10 ms·

>Many cities are perpetually broke because they owe more money in maintenance burden (fixing roads, pipes, etc) than they bring in through tax revenue. This is

by treis 5y ago

>Many cities are perpetually broke because they owe more money in maintenance burden (fixing roads, pipes, etc) than they bring in through tax revenue. This is just flat out not true. For all of the ink Strong towns spills they can't point to one municipality that's gone broke from infrastructure costs. The reality is that infrastructure just isn't that expensive in the grand scheme of things. It's 10% or less of the budget. Most of the money goes to cops, courts firemen, teachers, municipal workers and so on.

jdlshore 5y ago
I don’t think it’s necessary for them to point to a city that’s actually gone broke. They just need to demonstrate that the trend is unsustainable.
- xyzzyz 5y ago
  And they done nothing of the sort. I have yet to see a place where spending on infrastructure maintenance is above 20% of municipality budget. Usually it’s around 10%.
  - lcpriest 5y ago
    Have you seen a city with under-maintained infrastructure? https://www.artba.org/2021/03/23/over-220000-u-s-bridges-need-repair-latest-analysis-of-federal-data-finds/ https://www.artba.org/2021/03/23/over-220000-u-s-bridges-nee...
    - bcrosby95 5y ago
      $42bil to fix all structurally deficient bridges in the whole of the USA seems pretty cheap. I was expecting a much larger number considering the doom and gloom here.
      - lcpriest 5y ago
        First it's bridges, then it's roading, electric lines, gas lines, water lines, sewerage, civic buildings needing maintenance (schools, hospitals, community centers). There are endless projects that need money to maintain and the current system of sprawl spreads that money too thinly.
        swsieber 5y ago
        Yeah, from the article the baseline for the big stuff is 5 trillion > In America, we have a ticking time bomb of unfunded liability for infrastructure maintenance. The American Society of Civil Engineers (ASCE) estimates the cost at $5 trillion — but that's just for major infrastructure, not the minor streets, curbs, walks, and pipes that serve our homes.
        syshum 5y ago
        >>electric lines, gas lines, water lines, sewerage, All of these are for profit business that should not need tax money to maintain.. >There are endless projects that need money to maintain and the current system of sprawl spreads that money too thinly. If you look at where the actual tax money is being spent, is not being spread thin due to "system of sprawl" far from it. In fact if you look at the actual data most of the time smaller cities have better maintained roads, schools, hospitals, and community centers than the more densely populated area's. There is somewhat of a bell curve here, there is a sweet spot in population density, too much is a bad thing, and to little can be a bad thing.
        pas 5y ago
        Aren't they run like state owner utility companies though? They usually have no competition, state mandated prices, profits enshrined in law, etc..? > bell curve How much high-density cities with infrastructure in poor shape spend on infrastructure in percent of their budget? It might be that they still get a better bang for their buck, no?
flaque 5y ago
> For all of the ink Strong towns spills they can't point to one municipality that's gone broke from infrastructure costs. Ah, that's a bit of editorializing on my part. "Losing money" is probably more accurate than "going broke". That said, Strong Towns has plenty of case studies of different places, to varying degrees, losing quite a bit of money this way: - Spokane: https://www.strongtowns.org/journal/2018/10/24/dispatches-from-spokane-living-a-soft-default https://www.strongtowns.org/journal/2018/10/24/dispatches-fr... - Kanas City: https://www.strongtowns.org/journal/2020/5/5/kansas-citys-fateful-suburban-experiment https://www.strongtowns.org/journal/2020/5/5/kansas-citys-fa... - Cobb County: https://www.strongtowns.org/journal/2018/8/3/cobb-county-addicted-to-growth https://www.strongtowns.org/journal/2018/8/3/cobb-county-add... - Collin County: https://www.strongtowns.org/journal/2018/9/27/a-texas-sized-pavement-problem https://www.strongtowns.org/journal/2018/9/27/a-texas-sized-... - Baxter: https://www.strongtowns.org/journal/2015/1/18/the-classic-case-arp6t https://www.strongtowns.org/journal/2015/1/18/the-classic-ca...
- treis 5y ago
  I've read various reports from them and I've not seen numbers that stand up. I'm not going to go through 5 more of them in detail to find the same thing. If any of them have actual numbers showing infrastructure eating up say 30% of the budget id be happy to look. But I can all but guarantee that they'll be the same story. Infrastructure at 10% or less with criminal justice, fire, and schools eating up the money.
  - ggm 5y ago
    That infrastructure spend is too low. Steel and Concrete and buried utilities have a life. Many of the towns are up for significant capital investment beyond 10% maintenance. The spend is on 50s, 60s and 70s capex. It's getting old. Surely, on the risk side the estimated repair and replacement costs for bridges alone could drive a truck through this?
    - brutusborn 5y ago
      What is your basis for saying 10% is too low? I'm not suggesting that you are wrong, I just want to figure out how you would determine if the spend is too high or too low for any given town.
theptip 5y ago
