut out expensive vacation plane trips (only an invention of the past century). An ‘uncomfortable’ lifestyle shift but doable for a human. [edit…

The point is that these people worked under a contract that promised them a certain pension for a certain amount of work. Even if the amount was unrealistically high, reneging after the person has put in all the work is basically fraud, or theft of wages.

While you're right about the broken promise amounting to being defrauded, a similar argument could be made about tax payers who will be responsible for picking up the tab (Millennials, Gen Z etc.): They're going to have their wages taken for promises they never made in the first place, while also not having the same benefits enjoyed by those that came before them.

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

#92

Post by rayiner »

kodablah wrote: post #79
sykhic wrote: post #33

Overal taxation in the U.S. is low compared to other OECD countries [1]. We, as a nation, decided that low taxes was the goal. As a result infrastructure is poor, toll roads are increasing, privatization of prisons, intelligence gathering, war, etc. are rising too. Yet Americans falsely believe they are overtaxed. The situation is easy to fix in economic terms but not in political terms. The road to an Ayn Randian pa…

I'm always dismayed here and elsewhere to see everyone assuming that collection is the problem, not the dispensing and management. If someone proves incapable of proper budgeting, surely it is foolish to want them to have more money? Always sad that it's everyone but the policy and budget makers being blamed for the failures of policy and budget making. You can argue an honest politician can't survive, but you should…

As someone who supports higher taxation, I've come around to the idea that liberals and conservatives are largely talking past each other on this point. Yes, our taxes are too low (if we want to have the kind of welfare state Sweden or Germany have). Yes, our public sector is particularly inefficient, compared to Sweden or Germany (or France or Canada).

In my experience your average voter who opposes higher taxes isn't a Randian. Rather, they feel like they're not getting enough in return for what they pay in taxes. (And when you look at data about how we spend more to get less in education, transit, etc., turns out they're right!)

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

#93

Post by sykhic »

ars wrote: post #74
sykhic wrote: post #33

Overal taxation in the U.S. is low compared to other OECD countries [1]. We, as a nation, decided that low taxes was the goal. As a result infrastructure is poor, toll roads are increasing, privatization of prisons, intelligence gathering, war, etc. are rising too. Yet Americans falsely believe they are overtaxed. The situation is easy to fix in economic terms but not in political terms. The road to an Ayn Randian pa…

I didn't realize US taxes were so high in comparison to other countries. You are looking at the wrong table. Look at the next table instead and see just how high the US is relative to other countries. The only thing we don't tax is goods, but that's to help lower income people - the same people you want to help.

The next table (the one below, right?) shows only the relative percent of where taxes come from. It does not describe tax rates. It merely states that around 50% of U.S. tax revenue come from taxing income and profits. This is not the tax rate on that source.

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

#94

Post by gok »

dunpeal wrote: post #78
gok wrote: post #64

Earlier quoted context omitted.

That is not the issue this article is talking about. Public pension spending in the US is not especially low compared to the rest of the OECD [1]; as a portion of GDP it's larger than Norway or the Netherlands, which have much higher taxes. The issue is that those pensions have been comically mismanaged; edit: and were not sustainable in the first place [1] https://data.oecd.org/socialexp/pension-spending.htm

Defined-benefit pensions are economically bankrupt when lifespan keeps increasing. This has been known for decades[1] and is the reason why none of us reading this have a DB pension, except those lucky few state employees who got a sweetheart deal all those years ago. Of course, the fact these pensions were managed by state government (read: mismanaged) only accelerated the inevitable crisis. [1] https://www.investop…

These plans wouldn't have worked even if lifespans remained the same. Indeed, US life expectancy is actually down recently.

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

#95

Post by ThomPete »

sykhic wrote: post #33

Overal taxation in the U.S. is low compared to other OECD countries [1]. We, as a nation, decided that low taxes was the goal. As a result infrastructure is poor, toll roads are increasing, privatization of prisons, intelligence gathering, war, etc. are rising too. Yet Americans falsely believe they are overtaxed. The situation is easy to fix in economic terms but not in political terms. The road to an Ayn Randian pa…

Taxes are pretty high in the US for the upper middle class especially.

IMO corporations should be taxed in a way that the more they make with fewer people the more they get taxed relative to other companies who make the same but have more people.

Productivity in the age of digitalization is not what it used to be and I don't think it's a good way to measure anymore as we have way more supply than we have demand.

