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I find this new wave of going after people’s pensions to be super unseemly. All of this information has been public for decades, if you view the voter as “the b

I find this new wave of going after people’s pensions to be super unseemly. All of this information has been public for decades, if you view the voter as “the board”, there’s culpability in not managing politicians and allowing this situation to spiral. If we are going to be adults, these pensions are contractual and need to be paid out. It’s not a responsible behavior to use retirement plans as weapons at the 11th hour.

sct202 9y ago
My personal problem with the deficits is that the people who agreed to these terms are retiring and got either inflated pensions or lower taxes (as a result of under-funding the pensions). So, younger adults who are just entering the workforce are going to shoulder the burden for paying for these deficits based on decision made when they were children or not even born.
1123581321 9y ago
In many cities, they will be impossible to pay out. In the 2030s, my city will need to double its revenue to pay pensions as well as maintain services, but that won’t happen since revenue is falling. If contracts are going to be broken due to insolvency anyway, it makes sense to gently break them now to let younger employees react while taking care of the eldest who can change nothing.
phil21 9y ago
The issue being of course those same voters were in many cases are the recipients of said pensions. And those who were not and still voted for such things enjoyed the benefits of cheap government services without having to pay full freight. Now that they enjoyed not having to fund the pensions for 30 years, they are retiring and expecting the next generation to pay for them having their cake and eating it too. I find it very difficult to really figure out where the greater moral hazard here lies. As you state this was a problem everyone knew about when setting these public pensions up and it was easier to kick the can down the road. You will find it very difficult to convince me that the average union member in the 80's didn't know the sweet deal they were getting. It was a trope growing up in the 80's/90's to hear adults talk about "scamming" the overly generous pensions systems of the day. I think it's interesting public unions in Illinois advocated 30 years ago for enshrining pension benefits into the state constitution. That language was added specifically because the public unions knew the deals they were making with politicians were not fiscally sustainable. At this point I don't see a good way out and something major will break at a societal level before it gets fixed. There simply is no way to pay for these promised benefits and still maintain local and state government at a functional level in many states. I don't think bailing them out federally is an answer either - again for moral hazard reasons. I also don't think quadrupling taxes on the next generation is morally any better either. In many ways this discussion is moot. The math is so overwhelmingly bad in some places it's simply not fixable from the revenue side only. Everyone is going to have to share some pain here, and that includes those receiving benefits.
- crdoconnor 9y ago
  >I think it's interesting public unions in Illinois advocated 30 years ago for enshrining pension benefits into the state constitution. That language was added specifically because the public unions knew the deals they were making with politicians were not fiscally sustainable. More likely it was added because they knew that there would eventually be a concerted political effort to strip them of their pensions )and raid those pensions) by a combination of business lobbies and wall street. >I also don't think quadrupling taxes on the next generation is morally any better either. What is your moral objection to taxing unearned income at a higher rate?
  - sseveran 9y ago
    Wall St (well most of it) would not want to strip people of their pensions. There is too much money in managing the assets in those pensions and they would I am sure advocate for federal money to make up for the shortfall.
  - kazagistar 9y ago
    If you propagate debts far enough, you are effectively trasferring wealth from not-yet voters to existing voters. In other words, taking from those who don't have a political voice yet.
    - crdoconnor 9y ago
      All the more reason to tax unearned income at a higher rate, no?
    - gaius 9y ago
      Also known as Corbynomics
    - toomuchtodo 9y ago
      But there is reason to do this. Not-yet voters inherit society and it’s infrastructure. There is value in what they’re inheriting. We’re just arguing about the amount of the transfer at this point.
anonuser123456 9y ago
Why should pensioners not face counter party risk like the rest of us?
- rainbowmverse 9y ago
  The whole point of a pension is to accept lower pay today to not have to worry about tomorrow. It's a structural way of dealing with the fact that most people don't know how to plan for the future and, before, just ended up dying in the streets in their 60s.
  - lotsofpulp 9y ago
    That doesn't answer the question of why they shouldn't face counter party risk like everyone else though. Obviously, the government also doesn't know how to plan for the future.
  - anonuser123456 9y ago
    What's wrong with dying in the streets in their 60s? They're better off than the 99% of humanity that lived before them. Why should the next generation pull the weight of the previous?
- gaius 9y ago
  Why should pensioners not face counter party risk like the rest of us? Pensioners in the private sector do face those risks.
bobcostas55 9y ago
These situations happen not because of any particular cases of mismanagement or lack of overseeing from the voting public. They are a fundamental feature of how incentives are structured. The idea that people can just "manage politicians" better is ridiculous.
Zach_the_Lizard 9y ago
> If we are going to be adults, these pensions are contractual and need to be paid out If we're going to be adults, we're also going to recognize that many of us were not adults when these contracts were drawn up and signed. Many of us were never even born, and some of those who were of the right age opposed them to some degree or another. Maybe we should recognize, in a truly adult fashion, that the mistakes of previous generations should not be passed on to the current generation. Maybe adults should recognize the math just doesn't add up. > It’s not a responsible behavior to use retirement plans as weapons at the 11th hour. It's not a responsible behavior to over promise pensions and bankrupt dozens of states either. Nor, in the pursuit of fulfilling those reckless promises, is it responsible to bankrupt future generations.
- awinder 9y ago
  I'm all for this generation deciding, collectively, that the previous generation did not appropriately fund government and making a deal -- through estate transfer taxation -- to make government whole again. How that's structured is up to debate, but let's not spike today's economy and today's society when the debt problem can be reasonably solved over a longer period, causing less downstream effects. Everyone from the previous gen. is culpable in this, but these people are also our fathers & mothers, so let's not try to handle this situation in the most abrasive way possible.
  - tarr11 9y ago
    Even when pension reform proposals do not change benefits for current employees and retirees, and only apply to new hires, unions will resist fiercely, such as this case in Kentucky. > KEA opposes the pension reform, in which new hires will have to enter a hybrid cash balance plan, which differs from a traditional pension, and would limit new sick days that teachers can put toward their retirement. https://www.cnn.com/2018/04/11/us/kentucky-teachers-pension-governor/index.html https://www.cnn.com/2018/04/11/us/kentucky-teachers-pension-...
- ThrowawayR2 9y ago
  > If we're going to be adults, we're also going to recognize that many of us were not adults when these contracts were drawn up and signed. So are you okay with a future generation repudiating their contracts and obligations with you when you reach retirement age? After all, all of us are someday going to part of a "previous generation" and none of are so perfect that our generation has made no mistakes. Why do so many people behave as if aging is something that only happens to other people?