The claim is not that some municipality has gone broke, it’s that they are underwater and only staying afloat by continuing the ponzu scheme. This post had some case studies: https://www.strongtowns.org/journal/2011/6/14/the-growth-ponzi-scheme-part-2.html https://www.strongtowns.org/journal/2011/6/14/the-growth-pon... one quote: > A small, rural road is paved, with the costs of the surfacing project split evenly between the property owners and the city. We asked a simple question: Based on the taxes being paid by the property owners along this road, how long will it take the city to recoup its 50% contribution. The answer: 37 years. Of course, the road is only expected to last 20 to 25 years. I’m not an expert here so I’d be interested in evidence to the contrary. But this sounds like a more nuanced point than the GPs TLDR.
- doikor 5y ago
  This why here in Finland a lot of rural roads are being converted back to dirt. Basically keep the asphalt for as long as it can be with cheap repairs and once it needs to be redone just rip it off and put some gravel. Maintenance for these is cheap using existing infrastructure (trucks and loaders that the municipality already owns for winter/snow). Basically every spring just relevel it with a blade attached to a truck and add a bit of gravel.
  - LargoLasskhyfv 5y ago
    I'd imagine that is bad for the environment, due to more/faster abrasion of the tires. More microplastics.
    - spurgu 5y ago
      Rural roads = not that much traffic.
    - theptip 5y ago
      Is tire wear => microplastics an environmental concern that has been quantified? This is a new concept to me and I have no idea how to weigh the potential costs of this factor.
miohtama 5y ago
While any muncipal might not be broken (can they go broken in the first place?) are there ones that are becoming unliveable and dangerous? Because infrastructure cost paid is not infrastructure maintenance debt owned. E.x. the recently collapse condominium in Miami.
- eru 5y ago
  > can they go broken in the first place? I guess if financial obligations exceed revenue (and assuming they can't borrow more), they go broke?
  - deleted 5y ago
    [deleted]
- makomk 5y ago
  If anything, the condominium collapse in Miami suggests that Strong Towns is worrying about the wrong things entirely. They've been pushing for denser development on the pretext that low-density, suburban single family homes are supposedly a Ponzi scheme with unaffordable maintenance costs, but maybe the real danger is all the high-density, privately owned reinforced concrete condo blocks. Past a certain point they're basically uneconomical to repair - the way governments often handle this for infrastructure like bridges is by just building a new one and demolishing the old, but there's no way a bunch of private individuals are going to be able to afford that out of the blue especially if they've retired. (Particularly given that they cost substantially more to build than detached single family homes in the first place!)
  - samsonradu 5y ago
    This is a legitimate concern and as an eastern european I’ve always wondered what happens to old condo buildings, of which we have plenty. Turns out every once in a while the gov picks up the tab and performs the reparations, while giving the residents an option to pay for the expenses during the next eg. 10 years or when selling their property. Some do refuse of course but mostly it works because the added value is quite high since it happens in hot areas where price/sqm is above avg. There are also estate investors buying bulk property in these old blocks knowing they will benefit from it, pushing retirees aside. There are still plenty of troublesome condo blocks laying around without anybody touching them, but this might be a decent approach.
dmos62 5y ago
Might not be relavant to the discussion, but social supporting structures like police and schools is infrastructure too, as in they're part of a foundation for a social system. What you refer to as infrastructure, I take it, is roads, water supply, electrical grid, etc., which are static structures, but they're not so different from a school, since both have a static and a dynamic element: the building and the operators. Hm, this rant got away from me. Just wanted to argue some terms.
- dfadsadsf 5y ago
  It make sense when we talk infrastructure cost vs density to separate infrastructure that’s affected by density vs one that is not. Density does not affect school or police cost much. School buses probably cost a bit more in suburbs but it is not major factor.
  - pas 5y ago
    The fact that school buses are needed seems to be a sign that residential areas are not sufficiently dense for kids to walk to school. (I know that some cities use school buses to provide equal opportunity by randomly assigning kids to schools, which of course would continue to happen in high-density area too.)
    - dmos62 5y ago
      School buses are also a sign that regular public transport is not good enough.
flomo 5y ago
It's also "old think". In modern developments all this infrastructure belongs to the HOA/development corporation, and it is their long-term problem. But yes, to a great degree this is stare at the potholes, not the pensions funds.
aledthemathguy 5y ago
fascinating! (now go figure out who's right. oh internet...)
hatchnyc 5y ago
