patrick.net

spydah_hh says

Believe it or not it truly is. Hell even mainstream media and the congressional hearings are starting to questing Janet Yellen and the FEDs policies.

Hell even the Dallas FED chairman Richard Fisher has commented about the FED policies and how it makes the rich richer.

First--zerohedge is not mainstream.
Second--Others can certainly second guess the Fed's policies and decisions. But that doesn't mean that the Fed has anything at all to do with private businesses deciding to get rid of pensions.

How did you make that leap? Other than your bias against the Fed and all things remotely related to government?

spydah_hh says

, thus leading to the private sector to slowly remove the benefits.

Wait, the private sector can't afford to pay reasonable benefits and fund pensions? Bullshit! See Bill's chart. Your posts show you are blinded by foxnewslike rhetoric and not very good at math.

spydah_hh says

Believe it or not it truly is. Hell even mainstream media and the congressional hearings are starting to questing Janet Yellen and the FEDs policies.

Even Piketty who not to long ago said the reason was because the rich did not pay as many taxes, said in his latest book that the cause of inequality was inflation caused by the Fed.

JH says

spydah_hh says

, thus leading to the private sector to slowly remove the benefits.

Wait, the private sector can't afford to pay reasonable benefits and fund pensions? Bullshit! See Bill's chart. Your posts show you are blinded by foxnewslike rhetoric and not very good at math.

That chart is misleading though. Companies also have hired more people so their expenses are higher. Plus some have issued their own bonds. What you have to look at is how long they could go without layoffs after subtracting debt from cash in case of a downturn. Then you will find out that the whole system runs on cheap debt and that most would not even have a couple of months to react. And if you believe the meme that the majority of the profits gets absorbed by CEO and upper management, it's looking even worse. But the taxpayer doesn't have to bail them out if and when they fail. Well at least that was true until 2008. The Fed and the government's crony capitalist policies are the source of the problems. Once you abolish the rule of law and defer responsibility to future generations, everything goes to shit - that's why that ruling is correct and so important.

The ruling is correct that cities should receive full benefits while reducing their payments? Boy o boy, I can't wait to see how that plays out for a 401k!!

marcus says

He lasted 8 months a police chief, but presumably put in a few decades in
before that, and would have deserved a pension anyway, but not nearly that big.
But don't be deceived. This is like the professional athlete, that gets the big
contract but then is injured.

Regardless - letting someone retire at the ripe old age of 52 at $200K+ pension for life is madness and mathematically impossible for virtually any municipality. With current rules, someone can work for a City for 30 years and literally get 40 more years of full pay......even if they bankrupt the City in the process.

And your professional athlete analogy fails because if a professional athlete gets injured, Cities don't need to go bankrupt and let their towns fall to shit to keep paying their pensions like they do with our ridiculous union pensions.

tatupu70 says

Before you state the BS that companies HAD to in order to stay competitive,
I'll remind you of this chart:

Regarding Corporate profits, America already has the highest Corporate Tax Rate in the entire world!
http://www.politifact.com/punditfact/statements/2014/sep/09/eric-bolling/does-us-have-highest-corporate-tax-rate-free-world/

How much higher do the Progressive want to raise the Corporate Tax rate to keep Stockton's police chief making $204,000 for the rest of his natural life?

Again - it just amazes me how the discussion is NEVER about the quality, performance and efficiency of our massive government bureaucracy. When our government fails us in our schools, fails to maintain infrastructure, to the corruption at the VA - Progressives just say we need to raise taxes and give the government more money.

Even when cities like Stockton hit rock bottom due to their poor management and greed, Progressives want everyone else to pay up (tax payers, reduced servics, bond holders) - but wants to leave the unions and government worker's compensation untouched.

tatupu70 says

And why did it take 30+ years before the private sector started slowly removing the benefits?? Because that's when the power of labor had eroded and Mr. Reagan certainly helped it along.

Yep, and the track record of individually managed 401ks is terrible. Also, it was during the Reagan Administration that companies were allowed to reduce pension funding under certain market conditions. It was great while the stock market rush lasted, until it didn't. Then the pensions were underfunded, media seldom mentioned the legalized underfunding, and the workers got the blame for the companies and the politicians' bad policy.