sct202 9y ago

My personal problem with the deficits is that the people who agreed to these terms are retiring and got either inflated pensions or lower taxes (as a result of under-funding the pensions). So, younger adults who are just entering the workforce are going to shoulder the burden for paying for these deficits based on decision made when they were children or not even born.

1123581321 9y ago

In many cities, they will be impossible to pay out. In the 2030s, my city will need to double its revenue to pay pensions as well as maintain services, but that won’t happen since revenue is falling. If contracts are going to be broken due to insolvency anyway, it makes sense to gently break them now to let younger employees react while taking care of the eldest who can change nothing.

phil21 9y ago

The issue being of course those same voters were in many cases are the recipients of said pensions. And those who were not and still voted for such things enjoyed the benefits of cheap government services without having to pay full freight. Now that they enjoyed not having to fund the pensions for 30 years, they are retiring and expecting the next generation to pay for them having their cake and eating it too. I find it very difficult to really figure out where the greater moral hazard here lies. As you state this was a problem everyone knew about when setting these public pensions up and it was easier to kick the can down the road. You will find it very difficult to convince me that the average union member in the 80's didn't know the sweet deal they were getting. It was a trope growing up in the 80's/90's to hear adults talk about "scamming" the overly generous pensions systems of the day. I think it's interesting public unions in Illinois advocated 30 years ago for enshrining pension benefits into the state constitution. That language was added specifically because the public unions knew the deals they were making with politicians were not fiscally sustainable. At this point I don't see a good way out and something major will break at a societal level before it gets fixed. There simply is no way to pay for these promised benefits and still maintain local and state government at a functional level in many states. I don't think bailing them out federally is an answer either - again for moral hazard reasons. I also don't think quadrupling taxes on the next generation is morally any better either. In many ways this discussion is moot. The math is so overwhelmingly bad in some places it's simply not fixable from the revenue side only. Everyone is going to have to share some pain here, and that includes those receiving benefits.