Long before I ever heard of Strong Towns, probably decade(s) before it existed in fact, I observed a pattern as a teenager in my sunbelt home state in that there was perpetually a band of new development that was the "nice" part of town while previously "nice" areas were left to decay and become the "bad" parts of town. I didn't know anything about how this was financed nor would it have crossed my mind at that time, but it was quite evident to me even without having ever left suburbia nor lived long enough to see more than one cycle of development that neighborhoods were essentially considered disposable, and it struck me as a bit strange.
roenxi 5y ago
That isn't a realistic failure mode; nowhere is going to spend their way into bankruptcy on infrastructure. A rational if cynical actor would go for handouts to political supporters at the last minute - if you're hurtling into bankruptcy, go out with a bang! Realistically the mode is catastrophic failures on infrastructure. One might imagine a town descending into a public health emergency due to lead in the waterways for example. Or near collapses of major dams. Now I have no idea if things like Flint or Oroville have anything to do with the sort of issues Strong Towns identifies. Hopefully they are just localised incompetence. But if Strong Towns is pointing at a real thing then the symptoms would look like that.
- MereInterest 5y ago
  Flint in particular was incompetence at the state level, not local. Michigan passed a law saying that any bankrupt township can be run by an "emergency manager" who gets all local executive power. The mayor or city council no longer have any effective authority, nor do any other locally elected officials. It was the emergency manager for Flint who decided to switch water suppliers to reduce cost, and who decided not to use the chemical processing necessary for the new water supply to be compatible with the existing pipes. This was effectively a decision made at the state level that caused the Flint water crisis.
  - LargoLasskhyfv 5y ago
    Meanwhile... [1] https://duckduckgo.com/?t=ffab&q=thousands+of+more+towns+like+flint https://duckduckgo.com/?t=ffab&q=thousands+of+more+towns+lik...
lr4444lr 5y ago
Yeah, my research shows me the same. Strong Towns is contributing to what I think is an important conversation about responsible planning, but the budgets I've read are unambiguously clear: the costs balloons are public sector labor, not infrastructure. My local county population has been unchanged in almost 40 years and though we've had a growing debt that needs to be taken more seriously, it's not a crisis, building had been stagnant, and despite us having the first or second highest property taxes in the nation, home prices keep going up. I wanna give Strong Towns the benefit of the doubt, but there seems to be a palpable sub rosa hatred of the suburbs by urban planning blogs and academics, despite their intense desirability if you look at demand vs. supply.
stevespang 5y ago
Oakland, CA - - classic example, bankrupt more than once.
ArkanExplorer 5y ago
Most cities will spend more on pensions than on infrastructure - the average is 13.5% of total budgets: https://reason.org/commentary/city-budgets-bend-under-growing-pension-costs-and-dwindling-revenues/ https://reason.org/commentary/city-budgets-bend-under-growin... The pension systems across the West are fundamentally broken. If we're going to talk about ponzi schemes, pensions are the ultimate. We need to privatise pensions completely, and encourage people to work later into life. Corporations and governments should have no responsibility for pensions - if someone can physically work, but doesn't have the money to independently retire, then they should continue to work.
- hakfoo 5y ago
  Retirement is one of those things where it goes beyond raw economics into quality of life issues. It feels like we've broken the social contract when we say to the prior generation "okay, you did your best and sacrificed to try to build a better world for us, now keep working til you're 80 in spite of failing health and diminishing capacity." The problem with pensions isn't that the underlying math product was faulty. There are a bunch of assumed components in it-- expected retirement lifespan, rates of return on investments. There's no reason you couldn't build a robust and self-financing pension program by using conservative assumptions, but somehow the industry managed to consistently generate overly rosy models for decades. So who pays for the failure in due diligence and risk management? (I am assuming we want to actually make good for the people who contributed to these programs in good faith. It seems that most charges to fix pensions are about replacing defined benefit pensions with something lesser that demands a much higher degree of risk tolerance to have any chance of the originally promised return. I also wonder if there's some business benefits from retirement-motivated churn. At the top of the market, how much of high management is filled with people in their 60s who haven't had a fresh idea in years, but have reached a position of undisruptability? Having a low expected retirement age helps to cycle in fresh blood. Conversely, we've got a lot of seniors with cash crunches due to failed or insufficient retirement funding, stuck in low-skill jobs in a way that's likely depressing wages. The 72-year-old grocery cashier doesn't want to be earning $12 an hour, she wants to be at a rest home in Boca Raton. Send her there and the market wage rises to $15. A country that can generate a trillion dollar bookseller can find a non-house-of-cards way to care for its elderly.

