Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
Elf: You shouldn't freeze it, but what they are doing (a bit too cautiously I might add) in raising the start date with things like SS (I think I am at 67) is the right track. SS was meant for an average 10 years or so, not 20. That ALONE doubles the cost.
Maybe, as an experiment, we could try the whole end-of-life game in that we increase the age that people can start collecting SS, but at the same time, provide more health care that does not involve just shilling out money to the Pharms. (The last Medicare bill that increased prescription allowances did not limit the pharms for how much they could charge for them. The whole supply/demand model does not work when the government pretty much gives everyone more money to spend, the suppliers will just charge more because there is more available!)
This is something that could easily win votes, FREE HEALTH CARE OVER 75!!!!! FREE HOSPICE CARE!!! Or whatever is needed. The catch is to make sure that this money is going strait from source to supplier and nobody in between. No insurance company (25%-30% commission).
I am hesitant to suggest state run retirement homes, but perhaps a hybrid could be established in which the government is more than Daddy Warbucks, but less then Herr FundMacher.
But back to my original point. I believe SS WAS originally funded. Our government started to SPEND that saved/allocated money because it was just sitting there and doing "nothing". Like kids in a candy shop, they re-appropriated funds to where they should not go. How do we get that back though? We can't do it in one fell swoop. We can't force businesses to take up the burden in a recession either, although we COULD start introducing bills that would require them to start. That would not be easy to do correctly though.....
We just have too many hands in a pot that is too small to take care of all of them. Some do not even belong there. Pensions are needed and are unfair to get rid of, especially in a job situation that is less able to be modeled after the private sector.
Also, saying the public sector should be more like the private sector is also unfair when most companies are not looking to benefit their employees. The ones that are rarely have openings and all you are left with is non-matching 401K's, and companies that either won't or can't pay much on you Health Insurance.
So, OT. The report is bupkis. Everything that costs money ups taxes. The question is, what is the benefit, does it help our life and lifestyle, and what would happen if it were to be removed/stopped.
Most of the solutions I have seen have been too biased and/or short term to get a real answer for this problem. Maybe the North East should just secede from the Union.
A business culture can value both. If yours does, you're lucky; most don't anymore. I have to wonder if yours does or not, anyway, because your views seem to skew towards favoring the business' worth over your own.
The government should and does have the right to force, as in F-O-R-C-E, a company to do anything the government tells that company to do for the benefit of the people. They already do. See what happens if you reject a qualified job applicant for being handicapped, or black, or jewish, or gay, or female.
Our disagreement is over what is of value to the people, or not.
I am going to bow out of this argument now, as I see our real disagreement is over the power of government, and the scope of influence over the business community. I think it's none of the government's damn business to force a company to provide a pension plan for its employees. I believe that choice should be that of the company. That is where we really disagree. I don't think government should have the ability to have this much say in the means of production. That should be up to the individual, and/or the stakeholders of a profit-seeking company. I don't think you agree with this, and I am not going to change your mind, therefore, I can't continue to argue this point.
The answer is to reintroduce pensions to the private sector, not eliminate them from the public sector.
That would bankrupt the private sector as well as the public sector.
That's your opinion. My opinion is that the private sector would adjust accordingly. Salaries may go down, other costs may be cut, but businesses could adjust. Pensions were once common amongst private businesses, and they didn't go bankrupt because of them.
Quote:
Originally Posted by elflord1973
The problem is that, as I keep repeating, any investment that is going to produce the kind of returns that you want is NOT risk-free.
So the question that needs to be addressed regarding the funding of any retirement scheme is, who bears the risk, and who gets to decide what risk/return tradeoff is the right one.
Pretending that the is no risk by "assuming" X% return doesn't cut it.
Having the corporations whose employees are beneficiaries take responsibility for that risk is very problematic, because if the market takes a nosedive, a pension mandate is all it would take to sink them.
I'm not talking about a pension mandate. I'm saying that corporations should be practicing more loyalty and fair play with their workers, and that if they did, pensions would be much more commonplace amongst private businesses.
Quote:
Originally Posted by elflord1973
It's not about "corporations" and "the wealthy" versus "people". If you kill "the corporations", it isn't very good for "the people" who they hire.
