131–140 of 253 posts
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)?
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…
Perhaps people feel overtaxed, not in absolute terms, but relative to the services provided? The US Gov collected approximately 3.3T in revenue in FY2016--more than $10,000 for every person in the country. By comparison, the Netherlands collected 255B Euros from a population of 17M, or about $17k USD per person (2016 figure, according to OECD statistics). Clearly, a much higher number at the federal level, but they h…
You need to go further however, as the vast budget deficit is ultimately an inflationary tax on the US people (we'll follow the Japan scenario, and debase the dollar to deal with it over time, hammering the standard of living). You can see that represented by the dramatic damage to the US dollar during the Bush deficit years, which simultaneously sent the dollar plunging, commodities soaring and all other nation GDP figures soaring (when priced in dollars).
Total spending is about $7.1 trillion, between Federal + State + Local. What kind of return are Americans getting for their $22,000(!) per year? An absolutely horrendous return, that's what.
The US state + local spending is like an entire extra Federal Government stapled on.
I'm not concerned with slashing spending as some are, I'm overwhelmingly concerned about using that spending effectively instead. There's vast progress to be had in focusing just on that.
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 not sure how much I trust these tax rates. My understanding was that government spending is roughly 33% of GDP here in the US. This was true when I was in undergrad, and it looks to be roughly correct today. https://www.usgovernmentspending.com/percent_gdp (not sure how much I trust this site, but it corroborates what I learned in undergrad with only a few minutes of googling). This means that the tax rate must b…
Earlier quoted context omitted.
> I don't cause the government to write its contract with me to be the way it is. It's negotiated between my union and the state Department of Education. Exactly. So one group of state government employees (your state's DoE) meets another group of state government employees (your union) and decide to give each other an incredible defined-benefit pension deal that nobody outside of government can even dream of . State…
Pensions are not inherently unsustainable. They exist in the private sector in other countries and there are still some well funded private sector pensions in the U.S. They don't work well if they are not properly funded. Corporations got rid of pensions not because the concept is inherently unsustainable but because it's more profitable to do away with them. My pension plan is not a good one. You characterization of…
Please read the link I posted above:
https://www.investopedia.com/articles/retirement/10/demise-d...
Defined Cost pensions are sustainable. That's what we in the private sector have: 401k and Roth.
Defined Benefit pensions aren't sustainable. That's why nobody outside of government has them, and the ones sponsored by the government suffer huge deficits and are slowly but surely edging towards bankruptcy.
Earlier quoted context omitted.
> The problem is public sector employees are promised pensions higher than county/city can afford. Precisely. But in fact, it's worse: The people doing the promising and those receiving the benefits are in fact the same. Who makes the promises? Local and state government employees. Who receives the benefits? Local and state government employees. Who pays for them? Us ordinary taxpayers who can only dream of such swee…
I'm a public employee. I don't cause the government to write its contract with me to be the way it is. It's negotiated between my union and the state Department of Education. It is then voted on by the legislative branch and signed by the governor. It's a long process. At no point am I or my fellow workers the ones making the promises. It costs money to run government. Employees need to be paid. We have had lay offs…
Teacher unions are also responsible for keeping bad teachers employeed. See NYC rubber rooms.
Earlier quoted context omitted.
Does stability in retirement add enough value to society and the economy for it to be a good investment? I've been an adult less than a decade, so without a return why should I pay for the promises of my predecessors? So many questions.
I actually think the answer is simpler and more immediate than that. The government made a promise. If the government does not keep that promise, can it be trusted with other obligations? In fact, this problem of unfunded pensions has impacted municipal credit ratings and wound up costing taxpayers more in higher interest rates than they would have had to pay in higher taxes to stabilize the pension funds.
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)?
But even when a city says to unionized workers, you can keep your pension but new hires get moved to a 401k, the unions say no. See San Jose as an example
The other thing to keep in mind is that the problem is not merely that future pension obligations for new hires might not be funded. In some cases the problem is immediate or very near-term -- pension funds have become so depleted in some states and cities that retirees may not receive their checks, and in some cases people have been forced to accept less than they were promised (see the article for examples).
Earlier quoted context omitted.
I'm a public employee. I don't cause the government to write its contract with me to be the way it is. It's negotiated between my union and the state Department of Education. It is then voted on by the legislative branch and signed by the governor. It's a long process. At no point am I or my fellow workers the ones making the promises. It costs money to run government. Employees need to be paid. We have had lay offs…
> I don't cause the government to write its contract with me to be the way it is. It's negotiated between my union and the state Department of Education. Exactly. So one group of state government employees (your state's DoE) meets another group of state government employees (your union) and decide to give each other an incredible defined-benefit pension deal that nobody outside of government can even dream of . State…
We are all to blame (if you are older than about 25).
Collectively, we have known the pensions are unsustainable for at least the last 40 years.
Yet we have refused to face the problem head on and vote in people who will fix it. Instead we push the problems onto the next generations.
Earlier quoted context omitted.
> The problem is public sector employees are promised pensions higher than county/city can afford. Precisely. But in fact, it's worse: The people doing the promising and those receiving the benefits are in fact the same. Who makes the promises? Local and state government employees. Who receives the benefits? Local and state government employees. Who pays for them? Us ordinary taxpayers who can only dream of such swee…
The people doing the promising are the same as those receiving the benefits. That's the key point. Budget broken so we can't pay for something? Let's talk about putting money in. Systemic problem where the people making decisions about spending the money are the same people receiving benefits? You can't write a check to fix that. This isn't a traditional "how much do we tax and what do we spend our money on?" public…
There's simply no reason to believe that throwing more money at these systemic problems will fix them. In fact, it may well exacerbate them instead.
Earlier quoted context omitted.
> The problem is public sector employees are promised pensions higher than county/city can afford. Precisely. But in fact, it's worse: The people doing the promising and those receiving the benefits are in fact the same. Who makes the promises? Local and state government employees. Who receives the benefits? Local and state government employees. Who pays for them? Us ordinary taxpayers who can only dream of such swee…
I'm a public employee. I don't cause the government to write its contract with me to be the way it is. It's negotiated between my union and the state Department of Education. It is then voted on by the legislative branch and signed by the governor. It's a long process. At no point am I or my fellow workers the ones making the promises. It costs money to run government. Employees need to be paid. We have had lay offs…