All part of the excellent track record of the last 30 years of reducing worker power, pensions, job security, etc. -- and we end up with... Prosperity?!

socal2 says

Regarding Corporate profits, America already has the highest Corporate Tax Rate in the entire world!

http://www.politifact.com/punditfact/statements/2014/sep/09/eric-bolling/does-us-have-highest-corporate-tax-rate-free-world/

How much higher do the Progressive want to raise the Corporate Tax rate to keep Stockton's police chief making $204,000 for the rest of his natural life?

Who's talking about corporate tax rates?? What does that matter? Regardless, the graph I posted is AFTER TAX.

socal2 says

Again - it just amazes me how the discussion is NEVER about the quality, performance and efficiency of our massive government bureaucracy. When our government fails us in our schools, fails to maintain infrastructure, to the corruption at the VA - Progressives just say we need to raise taxes and give the government more money.

Even when cities like Stockton hit rock bottom due to their poor management and greed, Progressives want everyone else to pay up (tax payers, reduced servics, bond holders) - but wants to leave the unions and government worker's compensation untouched.

Never? It seems like the discussion is quite often about quality of government. If you want to change it, elect people that will do as you wish...

As an aside--if those positions are so overpaid, why aren't there people falling over each other to apply to be cops or teachers?

tatupu70 says

Who's talking about corporate tax rates?? What does that matter? Regardless,
the graph I posted is AFTER TAX.

Just pointing out that we already have the highest Corporate Tax rate in the entire world. Why else was that graph posted unless you want to argue we need to raise Corporate taxes even higher to fund millionaires working for our government who are bankrupting our cities?

tatupu70 says

As an aside--if those positions are so overpaid, why aren't there people
falling over each other to apply to be cops or teachers?

Stockton pays their cops much higher than the State and National average ($150K year). They pay the Cops so much, they have to reduce the number of cops they employ because they can't afford more - which is resulting in more crime like we saw in Vallejo and Oakland. Basically the City and unions are choosing to pay Cop's massive pensions before paying for public safety.

http://blogs.reuters.com/muniland/2013/03/27/this-is-why-stockton-is-broke/

socal2 says

Just pointing out that we already have the highest Corporate Tax rate in the entire world. Why else was that graph posted unless you want to argue we need to raise Corporate taxes even higher to fund millionaires working for our government who are bankrupting our cities?

The graph was posted to rebut the usual argument that companies are cutting pay and benefits (read pensions) because they HAVE to in order to stay "competitive".

And, like I said, the tax rate doesn't seem to be eating into the after tax profits, does it? (hint--look at effective tax rate vs. stated tax rate).

tatupu70 says

The graph was posted to rebut the usual argument that companies are cutting
pay and benefits (read pensions) because they HAVE to in order to stay
"competitive".

But we are talking about Municipalities.

You seem to be arguing that Corporations in New York or outside Modesto need to pay higher taxes to keep Stockton from going through bankruptcy. As if raising taxes will fix these pension Ponzi Schemes.

Stockton foolishly spiked their pensions and compensation packages when they saw all of the increased property tax revenue during the housing boom. CALPERS told all these cities that it was OK because we were in a new normal.

Instead of being careful and treating the increased property tax revenue as a short term windfall, both CALPERS and the cities thought the gravy was never going to dry up and gave everyone a big fat raise with an outrageous pension plan.

Well - it has dried up - and everyone has to give back some. Including city workers. If the citizens of Stockton now have to live in a total shit-hole of a city watching their property values sink even further due to the City's financial mismanagement and scourge of bankruptcy, all the while they are plagued with increased crime because Stockton can't afford more cops making $150K/year with fat pensions - it is only fair that the City reforms their pension system that is most responsible for the bankruptcy situation.

socal2 says

But we are talking about Municipalities.

Who's we? I was responding to hh's post about private sector pensions.

socal2 says

You seem to be arguing that Corporations in New York or outside Modesto need to pay higher taxes to keep Stockton from going through bankruptcy. As if raising taxes will fix these pension Ponzi Schemes.

Not sure how you could come to such a conclusion.