by treis 5y ago

jdlshore 5y ago

I don’t think it’s necessary for them to point to a city that’s actually gone broke. They just need to demonstrate that the trend is unsustainable.

xyzzyz 5y ago
And they done nothing of the sort. I have yet to see a place where spending on infrastructure maintenance is above 20% of municipality budget. Usually it’s around 10%.
- lcpriest 5y ago
  Have you seen a city with under-maintained infrastructure? https://www.artba.org/2021/03/23/over-220000-u-s-bridges-need-repair-latest-analysis-of-federal-data-finds/ https://www.artba.org/2021/03/23/over-220000-u-s-bridges-nee...
  - bcrosby95 5y ago
    $42bil to fix all structurally deficient bridges in the whole of the USA seems pretty cheap. I was expecting a much larger number considering the doom and gloom here.
    - lcpriest 5y ago
      First it's bridges, then it's roading, electric lines, gas lines, water lines, sewerage, civic buildings needing maintenance (schools, hospitals, community centers). There are endless projects that need money to maintain and the current system of sprawl spreads that money too thinly.
      - swsieber 5y ago
        Yeah, from the article the baseline for the big stuff is 5 trillion > In America, we have a ticking time bomb of unfunded liability for infrastructure maintenance. The American Society of Civil Engineers (ASCE) estimates the cost at $5 trillion — but that's just for major infrastructure, not the minor streets, curbs, walks, and pipes that serve our homes.
      - syshum 5y ago
        >>electric lines, gas lines, water lines, sewerage, All of these are for profit business that should not need tax money to maintain.. >There are endless projects that need money to maintain and the current system of sprawl spreads that money too thinly. If you look at where the actual tax money is being spent, is not being spread thin due to "system of sprawl" far from it. In fact if you look at the actual data most of the time smaller cities have better maintained roads, schools, hospitals, and community centers than the more densely populated area's. There is somewhat of a bell curve here, there is a sweet spot in population density, too much is a bad thing, and to little can be a bad thing.
        pas 5y ago
        Aren't they run like state owner utility companies though? They usually have no competition, state mandated prices, profits enshrined in law, etc..? > bell curve How much high-density cities with infrastructure in poor shape spend on infrastructure in percent of their budget? It might be that they still get a better bang for their buck, no?