Today it's more about technology leverage.

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

#96

Post by justaman »

rgcapozz wrote: post #28
sushid wrote: post #13

Earlier quoted context omitted.

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.

[flagged]

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

#97

Post by betterunix2 »

justaman wrote: post #4

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

I do not think it is quite as simple as that. Pension funds often invest in bonds because they provide reliable cash flow, but for the past 30 years bond yields have been falling, to the point where 3% on a 10-year treasury is considered big news today (it was much lower just a year ago). For the past 10 years interest rates have been kept artificially low as part of the response to the great recession, but pension funds have still had to make their payments.

Retirees are also living longer thanks to advances in healthcare. It would not have been easy to predict those longer lifespans decades ago when they were first promised their pensions, but the pension still has to keep paying as long as they live.

None of this is to say that governments have no share in the blame for this. Failing to take action to stabilize these funds, or worse, cutting taxes when the money could have been used to help keep the funds solvent, was a bad decision too many states made.

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

#98

Post by dunpeal »

ars wrote: post #83
vuldin wrote: post #66

This is a good example of the type of debate that well-meaning, thoughtful people decide just steer clear of due to the (lack of) perspectives of the majority of those currently taking part in the conversation. The United States spends the better part of a trillion dollars per year on its military. A relatively small fraction of that would solve any issues their social welfare programs currently have. It's a matter o…

> A relatively small fraction of that And what would you do with the large number of unemployed people that would result? You can't just change one thing and ignore any consequences. And don't forget that the broken window fallacy only applies to economies where everyone is working full time. If they are not then it does not apply, and your analysis needs to be more thorough.

> And what would you do with the large number of unemployed people that would result?

US demand for labor is at an all time high.

They can find employment in the private sector and produce goods and services that benefit others.

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

#99

Post by kodablah »

rayiner wrote: post #92
kodablah wrote: post #79

Earlier quoted context omitted.

I'm always dismayed here and elsewhere to see everyone assuming that collection is the problem, not the dispensing and management. If someone proves incapable of proper budgeting, surely it is foolish to want them to have more money? Always sad that it's everyone but the policy and budget makers being blamed for the failures of policy and budget making. You can argue an honest politician can't survive, but you should…

As someone who supports higher taxation, I've come around to the idea that liberals and conservatives are largely talking past each other on this point. Yes, our taxes are too low (if we want to have the kind of welfare state Sweden or Germany have). Yes, our public sector is particularly inefficient, compared to Sweden or Germany (or France or Canada). In my experience your average voter who opposes higher taxes isn…

> our taxes are too low [...] our public sector is particularly inefficient

Right. You cannot begin fixing the first problem in a democracy until you begin fixing the second. The solutions cannot happen in parallel either. So we either need to better prioritize our complaints or accept that attempts to fix the first problem is often just flushing people's money that they may need. Perfection is not a requirement, just some level of mediocrity could be enough to restore some trust.

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

#100

Post by sykhic »

kodablah wrote: post #79
sykhic wrote: post #33

Overal taxation in the U.S. is low compared to other OECD countries [1]. We, as a nation, decided that low taxes was the goal. As a result infrastructure is poor, toll roads are increasing, privatization of prisons, intelligence gathering, war, etc. are rising too. Yet Americans falsely believe they are overtaxed. The situation is easy to fix in economic terms but not in political terms. The road to an Ayn Randian pa…

I'm always dismayed here and elsewhere to see everyone assuming that collection is the problem, not the dispensing and management. If someone proves incapable of proper budgeting, surely it is foolish to want them to have more money? Always sad that it's everyone but the policy and budget makers being blamed for the failures of policy and budget making. You can argue an honest politician can't survive, but you should…

I agree that it's largely a crisis of leadership. Both major parties are to blame. Kicking the can down the road, so to speak, has proved politically rewarding. I think that we, as a people, need to stop thinking that taxation is inherently bad. Taxation with incompetent governance is inherently bad. Taxation with little in return is bad. But taxation itself is not bad. Nor are we overtaxed in absolute terms. We are overtaxed in terms of return from government.

I certainly don't advocate throwing money at the situation. I advocate that as a nation we take a step back on reassess what our views on government are. We've largely bought into the false beliefs that government is always incompetent, government regulation is inherently bad, and taxation is bad. I don't see how to get out of the mess we are in. These are structural problems in the nation and I think secession is going to occur in the next 50 years or so.

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