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What a pathetic ploy to divide the working class against each other. The reason states are short on cash is the race to the bottom we’ve all been participating

by ebbv 8y ago

What a pathetic ploy to divide the working class against each other. The reason states are short on cash is the race to the bottom we’ve all been participating in since the 1980s when government policy and general economic policy moved from focusing on keeping the middle class healthy to massive tax breaks and cuts for corporations and the wealthy. For the last nearly 40 years every state has been playing the game of trying to attract corporations with massive tax breaks against the promise of jobs. Then a lot of the time the promised jobs never appear. Meanwhile the state is still out millions or billions of dollars in revenue. Corporations and the wealthy can afford to hire lobbyists to write favorable policies. Working class people cannot and have been eating the brunt of all the tax breaks the rich and powerful and connected have received. Maybe a handful of people in some states have abnormally high pensions. That’s not the source of the problem. Those pensions were solvent until they were treated like a piggy bank by corrupt and bought politicians.

jinfiesto 8y ago
I'm not sure why this is so heavily down-voted. Pensions are surely a problem, but they are clearly a drop in the bucket compared to the revenue that states miss out on when they let corporations pit them against each other in race to the bottom behavior.
- bannedaccount 8y ago
  Because this is a conservative site where dissenting opinions are not tolerated.
- DoreenMichele 8y ago
  HN tends to react negatively to inflammatory language, such as What a pathetic ploy. I sometimes have mixed feelings about that, but generally agree that inflammatory language does not foster reasoned, meaty discussion.
- narag 8y ago
  Not sure why it was downvoted, but my bet is this that you insist in: Pensions are surely a problem, but they are clearly a drop in the bucket Pensions are NOT a drop in the bucket by any measure. Maybe for the USA they're less important. But for the rest, safety net is most of a country expenses. Then you add that population in the first world tends to shrink and the model in most countries where current workers pay for retired ones... and you have a very serious problem.
  - ams6110 8y ago
    That was my fault as well. Pensions are almost a form of a Ponzi scheme. They all will eventually collapse. Corruption in pension administration is also rampant.
    - vkou 8y ago
      If pensions are a ponzi scheme, so is the expectation that our economy will, on average, grow YoY. Yet, every single part of our society, from pensions, to investments, to government planning, to retirement advice for people working in the private sector is based on the insane notion that 3% GDP growth is perpetually sustainable.
    - ebbv 8y ago
      Pensions are not a pyramid scheme any more than any other form of retirement fund is. Give me a break.
      - someguydave 8y ago
        There is one retirement fund that isn’t a pyramid scheme: the kind where the retiree saves in his own account and faces investment risks like everyone else. Forcing taxpayers to shelter you from risk is slimy, even if you have a “negotiated agreement” signed by some politician.
        ebbv 8y ago
        You realize 401k programs at most companies are treated as a pool just like pension funds right? The difference is politicians had domain over the pension funds and decided to "borrow" from them and make them insolvent. The workers are not the ones to blame, the politicians who thought using the pension funds as a piggy bank are. Stop blaming the workers. They didn't cause this problem, and they paid into those retirement funds. The politicians who caused the problem are the ones who want you to blame the workers, stop being their patsy.
- bartart 8y ago
  Calstrs, which is only for teachers, has over 900,000 members, with a bit less than half currently working. The average pension payout is $50,000 and the average retired person under Calstrs worked for under 25 years. And this is only for teachers. https://siepr.stanford.edu/sites/default/files/publications/17-023_1.pdf https://siepr.stanford.edu/sites/default/files/publications/... The many tens of billions of dollars spent on pensions annually in California alone dwarf any tax breaks given to companies. And California is very stingy with those anyway. For comparison California's annual budget is just about $270bn according to Ballotpedia.