flaque 5y ago

> For all of the ink Strong towns spills they can't point to one municipality that's gone broke from infrastructure costs. Ah, that's a bit of editorializing on my part. "Losing money" is probably more accurate than "going broke". That said, Strong Towns has plenty of case studies of different places, to varying degrees, losing quite a bit of money this way: - Spokane: https://www.strongtowns.org/journal/2018/10/24/dispatches-from-spokane-living-a-soft-default https://www.strongtowns.org/journal/2018/10/24/dispatches-fr... - Kanas City: https://www.strongtowns.org/journal/2020/5/5/kansas-citys-fateful-suburban-experiment https://www.strongtowns.org/journal/2020/5/5/kansas-citys-fa... - Cobb County: https://www.strongtowns.org/journal/2018/8/3/cobb-county-addicted-to-growth https://www.strongtowns.org/journal/2018/8/3/cobb-county-add... - Collin County: https://www.strongtowns.org/journal/2018/9/27/a-texas-sized-pavement-problem https://www.strongtowns.org/journal/2018/9/27/a-texas-sized-... - Baxter: https://www.strongtowns.org/journal/2015/1/18/the-classic-case-arp6t https://www.strongtowns.org/journal/2015/1/18/the-classic-ca...

treis 5y ago
I've read various reports from them and I've not seen numbers that stand up. I'm not going to go through 5 more of them in detail to find the same thing. If any of them have actual numbers showing infrastructure eating up say 30% of the budget id be happy to look. But I can all but guarantee that they'll be the same story. Infrastructure at 10% or less with criminal justice, fire, and schools eating up the money.
- ggm 5y ago
  That infrastructure spend is too low. Steel and Concrete and buried utilities have a life. Many of the towns are up for significant capital investment beyond 10% maintenance. The spend is on 50s, 60s and 70s capex. It's getting old. Surely, on the risk side the estimated repair and replacement costs for bridges alone could drive a truck through this?
  - brutusborn 5y ago
    What is your basis for saying 10% is too low? I'm not suggesting that you are wrong, I just want to figure out how you would determine if the spend is too high or too low for any given town.

theptip 5y ago

The claim is not that some municipality has gone broke, it’s that they are underwater and only staying afloat by continuing the ponzu scheme. This post had some case studies: https://www.strongtowns.org/journal/2011/6/14/the-growth-ponzi-scheme-part-2.html https://www.strongtowns.org/journal/2011/6/14/the-growth-pon... one quote: > A small, rural road is paved, with the costs of the surfacing project split evenly between the property owners and the city. We asked a simple question: Based on the taxes being paid by the property owners along this road, how long will it take the city to recoup its 50% contribution. The answer: 37 years. Of course, the road is only expected to last 20 to 25 years. I’m not an expert here so I’d be interested in evidence to the contrary. But this sounds like a more nuanced point than the GPs TLDR.

doikor 5y ago
This why here in Finland a lot of rural roads are being converted back to dirt. Basically keep the asphalt for as long as it can be with cheap repairs and once it needs to be redone just rip it off and put some gravel. Maintenance for these is cheap using existing infrastructure (trucks and loaders that the municipality already owns for winter/snow). Basically every spring just relevel it with a blade attached to a truck and add a bit of gravel.
- LargoLasskhyfv 5y ago
  I'd imagine that is bad for the environment, due to more/faster abrasion of the tires. More microplastics.
  - spurgu 5y ago
    Rural roads = not that much traffic.
  - theptip 5y ago
    Is tire wear => microplastics an environmental concern that has been quantified? This is a new concept to me and I have no idea how to weigh the potential costs of this factor.

