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Old 04-07-2016, 12:24 PM
 
5,227 posts, read 2,312,952 times
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We live in a big system, we modeled things for so long based on the million dollars as a base factor, things moved on to billions, and we still modeled it on Millions, now it is equated in Trillions, and we focus on it with a mindset still rooted in the million dollar mentality base.

We have to see this in terms of what is "Global Value" when factored, as now things are in the high Billions and double digit Trillions. Single individuals have 10's and 100's of millions, homes for some going for 10's and 100 million, and we have companies buying and selling each other for multiple billions, even when the company does not produce a physical product.
We see people building sports Stadiums and spending billions to do so.

The relative " base of figures" has changed.

All these elements changed drastically, when we engaged in multiple wars of foreign soil, where we began to spend money in 10's and 100's of billions and ramped up the expense into the Trillions, actually the spectrum became double digit Trillions.

We see sports teams giving people contracts for 100's of millions, but we still want to think in terms of millions, and as average citizens we still think in terms of 100's of thousands.
When fact is, now houses for the average hit the 100's of thousands mark more than decade ago, which means, even a family with a home and two cars, racks up 100's of thousands.

Point being, on a Nation Scale, weighted against a Global SYSTEM, our debt is not as outrageous as the smaller minds of the million dollar mentality thinks.

They now pay, actors who do TV commercials, millions for commercials, brand endorsement and such.

We the people on average are paid in the lower 10's of Thousands a year, when the Degree riders go from the high 10's to the 6 figure 100's of thousands.

So all elements on the spectrum change.

This is another reason the society should not be tripping about $15 an hr wage, when reality truly is that number is still insufficient to meet the "promoted american dream image", for example, Take the "Lifetime Channel" movies, one can't live in the average environment they portray in their film, without a very good 6 figure income in the household. But that is the image promoted as the ideal American environment.

Today, just a Cell Phone and Internet Access, is far more than people use to pay a month for a house payment, now these things are considered in many parts of society as incidental necessities, somewhat as a basic utility.

We have to open our minds to the "Value Factor of How we equate the concept of National Debt", then a lot of factors become more clear.

Our mission may well need to make sure we cut off and stop the "offshore hiding of money", so it circulates within this nation, then - many things change and move toward meeting the "$value concept" and we come to understand better the volume of expense and the debt and the potential of what money movement within our nation can do to bring some measures which make it easier for us to digest the debt figures.

It is very likely that this nation can carry a 100 Trillion of Debt and still function very well.
We forget, that more than 50-60-100 Trillion vanished between 2000-2008. These are Trillions still floating around in the atmosphere in some form or fashion, even that which was wiped out, it represented something, even if that something was a "mentality framework".
This country will not go Bankrupt.... Now, we may run into Fresh Water issues, long before we run into being insolvent due to debt.
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Old 04-07-2016, 12:27 PM
 
633 posts, read 462,254 times
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Quote:
Originally Posted by Dd714 View Post
The public pension issue will solve itself. Simply enough, public employees will face the reality that private sector employees have already faced - losing pensions even when one was guaranteed. Governments simply will not pay them. If the teachers and police officers currently working think they will get a (non self funded) public pension in 10 or 20 years, think again. It's already solving itself in fact, hefty government funded pension plans paid at the expense of the taxpayer is primarily a thing of the past, replaced by 401k-style programs, wheather the public unions like it or not...it's simply not sustainable.
Can't speak for any state but mine, but pensions at the state level are constitutionally guaranteed. The state is mandated by the PA supreme court to fulfill that contract and there is no legal option to just "not pay them."


yes, it has been tested in court about 8 times over several decades, all with the same outcome. You can replace the system for those employees not yet hired, but anyone who is already in the system cannot have their contract (and this applies to union and non union employees) altered unilaterally for the same reason your bank can't just decide your mortgage interest rate is too low and you should be paying 8% instead of 3.5%.


that being said, the pensions aren't really that hefty. The average is somewhere in the 30K range (edit- it's 26K for SERS and 25K for PSERS) since many employees (especially in law enforcement, education, and prisons) don't stay in the system for the 20-30 years it requires to max out the benefit.
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Old 04-07-2016, 12:40 PM
 
Location: Pennsylvania
12,460 posts, read 4,213,163 times
Reputation: 9770
Quote:
Originally Posted by John1960 View Post
The US government has nowhere near enough money to pay retirees.

