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Don't forget cities that have influxes of young population so have increasing tax receipts but much lower legacy costs (retirees, infrastructure maintenance, st
by throwaway5752 7y ago
Don't forget cities that have influxes of young population so have increasing tax receipts but much lower legacy costs (retirees, infrastructure maintenance, stable growth rate education costs per capita). Most of those cities will mismanage the growth and 20-40 years from now you'll be reading about Nashville and how it was gutted when the software jobs dried up. These come in cycles and cities that have some sort of reason to exist (natural ports/harbors, river confluences, trade points, etc) will continue to exist and most of the rest will not.
- pm90 7y agoThis is a bad take. You're assuming that incoming folks won't change the politics of funding decisions of the city. In most cases, they do change them, and change cities for the better.
- appleshore 7y agoDo you have an example of that? Perhaps I’m biased being in LA and SF but those city budgets seem irreplaceable broken. Infinite amounts to pensions while no one can propose viable fixes to problems.
- quaquaqua1 7y agoThis is the correct opinion. What is worse is that the bugs are features. Politicians and their donors deliberately broke cities for their own personal financial gain,
- ajross 7y agoSorry, how is meeting pension obligations "irreplaceable broken"? They hired people for years with the promise of retirement pensions. It's a debt, not a budget item.
- wlesieutre 7y agoDo you not include debt payments in your budget planning?
- ajross 7y agoNot as an optional item to be ejected because of "better planning", no. Absent any budgetary concerns, there are hundreds of thousands of people who worked careers for these cities with the expectation that they could skip retirement savings because there was a pension. Throwing that out at the behest of a 20-something on HN who's fully funding a 401k with a tech salary isn't "responsible government", it's just selfish.
- wlesieutre 7y agoNobody said anything about ejecting it, just that the city budgets are screwed. They’re welcome to address that in whatever other way they’d like.
- tdfx 7y agoBecause the pension obligations are impossible to meet without bankrupting the local governments or causing them to massively slash other services. The financial liability of these underfunded and overpromised pensions should be shared with those whose unions corrupted the electoral incentives and now depend on these pensions. Either accept reductions to a reasonable level or watch the govt go bankrupt and get nothing.
- hash872 7y agoCities & states frequently offer absurdly generous pensions to public sector workers for political payoff or corrupt reasons. State workers can sometimes retire in their 50s with a lifetime of absurd benefits. Or, the infamous '13th check' where some innumerate officials mail pensioners one extra check in a given year when the pension does especially well financially- literally robbing from the fund's future. Many state & city pensions are underfunded because they are simply too generous. Public sector collective bargaining is fundamentally different from private sector. Benefits can't get too generous in the private sector because the bargaining is zero sum and the companies are rational- they can get absurdly generous in the public sector because the payers (politicians) are spending taxpayers' money and not their own. There's little incentive to think about the future
- deleted 7y ago[deleted]
- throwaway5752 7y agoFirst, you are overstating how generous public pensions are (and grossly overstating the differential in administration of private and public pensions). Second you think private sector pension planning is better. It is not. Pension funding reduces earnings (and bonuses) and companies will use overly optimistic pension fund growth projections to reduce current contributions, resulting in underfunded private sector pension plans. A great example of how this is handled is Patriot Coal (pension obligation spinoff of Peabody) and Magnum Coal (similar spinoff of Arch, acquired by Patriot). Those were spun off basically insolvent, with all pension obligations, and when the declared bankruptcy the retirees took haircuts and the remaining obligations were socialized with the PBGC (which I suggest you look into if you are interested in public and private defined benefit plan administration analysis).
- dredmorbius 7y agoAs with many companies, municipalities and states incurred liabilities for contractual promises whilt not fully funding them, kicking the can down the road. What typically happens is that either national government baols out the fund, retirees get squeezed, or both. The true beneficiaries are past taxpayers who benefitted from government service delivery based on promised pension benefits to employees, but who skipped on paying the bill at the time. Oddly, you hear far less about private sector failures in this regard. In part because defined-benefit plans are largely extinct, but the abysmal failure of individualised defined-contribution (401k / IRA) programmes is just the same problem undrr a different flag. But private sector has been dodging this far more than public. There's more to this, yes. Some of it is government corruption and graft. Mancur Olsen's "The Logic of Collective Action', describing both pensioners' and taxpayers' (mostly a small group of highly-motivated wealthy) very self-interested lobbying to maximise commitments whilst skirting payments is far more instructive.