An entitlement mindset isn't going to make pension plans any less insolvent. You can't wish 8% returns into existence.
It (meaning the relationship between employers and employees) IS most definitely about corporations (and many of the wealthy who own or run them or even invest in them) vs. the people who work for them and the communities of people who are affected by what happens to the people working for the corporations.
Funny that you mention "An entitlement mindset" because that's what you have... You believe corporations are entitled to do whatever they want to whomever they want.
I am going to bow out of this argument now, as I see our real disagreement is over the power of government, and the scope of influence over the business community. I think it's none of the government's damn business to force a company to provide a pension plan for its employees. I believe that choice should be that of the company. That is where we really disagree. I don't think government should have the ability to have this much say in the means of production. That should be up to the individual, and/or the stakeholders of a profit-seeking company. I don't think you agree with this, and I am not going to change your mind, therefore, I can't continue to argue this point.
I don't think the government should coerce businesses to offer pension plans for their employees, either. That's not what I meant by "reintroduce pensions to the private sector". But you asked me, afterwards, if the government as "the right" to do so if it chooses, and I gave you the answer. The government has the right to enact and enforce any laws regarding business, within the guidelines of the Constitution and Bill of Rights.
So, the government CAN do just about anything the people want them to do, since they are "of the people, by the people, and for the people". But that doesn't mean they SHOULD do just anything simply because they can.
What should be in place are more regulations on how a business can treat (or how much it an mistreat) its employees.
You completely fail to address serious questions about who should assume the inherent market risk in the pension fund investments.
It's not enough to say that the employer assumes it, because if the fund takes a nosedive, the employer could well be bankrupt (especially if they're responsible for bailing out the pension plan !)
When the plan invests in risky assets and those assets nosedive, my question to you is, who is responsible for eating the loss on those assets ?
Elf: You shouldn't freeze it, but what they are doing (a bit too cautiously I might add) in raising the start date with things like SS (I think I am at 67) is the right track. SS was meant for an average 10 years or so, not 20. That ALONE doubles the cost.
NH -- my primary objection to these state defined benefit plans is that they put a massive amount of market risk onto the taxpayers back.
I understand that it is possible to be more vigilant about funding them, but in the final analysis, these plans won't make the required returns if they exclusively purchase risk free investments (they need to turn 5% of salary contributions into 50% of salary as benefits!) With risk free investments, you'd need to put in about 25% of your salary to get 50% out.
But I think most beneficiaries would prefer, given the choice, to take on some market risk, and then if all goes well, they get similar benefits with a smaller contribution. If it doesn't, well they postpone their retirement or something (btw, if there's a drop in production due to people retiring, having people work longer as circumstances require, will help attenuate this, and reduce losses in retirement funds)
Regarding SS, I actually like it a little more than defined benefit plans for state employees, because it is available to everyone, so it doesn't create a "special class" of people who get a guarantee at the expense of everyone else. It is more like a broad mandate for society to take care of its elderly. There is so much wiggle room in everything the government does, that they can control costs by cutting benefits if they have to. What they can't do is confiscate from one group of retirees and give to another.
Quote:
Maybe, as an experiment, we could try the whole end-of-life game in that we increase the age that people can start collecting SS, but at the same time, provide more health care that does not involve just shilling out money to the Pharms.
The two biggest problems with health in the US is that it costs too much, and not everyone has it. Finding a way to give out more of it doesn't address either of these two issues.
Quote:
But back to my original point. I believe SS WAS originally funded. Our government started to SPEND that saved/allocated money because it was just sitting there and doing "nothing".
No. The government cannot stockpile "money".
The world economy, in aggregate, has to consume everything it produces, with the exception of stockpiling durable goods.
The federal government needs to either consume everything it produces, or acquire assets from either the private sector or other sovereigns.
It doesn't mean anything for the government to acquire "money" -- it controls the supply of money, so it can print as much for itself as it wants.
If the government prints a wad of cash and then hides it under the government mattress, no-one knows that money exists, no-one is any the wiser, the govt has not saved anything. If the government grabs a wad of cash from the tax payer, and then sticks that under the mattress, it most probably triggers a recession.
