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1 researchok  Mon, Jul 23, 2012 1:24:13pm

No problem. Just keep raising taxes.
//

2 lawhawk  Mon, Jul 23, 2012 1:36:25pm

A major complicating factor is that the accounting bodies are looking to change the growth rate that pension funds use in determining whether they are sufficiently capitalized from 8% down to 5%. That means that the funds need more money to get the rate of return necessary to cover their obligations and since many states/localities are already straining to cover their existing obligations with the 8% rate of return figured in, shifting to 5% could mean major problems.

It doesn't begin to take into account those localities and states that are already shorting their pension obligations (NJ among those that do) or those that have fallen short on rate of return based on what the funds invested in (CA, NC for instance).

More here.

3 watching you tiny alien kittens are  Mon, Jul 23, 2012 1:55:38pm

I thought it was because Obama is a Kenyan Socialist...at least that is all I keep hearing. ///

And it’s simply not sustainable. A recent Pew research survey found that the gap between state assets and their obligations for public sector retirement benefits is $1.38 trillion. It rose by 9 percent in 2010 alone - and it will likely keep rising until these obligations are renegotiated.

Chickenfeed, hardly worth mentioning, according to the C.B.O. the "unfunded liabilities" the Federal Government faces between now and the last baby boomer dieing in 2054 are approximately another 92 Trillion dollars of deficit spending, provided that taxes and medicare/social security benefits remain unchanged of course.

Who is going to step forward and "renegotiate" Social Security and Medicare benefits, taxes and deductions? What leader is suddenly going to step forward into the spotlight and get this nation to agree to making hard and bitterly contested choices now to prevent it's future insolvency?

The status quo is impossibly unsupportable, the hard and fixed numbers of demographics and statistics tell us so, yet some on the Left deny this as vehemently as those on the right deny climate change and with even less supposed "evidence."

Hard and painful choices need to be made now to prevent panicked and catastrophic ones being made later, but that just is not going to happen, is it?

4 Political Atheist  Mon, Jul 23, 2012 3:04:12pm

re: #2 lawhawk
I would add "Guaranteed benefit" is completely insane. How do you guarantee the payout given the wide variance in payback from the invested monies?

5 EiMitch  Mon, Jul 23, 2012 5:02:47pm

It just might become necessary to short pensions and benefits someday soon. But I dunno how any of us are supposed to sleep at night if we do this without first gutting some other f**ed-up wastes of money.

The war on drugs, excessive military research funding, propping-up dictatorships, corporate welfare for rich companies (subsidies for oil companies of all things? Really?), prisons ridiculously overcrowded with non-violent first-time offenders (before you ask, rape does indeed count as violence), and thats just off the top of my head.

Yet, retirees are the ones being put on the block right now? Not the special interests? "But you can't beat the special interests. It can't be done." Okay then. Whatever you say, quitter.

6 Dark_Falcon  Mon, Jul 23, 2012 5:07:09pm

re: #5 EiMitch

Those other things you cite are federal problem, pensions are a state and local problem. A national solution to pension problems would be neither feasible nor welcome.

7 EiMitch  Mon, Jul 23, 2012 5:24:21pm

re: #6 Dark_Falcon

So what?! Money goes back and forth between the states and federal government every year, not just during troubled times.

Besides, our overcrowded prisons are a state level problem. Its nice of you to pay attention.

8 lostlakehiker  Mon, Jul 23, 2012 8:38:14pm

re: #2 lawhawk

A major complicating factor is that the accounting bodies are looking to change the growth rate that pension funds use in determining whether they are sufficiently capitalized from 8% down to 5%. That means that the funds need more money to get the rate of return necessary to cover their obligations and since many states/localities are already straining to cover their existing obligations with the 8% rate of return figured in, shifting to 5% could mean major problems.

It doesn't begin to take into account those localities and states that are already shorting their pension obligations (NJ among those that do) or those that have fallen short on rate of return based on what the funds invested in (CA, NC for instance).

More here.

Even five percent is wildly optimistic. Not factored in are such downside shocks as repeated crop failures. We're facing one now. In a summer which by past experience is a once in a century thing if that.

But wish away global warming. Are there not other difficulties? Five percent is what we'd get, maybe, if the real world didn't blindside us from time to time.


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