[cttransplant85]

Originally Posted by BobNJ1960

States will a some point soon shift to 401Ks, most likely not long after Illinois becomes first to be insolvent.

It's going to be a tight race between CT, NJ and IL for who becomes the first to be insolvent. The federal bailout fight is going to be UGLY in the senate. No way the 40+ fiscally responsible states sign up to bail out the handful of irresponsible ones.

[BobNJ1960]

Originally Posted by cttransplant85

It's going to be a tight race between CT, NJ and IL for who becomes the first to be insolvent. The federal bailout fight is going to be UGLY in the senate. No way the 40+ fiscally responsible states sign up to bail out the handful of irresponsible ones.

nor should they

[GeoffD]

Originally Posted by cttransplant85

It's going to be a tight race between CT, NJ and IL for who becomes the first to be insolvent. The federal bailout fight is going to be UGLY in the senate. No way the 40+ fiscally responsible states sign up to bail out the handful of irresponsible ones.

In a big economic downturn, there are way more than 10 states that will have huge problems. When you look at state and local debt to GDP ratio, Kansas is #1. South Carolina, Kentucky, and Alaska are top 5. New York is the only traditional blue state in the top 5. It’s not like Kansas is going to grow their way out of their debt problems. They’re facing a crushing tax hike to pay the bill.

[MrGompers]

Originally Posted by GeoffD

In a big economic downturn, there are way more than 10 states that will have huge problems. When you look at state and local debt to GDP ratio, Kansas is #1. South Carolina, Kentucky, and Alaska are top 5. New York is the only traditional blue state in the top 5. It’s not like Kansas is going to grow their way out of their debt problems. They’re facing a crushing tax hike to pay the bill.

What's sad is some politicians in CT want to follow the same path as Kansas. That's insane. We already have the results. No need to experiment again.

[BobNJ1960]

Originally Posted by cttransplant85

It's going to be a tight race between CT, NJ and IL for who becomes the first to be insolvent. The federal bailout fight is going to be UGLY in the senate. No way the 40+ fiscally responsible states sign up to bail out the handful of irresponsible ones.

like the battle my Mets and Marlins are engaged in-who can avoid last between Ct, Nj, & Il for pension induced bankruptcy.

[GeoffD]

Originally Posted by BobNJ1960

like the battle my Mets and Marlins are engaged in-who can avoid last between Ct, Nj, & Il for pension induced bankruptcy.

Nah. The thing that will crush states is Medicaid and funding poor school districts. Look at the budget. Those are the 800 pound gorillas. In blue states, the bottom 25% consume the majority of state spending. Red states let their poor areas collapse and have very stringent Medicaid systems. If NJ or IL adopted Alabama public policy for poor people, they wouldn’t have budget problems. Rewind to 1960. Of course, then you’d rewind to cities burning from race riots.

[BobNJ1960]

Originally Posted by GeoffD

Nah. The thing that will crush states is Medicaid and funding poor school districts. Look at the budget. Those are the 800 pound gorillas. In blue states, the bottom 25% consume the majority of state spending. .

Ct let state unions crush them, just like Il and NJ.

Had we substituted 401ks for gov't staff instead of pensions, and private sector employee share of Health Care vs the state emps golden plans, we would have lower taxes, more growth, and fiscal solvency.

[Lincolnian]

The 401k is not the save all solution. Many economists and analysts are just now starting to acknowledge that the mass inflow of money into 401k plans is creating a problem since the passive investment money flows are all chasing the same group of stocks inflating their worth and adding huge risk to the market.

In the past, private pension plans had a larger local investment in projects, investments, and municipal government-backed instruments. This provided more stable returns for their pension plan as well as allowing more long-term investment in infrastructure and local development projects. It was a win-win.

The 401k investment plan as a retirement plan becomes more risky as more people participate. In the short-term it does push the problem off the states but in the long-term it places greater risk on the state when the plan is unable to provide sufficient funds necessary to support the retirees.

[JayCT]

As I have noted here, Connecticut has one of the lowest fertility rates in the country. This contributes greatly to the low population growth our state has experienced. The same thing is happening across New England. Jay

https://ctmirror.org/2018/07/29/conn...05f55-68207705

[BobNJ1960]

Originally Posted by Lincolnian

.

The 401k investment plan as a retirement plan becomes more risky as more people participate. In the short-term it does push the problem off the states but in the long-term it places greater risk on the state when the plan is unable to provide sufficient funds necessary to support the retirees.

There is no long-term risk to the state as an employer. It is a defined contribution plan, not a defined income stream plan, for the employer.

The employee draws from it from value it has, but no more, at retirement.