California Teachers' unfunded pension increases to $73.7 billion (income, income tax)

[Tulemutt]

Originally Posted by lvoc

You are trying too hard. There is actually no real need to pay off the debt in any particular time frame. If there is sufficient income to cover the cost of the interest you can leave it like it is forever.

Precisely true and exactly as desired and structured by the people who make our lives possible under the present system. Neither commodities nor precious elements nor production from labor are foundational anymore. Debt is. and we would implode now without it.

People are rubes. Politicians are tools. Bankers are kings. And we are not supposed to ever pay off debt. Debt is how money is created. It is undesirable for society to pay off its debt at this point. We need the new money debt creates or we die.

[nslander]

Originally Posted by Tulemutt

Precisely true and exactly as desired and structured by the people who make our lives possible under the present system. Neither commodities nor precious elements nor production from labor are foundational anymore. Debt is. and we would implode now without it.

People are rubes. Politicians are tools. Bankers are kings. And we are not supposed to ever pay off debt. Debt is how money is created. It is undesirable for society to pay off its debt at this point. We need the new money debt creates or we die.

Such simple and undeniable truths, but met with impenetrable resistance.

[SportyandMisty]

Originally Posted by ExeterMedia

lol, yes. Let's keep taxing homeowners for unfunded teacher pension liability. That's the ticket.

I share your frustration. But the money has to come from somewhere. Seriously -- what do we do if not this?

[SportyandMisty]

Originally Posted by Tulemutt

You do realize though that modern economic systems are not designed to ever pay off debt. It would literally destroy the economy as we have come to allow it to be.

Pure hyperbole.

There is an argument about national debt always existing, but this isn't about the national debt. This is about a real, tangible local debt. Paying off local debt would in no way destroy anything except a drag on the local economy.

[SportyandMisty]

Originally Posted by lvoc

You are trying too hard. There is actually no real need to pay off the debt in any particular time frame. If there is sufficient income to cover the cost of the interest you can leave it like it is forever...

Technically, I think you're right. BUT, there is an issue of fairness -- the debt has been incurred (in some sense) by people of our generation (we're roughly contemporaries). By leaving the debt on the books forever, we are passing that debt on to our children & grandchildren -- and they will have their own spending priorities curtailed to pay off the debt we leave them when we're 6 feet under.

Originally Posted by lvoc

... What we really need to avoid is the open ended commitment. That is what killed the auto industry and any number of other things. Maybe what we need is truth in accounting. We need to make politicians or business executives stand up and admit what they committed to...not launch a time bomb that gets us 20 years down the road. NPV? Sure but how does one explain NPV to the unwashed?

It appears to be a very intractable problem. We basically reward people for screwing up long term.

I agree completely.

Back in the 1960s, there were several bankruptcies of large corporations such as American Motors, US Steel, LTV, and numerous others, where retirees lost almost all their pensions. In response, Congress passed the The Employee Retirement Income Security Act of 1974 (ERISA) which, among other things, mandated minimum standards for private pensions such as actuarially sound accounting & appropriate financial statement treatment of pension obligations.

At the time in the early 1970s, the drafts of ERISA covered not only private sector pensions, but also state & local pensions. The American Federation of State, County and Municipal Employees (a public sector union) responded by lobbying HARD & with large campaign contributions to exempt all public sector unions from being covered by ERISA requirements (specifically, the "truth in accounting" as you call it). The National Education Association (a public sector union) and the American Federation of Teachers (another public sector union) joined in the lobbying.

Why did they want to be exempt from the truth in accounting? In hindsight, the reason is obvious. If, starting in 1974, State & Local Governments (including school districts) were required to correctly fund pension obligations, there would have been less $$$ available for raises (remember back then inflation was a major issue, Nixon had already tried wage & price controls, etc)

For the same reason, state & local government employee unions do not want truth-in-accounting today. For a similar reason, local politicians do not want it either -- if it were in place, their hands would be tied with respect to some spending -- and nothing pisses off a politician more than not having the freedom to spend on their own priorities.

[Tulemutt]

Originally Posted by SportyandMisty

Pure hyperbole.

There is an argument about national debt always existing, but this isn't about the national debt. This is about a real, tangible local debt. Paying off local debt would in no way destroy anything except a drag on the local economy.

It is not hyperbole even at the local level. Not when the dollar amounts are so large and the public infrastructure is at the root. What is desirable for individuals seeking personal financial freedom and independence and security is NOT desirable for the macro-economic machine that supports our culture.

The banker personas have created themselves an unbeatable position and system over the generations. Very clever. But I do not suggest they are the enemy or it's a conspiracy. Living as we do economically is simply the cost we pay for the culture and lifestyle we exist in. We'd be living in caves or tiny agricultural village economies at best without our present system. I don't mind this life as we live it one bit. I'm having a great time. And no I don't have a big pension. Just a blue-collar working shmoe retired modest on what I was able to stash away. Which ain't much.

Most people are struggling under the illusion that they are having their money stripped away from them. Fact is: it's not your money. You never owned it to begin with to have it taken from you. People are deluded to think they earn the money shown on paper before taxes and interests are deducted.

[SportyandMisty]

Originally Posted by Tulemutt

It is not hyperbole...

Yes it is. This is fun. Your turn.

[Tulemutt]

Originally Posted by SportyandMisty

Yes it is. This is fun. Your turn.

No. It's not. Backatcha. I'm all about fun. And fishing.

[ExeterMedia]

Has anyone mentioned a "one" time tax levy against home owners? Pretty sure that's the swiss army knife of the liberal arsenal when it comes to debt obligations.

[SportyandMisty]

Originally Posted by ExeterMedia

Has anyone mentioned a "one" time tax levy against home owners? Pretty sure that's the swiss army knife of the liberal arsenal when it comes to debt obligations.

At the end of the day, this debt exists. What do we do?