According to credit rating agency Moody's state, local, and federal governments are about $7 trillion short in funding upcoming pension payments.

https://www.yahoo.com/finance/news/u...153435525.html
Gee.
Who would have ever thought.
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Old 04-07-2016, 01:02 PM
 
12,263 posts, read 18,393,933 times
Reputation: 19082
Quote:
Originally Posted by Burger Fan View Post
Can't speak for any state but mine, but pensions at the state level are constitutionally guaranteed. The state is mandated by the PA supreme court to fulfill that contract and there is no legal option to just "not pay them."
True, most are protected, but there are exceptions. I think in a Detroit court case they simply decided that federal bankruptcy laws override state laws regarding payment of pensions. Some states consider pension follow property laws and are subject to, at least, "changes".
Regardless, constitutions can also change via due process.
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Old 04-07-2016, 01:27 PM
 
4,343 posts, read 6,053,473 times
Reputation: 10428
Quote:
Originally Posted by John1960 View Post
The US government has nowhere near enough money to pay retirees.

According to credit rating agency Moody's state, local, and federal governments are about $7 trillion short in funding upcoming pension payments.

https://www.yahoo.com/finance/news/u...153435525.html
Kinda makes Bernie Sanders and his tuition free-for-all sound a joke!

So who do you believe? The sky is falling out from the US Government or free and endless tuition for everyone?
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Old 04-07-2016, 01:31 PM
 
365 posts, read 305,761 times
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Quote:
Originally Posted by Dd714 View Post
True, most are protected, but there are exceptions. I think in a Detroit court case they simply decided that federal bankruptcy laws override state laws regarding payment of pensions. Some states consider pension follow property laws and are subject to, at least, "changes".
Regardless, constitutions can also change via due process.
Protection by law is meaningless when there is no money to pay for pensions. The politicians will just change the rules like they are currently doing for Puerto Rico.
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Old 04-07-2016, 02:03 PM
 
633 posts, read 462,254 times
Reputation: 1103
Quote:
Originally Posted by Dd714 View Post
True, most are protected, but there are exceptions. I think in a Detroit court case they simply decided that federal bankruptcy laws override state laws regarding payment of pensions. Some states consider pension follow property laws and are subject to, at least, "changes".
Regardless, constitutions can also change via due process.

Detroit is a city, not a state. There *IS* no method by which a state could declare bankruptcy via federal laws.

Quote:
“There are two reasons why state governments currently cannot use the federal bankruptcy system to reorganize their debt. First, the federal bankruptcy code does not allow—and has never allowed—state governments to declare bankruptcy. Since 1937, the bankruptcy code has allowed ‘municipalities’ to declare bankruptcy. The term ‘municipality’ is defined in the bankruptcy code as a ‘political subdivision or public agency or instrumentality of a state.’ This definition is broad enough to include cities, counties, townships, school districts and public improvement districts. It also includes revenue-producing bodies that provide services which are paid for by users rather than by general taxes, such as bridge authorities, highway authorities and gas authorities. But it does not include state governments.

“The second reason stems from the U.S. Constitution. The contracts clause of the U.S. Constitution prohibits state governments from ‘impairing the obligation of contracts.’ As originally understood and enforced, this clause prohibited state legislatures from passing any laws to relieve either private debt or the state government's own debt. Beginning in 1934, however, the Supreme Court began to interpret the contracts clause more flexibly and not as an absolute bar to state debt relief laws. Even under the flexible modern approach, however, the Supreme Court in 1977 reiterated that ‘a state cannot refuse to meet its legitimate financial obligations simply because it would prefer to spend the money (on something else.)’ Thus, were Congress to amend the federal bankruptcy code to authorize states to repudiate debt, the Supreme Court would then need to decide the novel constitutional question of whether such debt repudiation would nonetheless violate the contracts clause of Article I, Section 10.”
http://www.csg.org/pubs/capitolideas...issue65_3.aspx


A big part of the reason why "states" are not included in federal bankruptcy laws is because states are sovereign entities, with all powers not spelled out as belonging to the federal government reserved to them explicitly by the US constitution. Allowing them to go bankrupt raises all kinds of hairy questions about state sovereignty and whether the federal government could impose bankruptcy laws on states and void powers reserved to them by the constitution in the process. Think of a scenario where say the Feds weren't happy with Texas and slapped sky high tariffs and taxes on it in an attempt to force it into bankruptcy and void it's authority. This isn't very likely to happen and would be a legal cluster if anyone tried.


So yes, it's possible for localities like Detroit or Philadelphia to go insolvent and restructure their pension obligations. It would be a DISASTER, but it's possible. It is NOT possible for the state of Pennsylvania or the state of Michigan to do the same thing.


As I mentioned re: the PA state constitution, the same provision that prohibits them from altering existing pensions is the same one that prevents contracts in GENERAL from being altered unilaterally. Remove that one and the concept of a contract becomes meaningless, period. And that's before you consider the insane hurdles it takes to alter the constitution here. House, Senate, Governor AND a popular vote have to pass within the same session to make that one plausible. Good luck with THAT one with every union employee in the state against you.


double edit: it looks like the contracts clause of the US constitution in addition to the PA state constitution expressly forbids the state from not paying obligations it owes because it would rather spend the money elsewhere. Altering both constitutions to allow it is as close to "impossible" as you're going to find in US politics.