  - ebbv 8y ago
    I don’t even know where to begin your comment is so full of deliberate half truths. The people work under 25 years because you only need to work 20 to qualify. Why’s that? Because you only need to work that long to have paid enough into the pension fund to earn that retirement. Oh yeah that’s the detail everybody loves to skip over; these workers PAID into their pensions. They earned that money. Again, if the pensions aren’t solvent it’s because of corrupt politicians and nothing else. Stop trying to blame workers for receiving a benefit they worked for and deserve. And as far as the pension eclipsing tax breaks; another red herring. The pensions should be getting paid out of a relevant fund. AND while any one tax break may not match the payout of the overall fund there are many many corporate tax breaks written into the laws that collectively cut state budgets to shreds.
- charleslmunger 8y ago
  How much money would you consider to be a reasonable pension? LA's payment of pension obligations is 31% of their city budget. Many other cities see significantly more, and it's going to keep getting worse as more workers retire. https://calmatters.org/articles/commentary-surging-pension-costs-push-california-cities-toward-bankruptcy/ https://calmatters.org/articles/commentary-surging-pension-c...
- shkkmo 8y ago
  My guess is that the opening line is pure political rhetoric: "What a pathetic ploy to divide the working class against each other." While I agree with the overall point of the comment. I down voted it because of the tone with which it was made and it's lack of attempt to brings any facts or references to bear in reinforcing its claims. A prime example of states spending their money poorly to the benefit of big businesses is another HN topic. The headline is about eminent domain, but the article talks about the 3 billion "investment" that was given to Foxconn that seems unlikely to pay for itself even in an optimistically estimated 25 years. Edit: Also, several of the "factual" claims made were... hard to believe without any numbers to back them up.
  - bannedaccount 8y ago
    There's such a double standard, but no one is ever called to back up a claim like "small government is better for the economy" which I believe is just empirically false. You can plainly see states/countries that spend more on pensions and social safety nets have wildly better outcomes for their citizens. Yet don't see conservative making any reasonable arguments just well wore platitudes about "fiscal responsibly," but they never are forced to elaborate on what they mean by that or flagged or down-voted because this is a highly conservative that serves to reinforce the beliefs as opposed to challenge them.
    - deleted 8y ago
      [deleted]
- ams6110 8y ago
  A state that lets a potentially large employer go elsewhere also misses out on the revenue. So there's no reason not to compete for them, since most states will get income tax revenue from the employees if nothing else, along with general economic benefits of lower unemployment.
  - cc439 8y ago
    That and practically every economist agrees that taxes on businesses are pointless. Tax the people working for said business and then you won't have the cost of taxation merely passed on to the consumer. You'd also likely be able to pass par higher tax rates on the highest levels of executives that way.
pessimizer 8y ago
The worst part is citing the clearly outrageous pensions of a handful of well-connected elites, knowing they'll be used as stand-ins for the pensions of teachers and DMV clerks.
himom 8y ago
We ought not to focus on others whom were promised / earned a certain level of pension only to have it cut because other factions are jealous. Pensions are what many retirees need to survive. Reducing pensions in any way degrades the planned and promised standard of living of people often unable to go out again into the workforce. We gotta strengthen organized labor and fight for living wages and pensions for all persons. The 1% have way too much and keep getting richer, while the rest fall behind and the middle-class languishes.

