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You could increase the taxes on pensions to return them to sane levels.

xeromal 8y ago
I feel wary of doing this because I feel this is what's going to happen with my IRAs. I was promised that if I pay my taxes now I don't have to pay them when I'm old, but supposed the next generation decides they want to change the rules. Do I just pound sand and give up? Pensioners were given a promise and now we're changing the rules. It feels wrong even if the promise was unrealistic.
- dpatrick86 8y ago
  Just for clarification... you described a Roth. Usually, when someone says "IRA" without further qualification it would be assumed to be a traditional.
- deleted 8y ago
  [deleted]
- a_tractor 8y ago
  In a way, there is no way to complete avoid long-term risk. Sort of why we hang on to the saying "dont put your all your eggs in one basket." You should know that you are taking a risk by putting your money into your IRA. For all we know, the next generation could abolish private property and euthanize the elderly upon retirement. There is a lot that is wrong with the situation, and I am not sure what can be judged about their expectations being unrealistic without the benefit of hindsight that we have, but the principle I would use to determine what is fair is this, via Thomas Jefferson: does one generation have the right to impose debt on the next? I would say no. Did these pensioners think this scheme would need to be paid by the next generation, who would not benefit from it? Was there unanimous agreement about the pension schemes at the time? What did the detractors have to say about it? Who was right? I'd be interested in seeing the counter-arguments at the time, I bet we would learn a lot. Finally, this is how I see it: My father mortgaging a house that disappears when he dies, literally vanishes, except I inherit the mortgage that has to be paid off. Its a scheme that is literally the opposite of how western society become prosperous over time in the past. That said, I would be okay "taking responsibility" for past promises if we are the last generation to have to do that. As long as it is recognized as a total failure not to be tried ever again, I would feel ok about it in terms of helping people. Otherwise, if we are forced to deal with it in order to "save" the scheme itself or some convoluted spin that makes it look like successful government planning, then hell no. One way or another, someone is going to be making a sacrifice.
- wang_li 8y ago
  > Pensioners were given a promise and now we're changing the rules. There is a slight difference between the two situations you describe. That being that the promises being made to the unions were not being done by disinterested parties. Public services unions are notorious for being some of the largest donors to state and local candidates. The negotiators on the management side of the table are deeply beholden to the unions and have no personal interest in paying the obligations they are agreeing to, it's all put on the tax payer.
- ethicsengineer 8y ago
  Pensioners voted for free money at a cost to future generations, unsurprisingly future generations we're not interested in giving greedy old timers free money.
- spullara 8y ago
  Might be wrong but based on the numbers probably inevitable.

I feel wary of doing this because I feel this is what's going to happen with my IRAs. I was promised that if I pay my taxes now I don't have to pay them when I'm old, but supposed the next generation decides they want to change the rules. Do I just pound sand and give up? Pensioners were given a promise and now we're changing the rules. It feels wrong even if the promise was unrealistic.

dpatrick86 8y ago
Just for clarification... you described a Roth. Usually, when someone says "IRA" without further qualification it would be assumed to be a traditional.
deleted 8y ago
[deleted]
a_tractor 8y ago
In a way, there is no way to complete avoid long-term risk. Sort of why we hang on to the saying "dont put your all your eggs in one basket." You should know that you are taking a risk by putting your money into your IRA. For all we know, the next generation could abolish private property and euthanize the elderly upon retirement. There is a lot that is wrong with the situation, and I am not sure what can be judged about their expectations being unrealistic without the benefit of hindsight that we have, but the principle I would use to determine what is fair is this, via Thomas Jefferson: does one generation have the right to impose debt on the next? I would say no. Did these pensioners think this scheme would need to be paid by the next generation, who would not benefit from it? Was there unanimous agreement about the pension schemes at the time? What did the detractors have to say about it? Who was right? I'd be interested in seeing the counter-arguments at the time, I bet we would learn a lot. Finally, this is how I see it: My father mortgaging a house that disappears when he dies, literally vanishes, except I inherit the mortgage that has to be paid off. Its a scheme that is literally the opposite of how western society become prosperous over time in the past. That said, I would be okay "taking responsibility" for past promises if we are the last generation to have to do that. As long as it is recognized as a total failure not to be tried ever again, I would feel ok about it in terms of helping people. Otherwise, if we are forced to deal with it in order to "save" the scheme itself or some convoluted spin that makes it look like successful government planning, then hell no. One way or another, someone is going to be making a sacrifice.
wang_li 8y ago
> Pensioners were given a promise and now we're changing the rules. There is a slight difference between the two situations you describe. That being that the promises being made to the unions were not being done by disinterested parties. Public services unions are notorious for being some of the largest donors to state and local candidates. The negotiators on the management side of the table are deeply beholden to the unions and have no personal interest in paying the obligations they are agreeing to, it's all put on the tax payer.
ethicsengineer 8y ago
Pensioners voted for free money at a cost to future generations, unsurprisingly future generations we're not interested in giving greedy old timers free money.
spullara 8y ago
Might be wrong but based on the numbers probably inevitable.