As another aside--when did the public forget what a Ponzi scheme is? Was it right wing propaganda that brainwashed the public to try to eliminate social security and pensions?

In any event, if you're arguing specifically about Stockton--I agree pension reform is needed. Illinois is the same.

tatupu70 says

In any event, if you're arguing specifically about Stockton--I agree pension
reform is needed. Illinois is the same.

There you go. The thread is specifically about public sector pensions.

You can also add Vallejo, San Bernardino and Detroit to that list.

Basically, any city or state that is going bankrupt these days is likely due to outrageous pension committments the cities made during the housing bubble.

Was it "left wing progaganda" that convinced a buch of Progressives that a person could work only 30 years and expect their employer (either public or private) to support them for another 40-50 years at near full pay and think it was sustainable?

socal2 says

Basically, any city or state that is going bankrupt these days is likely due to outrageous pension committments the cities made during the housing bubble.

See--this is where you run into trouble. Don't extrapolate. First--pensions aren't the only reason Stockton is in trouble. Second--you certainly can't generalize to any city or state.

socal2 says

Was it "left wing progaganda" that convinced a buch of Progressives that a person could work only 30 years and expect their employer (either public or private) to support them for another 40-50 years at near full pay and think it was sustainable?

Nope--it was (and is still) easily possible. What isn't sustainable is companies (or municipalities) underfunding pensions and assuming ridiculously high investment returns will make up the difference. Or companies raiding the pension plan to fund bonuses for the top executives. When you do those things, then the pension plan becomes unsustainable.

tatupu70 says

See--this is where you run into trouble. Don't extrapolate. First--pensions
aren't the only reason Stockton is in trouble. Second--you certainly can't
generalize to any city or state.

Pensions are Stockton's largest liability - by far ($900 million and counting).
http://nation.time.com/2013/07/25/the-wages-of-bankruptcy-stocktons-cautionary-tale-for-detroit/

The fact that Vallejo is facing another bankruptcy after they raised taxes, cut services and left pensions untouched - suggests that pensions are a big problem for many cities and states.
tatupu70 says

Nope--it was (and is still) easily possible.

Huh? Where has it been possible to work 30 years and get 40 additional years of near full pay at retirement? Social Security and early pension plans were never designed this way to support people this long after they stopped working for the employer. Back then, people may have lived another 10 or 20 years after retirement - not 40 years after retiring in their early 50's!

Besides, didn't GM have these types of outrageous pensions and early retirements requiring the US tax payer to bail them out?

socal2 says

Besides, didn't GM have these types of outrageous pensions and early retirements requiring the US tax payer to bail them out?

GM was allowed to underfund the pensions during the boom stock market years in the 80s and 90s. The better the stock performance, the more they were - perversely - allowed to underfund.

thunderlips11 says

GM was allowed to underfund the pensions during the boom stock market years
in the 80s and 90s. Had they contributed normally, they wouldn't have been
bailed out.

Right - and somehow GM would have stayed in business if it spent EVEN MORE of their money on their already high labor and pension liabilities instead of money to modernize their factories and better engineering to design better cars that people actually want to buy?

socal2 says

Right - and somehow GM would have stayed in business if it spent EVEN MORE of their money on their already high labor and pension liabilities instead of money to modernize their factories and better engineering to design better cars that people actually want to buy?

The issue is pension funding. The execs, who loved underfunding pensions and generally love cutting workers' pensions, keep trying to sue to stop their 6/7 figure pensions from being cut - our money is in a separate account from the hourly wage slobs, dammit!

Three judges from the Sixth Circuit Court of Appeals in Cincinnati have ruled that 100 retired General Motors executives will have to continue with their reduced pensions, based on conditions outlined by the U.S. Treasury from the 2009 bankruptcy. GM was required to cut executive pensions that exceeded $100,000 a year by two thirds.

According to the Detroit News report, the retired executives claim that “GM misquoted terms of its executive retirement plan and shouldn’t have included benefits from the separate salaried retirement plan when determining if they were subject to the reduction.” Naturally, a lot of former executives feel like they’re being screwed over. For example, Rick Wagoner, former GM CEO, saw his pension drop from $20 million to *just* $8.5 million.