miohtama 5y ago

While any muncipal might not be broken (can they go broken in the first place?) are there ones that are becoming unliveable and dangerous? Because infrastructure cost paid is not infrastructure maintenance debt owned. E.x. the recently collapse condominium in Miami.

eru 5y ago
> can they go broken in the first place? I guess if financial obligations exceed revenue (and assuming they can't borrow more), they go broke?
- deleted 5y ago
  [deleted]
makomk 5y ago
If anything, the condominium collapse in Miami suggests that Strong Towns is worrying about the wrong things entirely. They've been pushing for denser development on the pretext that low-density, suburban single family homes are supposedly a Ponzi scheme with unaffordable maintenance costs, but maybe the real danger is all the high-density, privately owned reinforced concrete condo blocks. Past a certain point they're basically uneconomical to repair - the way governments often handle this for infrastructure like bridges is by just building a new one and demolishing the old, but there's no way a bunch of private individuals are going to be able to afford that out of the blue especially if they've retired. (Particularly given that they cost substantially more to build than detached single family homes in the first place!)
- samsonradu 5y ago
  This is a legitimate concern and as an eastern european I’ve always wondered what happens to old condo buildings, of which we have plenty. Turns out every once in a while the gov picks up the tab and performs the reparations, while giving the residents an option to pay for the expenses during the next eg. 10 years or when selling their property. Some do refuse of course but mostly it works because the added value is quite high since it happens in hot areas where price/sqm is above avg. There are also estate investors buying bulk property in these old blocks knowing they will benefit from it, pushing retirees aside. There are still plenty of troublesome condo blocks laying around without anybody touching them, but this might be a decent approach.

dmos62 5y ago

Might not be relavant to the discussion, but social supporting structures like police and schools is infrastructure too, as in they're part of a foundation for a social system. What you refer to as infrastructure, I take it, is roads, water supply, electrical grid, etc., which are static structures, but they're not so different from a school, since both have a static and a dynamic element: the building and the operators. Hm, this rant got away from me. Just wanted to argue some terms.

dfadsadsf 5y ago
It make sense when we talk infrastructure cost vs density to separate infrastructure that’s affected by density vs one that is not. Density does not affect school or police cost much. School buses probably cost a bit more in suburbs but it is not major factor.
- pas 5y ago
  The fact that school buses are needed seems to be a sign that residential areas are not sufficiently dense for kids to walk to school. (I know that some cities use school buses to provide equal opportunity by randomly assigning kids to schools, which of course would continue to happen in high-density area too.)
  - dmos62 5y ago
    School buses are also a sign that regular public transport is not good enough.

flomo 5y ago

It's also "old think". In modern developments all this infrastructure belongs to the HOA/development corporation, and it is their long-term problem. But yes, to a great degree this is stare at the potholes, not the pensions funds.

aledthemathguy 5y ago

fascinating! (now go figure out who's right. oh internet...)

hatchnyc 5y ago

Long before I ever heard of Strong Towns, probably decade(s) before it existed in fact, I observed a pattern as a teenager in my sunbelt home state in that there was perpetually a band of new development that was the "nice" part of town while previously "nice" areas were left to decay and become the "bad" parts of town. I didn't know anything about how this was financed nor would it have crossed my mind at that time, but it was quite evident to me even without having ever left suburbia nor lived long enough to see more than one cycle of development that neighborhoods were essentially considered disposable, and it struck me as a bit strange.

roenxi 5y ago

That isn't a realistic failure mode; nowhere is going to spend their way into bankruptcy on infrastructure. A rational if cynical actor would go for handouts to political supporters at the last minute - if you're hurtling into bankruptcy, go out with a bang! Realistically the mode is catastrophic failures on infrastructure. One might imagine a town descending into a public health emergency due to lead in the waterways for example. Or near collapses of major dams. Now I have no idea if things like Flint or Oroville have anything to do with the sort of issues Strong Towns identifies. Hopefully they are just localised incompetence. But if Strong Towns is pointing at a real thing then the symptoms would look like that.