by ebbv 8y ago

jinfiesto 8y ago

I'm not sure why this is so heavily down-voted. Pensions are surely a problem, but they are clearly a drop in the bucket compared to the revenue that states miss out on when they let corporations pit them against each other in race to the bottom behavior.

bannedaccount 8y ago
Because this is a conservative site where dissenting opinions are not tolerated.
DoreenMichele 8y ago
HN tends to react negatively to inflammatory language, such as What a pathetic ploy. I sometimes have mixed feelings about that, but generally agree that inflammatory language does not foster reasoned, meaty discussion.
narag 8y ago
Not sure why it was downvoted, but my bet is this that you insist in: Pensions are surely a problem, but they are clearly a drop in the bucket Pensions are NOT a drop in the bucket by any measure. Maybe for the USA they're less important. But for the rest, safety net is most of a country expenses. Then you add that population in the first world tends to shrink and the model in most countries where current workers pay for retired ones... and you have a very serious problem.
- ams6110 8y ago
  That was my fault as well. Pensions are almost a form of a Ponzi scheme. They all will eventually collapse. Corruption in pension administration is also rampant.
  - vkou 8y ago
    If pensions are a ponzi scheme, so is the expectation that our economy will, on average, grow YoY. Yet, every single part of our society, from pensions, to investments, to government planning, to retirement advice for people working in the private sector is based on the insane notion that 3% GDP growth is perpetually sustainable.
  - ebbv 8y ago
    Pensions are not a pyramid scheme any more than any other form of retirement fund is. Give me a break.
    - someguydave 8y ago
      There is one retirement fund that isn’t a pyramid scheme: the kind where the retiree saves in his own account and faces investment risks like everyone else. Forcing taxpayers to shelter you from risk is slimy, even if you have a “negotiated agreement” signed by some politician.
      - ebbv 8y ago
        You realize 401k programs at most companies are treated as a pool just like pension funds right? The difference is politicians had domain over the pension funds and decided to "borrow" from them and make them insolvent. The workers are not the ones to blame, the politicians who thought using the pension funds as a piggy bank are. Stop blaming the workers. They didn't cause this problem, and they paid into those retirement funds. The politicians who caused the problem are the ones who want you to blame the workers, stop being their patsy.
bartart 8y ago
Calstrs, which is only for teachers, has over 900,000 members, with a bit less than half currently working. The average pension payout is $50,000 and the average retired person under Calstrs worked for under 25 years. And this is only for teachers. https://siepr.stanford.edu/sites/default/files/publications/17-023_1.pdf https://siepr.stanford.edu/sites/default/files/publications/... The many tens of billions of dollars spent on pensions annually in California alone dwarf any tax breaks given to companies. And California is very stingy with those anyway. For comparison California's annual budget is just about $270bn according to Ballotpedia.
- ebbv 8y ago
  I don’t even know where to begin your comment is so full of deliberate half truths. The people work under 25 years because you only need to work 20 to qualify. Why’s that? Because you only need to work that long to have paid enough into the pension fund to earn that retirement. Oh yeah that’s the detail everybody loves to skip over; these workers PAID into their pensions. They earned that money. Again, if the pensions aren’t solvent it’s because of corrupt politicians and nothing else. Stop trying to blame workers for receiving a benefit they worked for and deserve. And as far as the pension eclipsing tax breaks; another red herring. The pensions should be getting paid out of a relevant fund. AND while any one tax break may not match the payout of the overall fund there are many many corporate tax breaks written into the laws that collectively cut state budgets to shreds.
charleslmunger 8y ago
How much money would you consider to be a reasonable pension? LA's payment of pension obligations is 31% of their city budget. Many other cities see significantly more, and it's going to keep getting worse as more workers retire. https://calmatters.org/articles/commentary-surging-pension-costs-push-california-cities-toward-bankruptcy/ https://calmatters.org/articles/commentary-surging-pension-c...
shkkmo 8y ago
My guess is that the opening line is pure political rhetoric: "What a pathetic ploy to divide the working class against each other." While I agree with the overall point of the comment. I down voted it because of the tone with which it was made and it's lack of attempt to brings any facts or references to bear in reinforcing its claims. A prime example of states spending their money poorly to the benefit of big businesses is another HN topic. The headline is about eminent domain, but the article talks about the 3 billion "investment" that was given to Foxconn that seems unlikely to pay for itself even in an optimistically estimated 25 years. Edit: Also, several of the "factual" claims made were... hard to believe without any numbers to back them up.
- bannedaccount 8y ago
  There's such a double standard, but no one is ever called to back up a claim like "small government is better for the economy" which I believe is just empirically false. You can plainly see states/countries that spend more on pensions and social safety nets have wildly better outcomes for their citizens. Yet don't see conservative making any reasonable arguments just well wore platitudes about "fiscal responsibly," but they never are forced to elaborate on what they mean by that or flagged or down-voted because this is a highly conservative that serves to reinforce the beliefs as opposed to challenge them.
  - deleted 8y ago
    [deleted]
ams6110 8y ago
A state that lets a potentially large employer go elsewhere also misses out on the revenue. So there's no reason not to compete for them, since most states will get income tax revenue from the employees if nothing else, along with general economic benefits of lower unemployment.
- cc439 8y ago
  That and practically every economist agrees that taxes on businesses are pointless. Tax the people working for said business and then you won't have the cost of taxation merely passed on to the consumer. You'd also likely be able to pass par higher tax rates on the highest levels of executives that way.

pessimizer 8y ago

The worst part is citing the clearly outrageous pensions of a handful of well-connected elites, knowing they'll be used as stand-ins for the pensions of teachers and DMV clerks.

himom 8y ago

We ought not to focus on others whom were promised / earned a certain level of pension only to have it cut because other factions are jealous. Pensions are what many retirees need to survive. Reducing pensions in any way degrades the planned and promised standard of living of people often unable to go out again into the workforce. We gotta strengthen organized labor and fight for living wages and pensions for all persons. The 1% have way too much and keep getting richer, while the rest fall behind and the middle-class languishes.