Quote:
Originally Posted by Jumeby View Post
Protection by law is meaningless when there is no money to pay for pensions. The politicians will just change the rules like they are currently doing for Puerto Rico.
There is no such thing as "there is no money." states can raise revenue any time they choose to through any number of means. The Federal government can literally print as many US dollars as it chooses to out of thin air. Are there consequences to both? Sure, but most of it is grumbling from taxpayers, not economic disaster. Don't confuse lack of political will with the absence of revenue. In the case where not following the law is a constitutional violation, the choice is enact those provisions or have them enacted for you by the court, lose your job, and go to prison for contempt.

Last edited by Burger Fan; 04-07-2016 at 02:28 PM..
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Old 04-07-2016, 02:49 PM
 
365 posts, read 305,761 times
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Quote:
Originally Posted by Burger Fan View Post

There is no such thing as "there is no money." states can raise revenue any time they choose to through any number of means. The Federal government can literally print as many US dollars as it chooses to out of thin air. Are there consequences to both? Sure, but most of it is grumbling from taxpayers, not economic disaster. Don't confuse lack of political will with the absence of revenue. In the case where not following the law is a constitutional violation, the choice is enact those provisions or have them enacted for you by the court, lose your job, and go to prison for contempt.
No, the Federal government does not literally print as many US dollars as it chooses out of thin air. The Federal reserve, a non government agency, uses monetary policies to stimulate the economy which includes quantitative easing, buying financial assets from financial institutions which does increase the money supply. This monetary policy increases the national debt. They also buy short-term government bonds that lowers interest rates.

When a state defaults due to unsustainable debt they will restructure debt but they won't be able to pay all obligations. Pension funds won't be a high priority and they will restructure or suspended like many other commercial businesses have done in the past decade due to a default.


But financial instability is a national crisis and a global crisis. The most likely scenario is a repeat of 2008 financial crisis but on a much larger scale but this time the central banks will have exhausted all options to deal with it. The central banks have not stopped using extraordinary measures to deal with the 2008 crisis and yet the global financial system is still imploding.

Last edited by Jumeby; 04-07-2016 at 02:59 PM..
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Old 04-07-2016, 03:31 PM
 
2,744 posts, read 990,097 times
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Quote:
Originally Posted by Burger Fan View Post
agree with everything you wrote except the bolded. I'm in state government, HR specifically- and sitting on precise salary data for everyone in the building. The wages we pay are actually on par or below private sector for new hires in the region. Even with my position were I to go to Comcast or Aramark or similar I would be looking at about a 10K jump for less responsibility. We have a tough time retaining medical professionals because of this. Most of our management and administrative positions (for instance IT and accounting) are non union and ALSO below private sector pay. Same deal there re: retention.


Top officials (again, management so non union) don't make anywhere NEAR what a manager or private sector VP or president would make. The top end for public sector is FAR below private.


In the LONG RUN, public sector employee pay can outstrip private sector pay, because the private sector largely no longer gives out raises and public sector (union and non union) gives a yearly 3-4% or so. Private sector pay is raised more by switching jobs to a different company than it is grinding out a career for 20 years at the same corporation- but job switching doesn't work for public since you'll just land at exactly where you were on the payscale no matter which agency you happen to jump to.


Apples and oranges really. You're not making a mint in state employment, union or not.


edit: Local isn't much better. A recent article was posted detailing salaries for every official in the city of Philadelphia. These are the top 5:


[/list]http://www.phillyvoice.com/you-can-n...ployee-philly/


All things considered that's not high at all. Laughable compared to a private company of similar size. (30K employees, 2+ million "customers")
Not sure what part of the country you are in but I can tell you that few if any public jobs in Florida. Have increase salaries at 3% per year. In fact most went negative growth when the market hit a low and the state took 3% from every state worker's salaries and used it to fund the pension. Instead they used it to plug the state budget and now that market improved we are all still paying that 3% a year.
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Old 04-07-2016, 04:44 PM
 
20,708 posts, read 13,727,285 times
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Federal government isn't a problem; as the US can always do what it has in the past to make up fiscal shortfalls; borrow/issue debt and or raise revenue via taxes, fees and surcharges.


OTOH state and local governments are another matter. Their borrowing power is constrained by many factors ranging from constitutional clauses to dealing with the bond market.


All this being said as the vast number of Boomer federal and local government/civil service employees start retiring something is going to have to give. Especially with predicted longer lifespans for both the retiree and spouse. This could mean paying benefits for twenty, thirty or more years.
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