Check out the level of ignorant comments at:
http://www.businessweek.com/articles/2012-06-27/u-dot-s-dot-automakers-cut-retirees-loose

The dumbasses don't realize this is salaried employees, and of course are blaming the union the management and engineers weren't members of.

thunderlips11 says

The issue is pension funding. The execs, who loved underfunding pensions and
generally love cutting workers' pensions, keep trying to sue to stop
their 6/7 figure pensions from being cut - our money is in a separate
account from the working slobs, dammit!

I want to see ALL pensions reigned in to sustainable levels that don't bankrupt cities or major corporations.

How can California cities survive this massive growth in pension liabilities - regardless if they are funded or not? It leaves nothing else for running the basic functions of a city like infrastructure, security and schools.

In 2005 - 1,841 government retirees had greater than $100K pensions a year

In 2012 - 14,763 government retirees had greater than $100K pension a year

That's up 700 percent in less than a decade. The rate of inflation over the same period was 38 percent.

http://www.ocregister.com/taxdollars/city-515888-100k-club.html

I agree with you in that that ALL government pensions should not pay into the 6 figures, from the policeman to the police chief to the Chief of the FBI.

Speaking of Lifetime Pensions, meet the Author whose family used political connections to get him appointed to Annapolis. After contracting TB, he received a LIFETIME pension of 2/3rd his Navy Officer Pay for just a few years - less than a decade - of service. The TB was so bad he lived into 80s - for longer than most of his demographic peers.

As a young man, writing for pulps and living through the Great Depression, he was enthusiastic and grateful for his pension - knowing it allowed him to write and survive even through dry spells when he couldn't sell a single piece.

But once he really started making real money in the 50s and 60s, he began to mock "Uncle Sucker", and took a turn into Libertarian Land...

http://delong.typepad.com/sdj/2014/06/tuesday-book-blogging-jeet-heer-on-robert-a-heinleins-navy-disability-pension-and-social-insurance.html

thunderlips11 says

But once he really started making real money in the 50s and 60s, he began to mock "Uncle Sucker", and took a turn into Libertarian Land...

Military pensions are different because they are not backed by the taxpayers and our soldiers are not communist so stop saying that.

socal2 says

Huh? Where has it been possible to work 30 years and get 40 additional years of near full pay at retirement? Social Security and early pension plans were never designed this way to support people this long after they stopped working for the employer. Back then, people may have lived another 10 or 20 years after retirement - not 40 years after retiring in their early 50's!

oh my god.

how many people retired in their early 50s at 100% of their pay? NO FUCKING BODY. First of all, look at the charts before you blow hot air. Second of all, because somebody spiked, we suddenly have to reform the entire nation's system?

Finally, who the fuck lives into their early 90s?????

Get a grip man.

socal2 says

Was it "left wing progaganda" that convinced a buch of Progressives that a person could work only 30 years and expect their employer (either public or private) to support them for another 40-50 years at near full pay and think it was sustainable?

Are you SERIOUS????? Now you are saying someone will work 30 years and then live 50 more????? Can you please provide some stats on how that POSSIBLY is bringing down calpers? Of course it isn't sustainable because only outliers live that long.

HydroBenghazEbolaCabron says

Military pensions are different because they are not backed by the taxpayers
and our soldiers are not communist so stop saying that.

Military pay and pensions aren't even a fraction of the $150K/year that Stockton Police officers and firefighters get.

I dare say that our military men and women had a much tougher job in the last 10 years with long deployments than your average cop making 6 figures in California.

socal2 says

In 2005 - 1,841 government retirees had greater than $100K pensions a year

In 2012 - 14,763 government retirees had greater than $100K pension a year

That's up 700 percent in less than a decade. The rate of inflation over the same period was 38 percent.

That reform is already in place. Did you know that? Do you read anything but the Register for your information? Of course boomers are going to run away with bags of money; this will be true for anything: medicare, SS, etc. But newcomers max pensions are limited.

socal2 says

$150K/year that Stockton Police officers and firefighters get

You know that is health benefits plus pay, right? If they were working, it would cost the city at least as much. Now, I agree they should be working desk jobs until they are 65. It's bullshit they can start planting gardens at 55. But they sure as hell should not be fighting fires at 55. So the city still has to hire new firefighters capable of doing the job. The only solution is to reduce the factor, which is happening, and limit the max salary, which is also happening. Is it enough? Who knows.