MereInterest 5y ago
Flint in particular was incompetence at the state level, not local. Michigan passed a law saying that any bankrupt township can be run by an "emergency manager" who gets all local executive power. The mayor or city council no longer have any effective authority, nor do any other locally elected officials. It was the emergency manager for Flint who decided to switch water suppliers to reduce cost, and who decided not to use the chemical processing necessary for the new water supply to be compatible with the existing pipes. This was effectively a decision made at the state level that caused the Flint water crisis.
- LargoLasskhyfv 5y ago
  Meanwhile... [1] https://duckduckgo.com/?t=ffab&q=thousands+of+more+towns+like+flint https://duckduckgo.com/?t=ffab&q=thousands+of+more+towns+lik...

lr4444lr 5y ago

Yeah, my research shows me the same. Strong Towns is contributing to what I think is an important conversation about responsible planning, but the budgets I've read are unambiguously clear: the costs balloons are public sector labor, not infrastructure. My local county population has been unchanged in almost 40 years and though we've had a growing debt that needs to be taken more seriously, it's not a crisis, building had been stagnant, and despite us having the first or second highest property taxes in the nation, home prices keep going up. I wanna give Strong Towns the benefit of the doubt, but there seems to be a palpable sub rosa hatred of the suburbs by urban planning blogs and academics, despite their intense desirability if you look at demand vs. supply.

stevespang 5y ago

Oakland, CA - - classic example, bankrupt more than once.

ArkanExplorer 5y ago

Most cities will spend more on pensions than on infrastructure - the average is 13.5% of total budgets: https://reason.org/commentary/city-budgets-bend-under-growing-pension-costs-and-dwindling-revenues/ https://reason.org/commentary/city-budgets-bend-under-growin... The pension systems across the West are fundamentally broken. If we're going to talk about ponzi schemes, pensions are the ultimate. We need to privatise pensions completely, and encourage people to work later into life. Corporations and governments should have no responsibility for pensions - if someone can physically work, but doesn't have the money to independently retire, then they should continue to work.

hakfoo 5y ago
Retirement is one of those things where it goes beyond raw economics into quality of life issues. It feels like we've broken the social contract when we say to the prior generation "okay, you did your best and sacrificed to try to build a better world for us, now keep working til you're 80 in spite of failing health and diminishing capacity." The problem with pensions isn't that the underlying math product was faulty. There are a bunch of assumed components in it-- expected retirement lifespan, rates of return on investments. There's no reason you couldn't build a robust and self-financing pension program by using conservative assumptions, but somehow the industry managed to consistently generate overly rosy models for decades. So who pays for the failure in due diligence and risk management? (I am assuming we want to actually make good for the people who contributed to these programs in good faith. It seems that most charges to fix pensions are about replacing defined benefit pensions with something lesser that demands a much higher degree of risk tolerance to have any chance of the originally promised return. I also wonder if there's some business benefits from retirement-motivated churn. At the top of the market, how much of high management is filled with people in their 60s who haven't had a fresh idea in years, but have reached a position of undisruptability? Having a low expected retirement age helps to cycle in fresh blood. Conversely, we've got a lot of seniors with cash crunches due to failed or insufficient retirement funding, stuck in low-skill jobs in a way that's likely depressing wages. The 72-year-old grocery cashier doesn't want to be earning $12 an hour, she wants to be at a rest home in Boca Raton. Send her there and the market wage rises to $15. A country that can generate a trillion dollar bookseller can find a non-house-of-cards way to care for its elderly.