So being a surplus nation has its problems -- you need to figure out what to do with that surplus, and there are no easy choices. Some countries, like the better managed oil-rich Emerites (e.g. Abu Dhabi, and Dubai) run big state hedge funds (sovereign wealth funds) -- which puts the state into the hedge fund management business. Others like China just buy a pile of bonds from debtor nations. The challenge here is to find a nation with a big appetite for debt, who you can trust to pay it back.
The US doesn't have to agonize over this -- they just sell bonds to whoever buys them.
Quote:
Like kids in a candy shop, they re-appropriated funds to where they should not go. How do we get that back though?
I think trying to make SS a funded program would cause more problems than it solves. I think it best to view the program as a social mandate to take care of the elderly.
Quote:
Also, saying the public sector should be more like the private sector is also unfair when most companies are not looking to benefit their employees. The ones that are rarely have openings and all you are left with is non-matching 401K's, and companies that either won't or can't pay much on you Health Insurance.
Most companies are not experts at managing pension funds. As I have detailed here, there is a lot of inherent market risk in implementing pension plans. Carrying responsibility for that risk is difficult, and even if you do accept responsibility for it, there is the possibility that by the time the bonds in the pension plan are all in default, you too are bankrupt. This is not a problem for the state, because when their pension plan goes bankrupt, they can always reach for the taxpayers hip pocket.
Having employees decide what level of risk they're willing to take on is a better approach. If you believe that everyone should be taken care of, it is better to have an unfunded national SS plan than it is to have a certain privileged class of state beneficiaries who get to pick the tax payers pocket.
Quote:
Most of the solutions I have seen have been too biased and/or short term to get a real answer for this problem. Maybe the North East should just secede from the Union.
There is nothing short term about getting rid of defined benefit plans. They are a massive act of accounting fraud. The defined benefit plan itself is a "short term" thing -- it is something that appears to make risk evaporate until the dice show the wrong numbers.
A business culture can value both. If yours does, you're lucky; most don't anymore. I have to wonder if yours does or not, anyway, because your views seem to skew towards favoring the business' worth over your own.
The government should and does have the right to force, as in F-O-R-C-E, a company to do anything the government tells that company to do for the benefit of the people. They already do. See what happens if you reject a qualified job applicant for being handicapped, or black, or jewish, or gay, or female.
Our disagreement is over what is of value to the people, or not.
I think the government should F-O-R-C-E businesses to pay everyone a $1,000,000 salary. That would REALLY help out our citizens. You realized forced compensation regulations increase unemployment, right?
Governments do apply force, but it makes things worse, not better.
You are taking points made and twisting them. He did not say that Government should force anything in particular, but without govenrments protections, we would have things like Child Labor, Unsafe Working conditions (construction and Coal mining are two), unregulated manufacture and waste disposal (see China) and a whole slew of other things.
The typical response, if taylored to the "Why should they pay more, people work for them, if they pay less nobody would!" response that has been littered about this and other threads is the same for what I previously mentioned. After all, those coal miners were not FORCED to stay there. They could have just picked up and moved somewhere else, right?
Capitalism has shown that it will sell the organs of the living. That it will sell the children of the poor into labor, and get you into ebt you can never afford to repay (the home loan scandal, and quite a few credit card schemes). W/o any regulation, they are a detriment to mankind, willing to eat their legs to make sure their belly is kept fat.
Governments do apply force, but people usually only remember the thnigs that that force ruined, not the ones that the force saved. Unless we go back to 2002 and anyone that objected to the Governments use of force was a Terrorist, but that is ANOTHER thread in and of itself!
Bottom line MM, stop looking for flames. You know you will get it from BCJ. It serves no purpose other than to aggravate him, and other readers. It works to set us sparring with each other rather than the leaders who actually make these decisions. THEY have made us infight enough to ACCEPT outrageous curtailing of our own rights and benefits by suggesting opposition would only be siding with "the enemy".
Back to OP. Until we get a BALANCE in spending, taxes will never go down. Once a program has been around long enough, too much has been vested and built on it to get rid of it w/o hurting many others not directly related to it. How do we stop farm subsidies going to Tobacco farms? How do we stop pharms from upping prices as Medicaid goes up? How do we tax the bonuses of executives who give them out as "stock options" (15% tax rate) which were funded primarily by our own bailout?