JH says

Are you SERIOUS????? Now you are saying someone will work 30 years and then
live 50 more????? Can you please provide some stats on how that POSSIBLY is
bringing down calpers? Of course it isn't sustainable because only outliers live
that long.

A person can start working for a city at age 21, work 30 years and retire at 51.

Life expenctency in the US is averaging 80 years and will likely go up as we seen increased medical advances over the next century.
http://en.wikipedia.org/wiki/List_of_countries_by_life_expectancy

So the AVERAGE city worker will likely work 30 years and get a MINIMUM of 30 additional years of near full pay in their pensions.

Some people will live to be 90 or even 100. I hope I live that long!

socal2 says

A person can start working for a city at age 21, work 30 years and retire at 51.

"can"

socal2 says

Military pay and pensions aren't even a fraction of the $150K/year that Stockton Police officers and firefighters get.

20 years of service pays 50%.

So: join at 20, retire at 40 with half pay. Live another 40 years, which is equivalent to drawing a full salary for 20. Most retirees draw retirement for 15 years.

I'd say it's about the same, if not more. And dump the $150K example. The overwhelming majority of public employees, with the exception of colonels and generals, don't pull down that kind of cash in retirement.

JH says

Now, I agree they should be working desk jobs until they are 65. It's bullshit
they can start planting gardens at 55. But they sure as hell should not be
fighting fires at 55.

Firefighters have even a bigger scam than the Cops. We don't have structure fires like we did 100 years ago thanks to smoke alarms, sprinklers and better building codes. That is why the firefighter unions worked a deal that a fire truck has to deploy for typical ambulance services (transporting old people to the hospital from old folks homes etc.)

"Over the past 35 years, the number of fires in the United States has fallen by more than 40% while the number of career firefighters has increased by more than 40% (data)."

http://marginalrevolution.com/marginalrevolution/2012/07/firefighters-dont-fight-fires.html

Cops have a much harder job than firefighters IMO. Most firefighters are not battling 9/11 WTC fires or even wild fires outside of California.

socal2 says

A person can start working for a city at age 21, work 30 years and retire at 51.

A person who starts work at 21 and maxes 401k with at least some employer match will be putting away as much as 25% of income and be able to retire early also.

socal2 says

Cops have a much harder job than firefighters IMO.

In Stockton, probably true...hahah

JH says

A person who starts work at 21 and maxes 401k with at least some employer
match will be putting away as much as 25% of income and be able to retire early
also.

*IF* the market returns are favorable enough to allow for early retirement. I guarantee you folks who were looking to retire early in 2008-10 with their 401K's didn't opt out.

One of the most corrupt things with government pensions is that workers are *guaranteed* that payout regardless of market reality. If CALPERS can't provide returns high enough to fund these pension committments, the cities just raise taxes, cut services and bankrupt cities to keep that pension guarantee going.

Why should government workers have a guaranteed retirement above all the other interests in the City that is going bankrupt? This arrangement causes alot of suffering for far more people than just a few thousand government workers in Stockton.

socal2 says

A person can start working for a city at age 21, work 30 years and retire at 51.

Life expenctency in the US is averaging 80 years and will likely go up as we seen increased medical advances over the next century.

http://en.wikipedia.org/wiki/List_of_countries_by_life_expectancy

So the AVERAGE city worker will likely work 30 years and get a MINIMUM of 30 additional years of near full pay in their pensions.

Minimum?? Since when does average = minimum? If the average lifespan is 80, that means half of the people will not collect for even 29 years.

If your entire argument is that some pensions are abused and some are too generous, then I agree. I don't think you'll find too many in opposition.

You run into trouble when you try to make broad generalizations.

socal2 says

Why should government workers have a guaranteed retirement above all the other interests in the City that is going bankrupt? This arrangement causes alot of suffering for far more people than just a few thousand government workers in Stockton.

Because that was part of the agreement when they were hired.