- raverbashing 7y agoNot forgetting the absurd levels of NIMBYism and a coordinated effort to make the life of newcomers as hard as possible
- bufordsharkley 7y agoThe existence of Prop 13, coupled with pyramid-scheme-style approaches to financing municipal pensions, have led to disasters of financing. One can imagine a better world in which pension programs are effectively time-independent w.r.t financing (neutral for growth or shrinking), and more financing comes from sources that are likely agnostic to growth or reduction (like Land Value Tax), but the politics here... are not trivial.
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- colechristensen 7y agoI have not seen much of this positivity, that is people voting against their immediate interests to embrace long term change and saving for a different future. People vote for things which are better for themselves and for social issues they identify with, but rarely for things which actually cost them something.
- dredmorbius 7y agoAny particular analysis of this you're familiar with?
- throwaway5752 7y agoNo, just anecdote from my own lifetime and observations. I would just say the 2nd paragraph of https://en.wikipedia.org/wiki/Legacy_costs https://en.wikipedia.org/wiki/Legacy_costs is essentially the same thing I'm talking about.
- dredmorbius 7y agoThanks. The cited Lincoln Institute of Land Policy study also addresses this directly: "Pension Legacy Costs and Local government Finances" https://www.brookings.edu/wp-content/uploads/2016/06/pension-costs-local-finances-gordon.pdf https://www.brookings.edu/wp-content/uploads/2016/06/pension... (PDF) The similarity (referenced by the Wikipedia article) to technical debt was what I'd been thinking. More generally, markets and social-political systems have trouble recognising long-term risks and liabilities generally. Both are forms of debt. See also Adam Smith's growing vs. declining nations discussion in Wealth of Nations.
- nostrademons 7y agoA lot of those geographic reasons to exist will probably cease to exist in the next 50 years, as global warming opens up new shipping lines, makes previously verdant areas uninhabitable, makes uninhabitable deserts verdant, changes ocean currents, remakes national borders, and prompts large & powerful cities to divert rivers away from weaker and wetter ones. Containerization already led to large shifts in the fortunes of some port cities, and that was just a technological development that encouraged deepwater ports. Imagine if the sea lanes themselves change. I can see Northern Canada becoming an enormous boom area in 50 years, with the opening of the Northwest Passage for Asia <=> Europe trade, the need for resupply cities along that sea route, and the melting of the permafrost opening up parts of the tundra to agriculture or tar sands mining. Meanwhile, Florida and New Orleans may be underwater.
- deleted 7y ago[deleted]
- futureastronaut 7y ago> makes uninhabitable deserts verdant Is that likely? I wasn't aware of any predicted reversal of desertification. It may render some tundra provinces verdant however.
- nostrademons 7y agoThe Sahara's greening: https://www.independent.com/2019/01/10/greening-sahara/ https://www.independent.com/2019/01/10/greening-sahara/ https://www.sciencedaily.com/releases/2017/06/170608073356.htm https://www.sciencedaily.com/releases/2017/06/170608073356.h... https://www.thedailybeast.com/climate-change-is-making-deserts-greener?ref=home https://www.thedailybeast.com/climate-change-is-making-deser... Apparently the Kalahari is too.
- futureastronaut 7y agoThat's cherry-picking though. The Gobi desert is expanding very quickly, as is the Sahara into Sudan. The Chihuaha desert also is expanding in Texas, I'm sure there are many other examples. Maybe deserts will in general become greener, but for human aspirations they still seem to be deserts. The greening is problematic because it raises dew points and makes theses areas less habitable for humans.
- liveoneggs 7y agoNashville does have a reason to exist- country music, no-state-taxes-in-TN, not Memphis!.