Until we can start seeing things come back to the place they came from, we will never see a reduction in taxes..... I have no problem with some of my tax money repairing the Brooklyn Bridge, but when I hear of plans for a Bridge to Nowhere in Alaska? Let them pay for it.
My husband grew up in Sussex County. He also lived in Orlando and now Georgia. I grew up in FL. We are both teachers. We are desperate to get out of this backwards state and head up to rural NJ because it is a way better place to raise our kids. Here is my take:
Teachers in NJ contribute 5.5% of their salary to the pension plan according to my research. The rate in GA is 5.25, so it's about the same. Pay in NJ is the same as in GA when adjusted for cost of living. Our salary here ($42k) translates to $52k in Sussex county according to the salary calculators on the internet.
For those who think education is better when done "on the cheap", let me direct you to states like SC, FL, and GA. Average per pupil spending is only about $5,000. Education is not valued at all in the southern states. People are up in arms now about teacher unions (ha ha, we do NOT have them in the south!) and teacher pay. (ha ha, we just had 135 classroom teachers let go, a pay cut of 3%, benefits cost went up by 10%, deductible doubled, co-insurance doubled from 10% to 20%, and on top of that, the governor of GA imposed 3 unpaid furlough days on all teachers for 2009. You can bet your house that we will have 5 more unpaid days in 2010 because our state budget is crashing and we have no industry to turn to. So teachers here are making a lot less than we did last year! Meanwhile, we have more students enrolled and 55% of them are on free lunch and 30+% of kids here live in poverty. The stories I could tell you would blow your mind about things going in in school now. (8 year olds watching lesbian porn, 5th graders writing on the bathroom walls with their own feces, kids spending the night in the woods because drunk dad was driving the backhoe around threatening to bury them and their mom, just for starters) Teacher quality here is low, even worse than what we saw in FL. Everyone wants to put religion back in the schools (and believe me, it's already here). Teachers are very demoralized and many young newbies are leaving the profession.
Nobody cares that teacher pay is in the toilet here. The cry to cut taxes continues. There is no way taxes will ever be raised here. People want to go to a 4 day school week, 10 hours a day (even for 5 year olds who are in full-day kindergarten!) Meanwhile, the central office has no layoffs and they still travel out of state for retreats and such. It is nuts. The fat at the top refuses to budge while all of the cuts are at a level which directly impacts the classroom.
We have major gang problems in the schools (beatings, etc) and crime is out of control. Someone tried to abduct a 10 year old last week near my house, in a new, upscale neighborhood. The South is also a magnet for child molesters, with many more per capita than up north.
I used to teach in FL and have been following things down there recently. Seminole County is recognized as being a leader in education in the state, and home values reflect that. Voters there recently agreed to a 2-year special tax (avg cost to homeowner of $50) to fund the schools. Voters there see that school quality directly impacts their property values and quality of life and are very upset by the recent cuts.
I wonder how much of teacher pay is covered by the state of NJ vs. the local districts? In GA, I think most is covered by the state and then the local districts kick in a 10% supplement (which will probably go away soon). I also researched New Hampshire and it seemed like most of the funds there came from local districts instead of the state (no state income tax). School quality there varies widely depending on the district.
Final note: of course I realize that there are many reforms that need to be made to education. Pensions should be available to front line workers (teachers, police) but NOT to top level administrators & general office workers. Why should someone who makes $150k as a principal or city administrator get a heafty pension on top of that? Working conditions are not that tough for the office staff. Teachers and police are on the front lines every day. If a teacher is not on top of every detail at every minute of the day, a child could get injured and that teacher would lose his job.
(I once saved a child's life in the school cafeteria when I wasn't even responsible to be there) Teachers can't just relax, check e-mail, chat at the water cooler for a minute, etc like many office positions. We have to juggle 10 things at once and always anticipate what could happpen. I can't count how many parents I had tell me they could never handle being a teacher after they spent some time at our school. (1,400 elementary kids in a building built for 900, 36 kids per class)
My main point is that we should reward the front line folks and cut down on the overpaid top-level paper pushers. Make the money count in ways that help students the most!
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