crdoconnor 9y ago
>I think it's interesting public unions in Illinois advocated 30 years ago for enshrining pension benefits into the state constitution. That language was added specifically because the public unions knew the deals they were making with politicians were not fiscally sustainable. More likely it was added because they knew that there would eventually be a concerted political effort to strip them of their pensions )and raid those pensions) by a combination of business lobbies and wall street. >I also don't think quadrupling taxes on the next generation is morally any better either. What is your moral objection to taxing unearned income at a higher rate?
- sseveran 9y ago
  Wall St (well most of it) would not want to strip people of their pensions. There is too much money in managing the assets in those pensions and they would I am sure advocate for federal money to make up for the shortfall.
- kazagistar 9y ago
  If you propagate debts far enough, you are effectively trasferring wealth from not-yet voters to existing voters. In other words, taking from those who don't have a political voice yet.
  - crdoconnor 9y ago
    All the more reason to tax unearned income at a higher rate, no?
  - gaius 9y ago
    Also known as Corbynomics
  - toomuchtodo 9y ago
    But there is reason to do this. Not-yet voters inherit society and it’s infrastructure. There is value in what they’re inheriting. We’re just arguing about the amount of the transfer at this point.

anonuser123456 9y ago

Why should pensioners not face counter party risk like the rest of us?

rainbowmverse 9y ago
The whole point of a pension is to accept lower pay today to not have to worry about tomorrow. It's a structural way of dealing with the fact that most people don't know how to plan for the future and, before, just ended up dying in the streets in their 60s.
- lotsofpulp 9y ago
  That doesn't answer the question of why they shouldn't face counter party risk like everyone else though. Obviously, the government also doesn't know how to plan for the future.
- anonuser123456 9y ago
  What's wrong with dying in the streets in their 60s? They're better off than the 99% of humanity that lived before them. Why should the next generation pull the weight of the previous?
gaius 9y ago
Why should pensioners not face counter party risk like the rest of us? Pensioners in the private sector do face those risks.

bobcostas55 9y ago

These situations happen not because of any particular cases of mismanagement or lack of overseeing from the voting public. They are a fundamental feature of how incentives are structured. The idea that people can just "manage politicians" better is ridiculous.

Zach_the_Lizard 9y ago

> If we are going to be adults, these pensions are contractual and need to be paid out If we're going to be adults, we're also going to recognize that many of us were not adults when these contracts were drawn up and signed. Many of us were never even born, and some of those who were of the right age opposed them to some degree or another. Maybe we should recognize, in a truly adult fashion, that the mistakes of previous generations should not be passed on to the current generation. Maybe adults should recognize the math just doesn't add up. > It’s not a responsible behavior to use retirement plans as weapons at the 11th hour. It's not a responsible behavior to over promise pensions and bankrupt dozens of states either. Nor, in the pursuit of fulfilling those reckless promises, is it responsible to bankrupt future generations.

awinder 9y ago
I'm all for this generation deciding, collectively, that the previous generation did not appropriately fund government and making a deal -- through estate transfer taxation -- to make government whole again. How that's structured is up to debate, but let's not spike today's economy and today's society when the debt problem can be reasonably solved over a longer period, causing less downstream effects. Everyone from the previous gen. is culpable in this, but these people are also our fathers & mothers, so let's not try to handle this situation in the most abrasive way possible.
- tarr11 9y ago
  Even when pension reform proposals do not change benefits for current employees and retirees, and only apply to new hires, unions will resist fiercely, such as this case in Kentucky. > KEA opposes the pension reform, in which new hires will have to enter a hybrid cash balance plan, which differs from a traditional pension, and would limit new sick days that teachers can put toward their retirement. https://www.cnn.com/2018/04/11/us/kentucky-teachers-pension-governor/index.html https://www.cnn.com/2018/04/11/us/kentucky-teachers-pension-...
ThrowawayR2 9y ago
> If we're going to be adults, we're also going to recognize that many of us were not adults when these contracts were drawn up and signed. So are you okay with a future generation repudiating their contracts and obligations with you when you reach retirement age? After all, all of us are someday going to part of a "previous generation" and none of are so perfect that our generation has made no mistakes. Why do so many people behave as if aging is something that only happens to other people?