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Only 6.4% of GDP is spent on government pensions - and almost 60% of that comes from state and local pensions - meaning less than 13% of federal spending is on

Only 6.4% of GDP is spent on government pensions - and almost 60% of that comes from state and local pensions - meaning less than 13% of federal spending is on federal pensions. Government wages are already crap. How much crapier do you want them to get?

edgyquant 3y ago
That’s a huge percentage of GDP? Why are you writing it off as “only.”
- onlyrealcuzzo 3y ago
  Because you need to spend something on pensions... Compare it to any other remotely advanced economy in the world, and you'll see it's not out of line. Any problems that exist are mostly with local and state government pensions, not the federal government.
jtbayly 3y ago
I’ll make you a deal. Bump the pay by 50% and cut the employees by 50%. Sound good to you? I’d love to see that. To hear that 6.4% of the GDP is spent on gov pensions is shocking to me. That means that we are spending 6.4% of everything on just the pensions of 16.1% of the workers. If we did the same for all workers, we’d be spending 39.8% of the GDP just on pensions. That seems outrageous to me, but I’m not an economist. Why would it be that high?
- Evidlo 3y ago
  If you cut 50% of employees you should double wages.
  - jtbayly 3y ago
    The point was we both get what we want through that compromise: less government spending and less government, but government employees paid better.
- onlyrealcuzzo 3y ago
  It's conventional wisdom to save ~10% for retirement, on top of being taxed (along with your employer) ~15.3%. That's ~25.3% of personal income going to retirement. This is inline with most advanced economies. Of that ~6.4% - A LOT of that is healthcare related costs. Considering that healthcare in the US is ~18.2% of GDP - and the vast majority of it comes from retirees - I don't know what you're expecting to see here. Essentially, you're shocked that healthcare in the US is ~18.2% of GDP, and ~75% of that comes from retirees... Social Security spending is ~5% of GDP, and Medicare spending is ~4% of GDP... That's for only ~19% of the population. And it doesn't even cover all of their healthcare costs. If you keep the same ratio for government employees, that comes down to ~2.84% of GDP for healthcare & 3.56% for what most people think of as pensions... And you're looking at ~65% of that spending coming from state & local governments, not the Federal government.
  - jtbayly 3y ago
    Only around 60% of the GDP is labor, though. 40% of the GDP on pensions doesn’t seem reasonable for a variety of reasons. If pensions are considered part of the labor cost, that would mean not 25% of income going to retirement, but 66%! Or, if pensions are separate from labor, you’ve used up all 100% of the GDP, just between labor and pensions. Neither seems reasonable. Furthermore, the US only spends 7.5% of the GDP on pensions all told.[0] If these numbers are equivalent, that means 85% of pension dollars are going to government workers. [0]: https://data.oecd.org/socialexp/pension-spending.htm https://data.oecd.org/socialexp/pension-spending.htm

edgyquant 3y ago

That’s a huge percentage of GDP? Why are you writing it off as “only.”

onlyrealcuzzo 3y ago
Because you need to spend something on pensions... Compare it to any other remotely advanced economy in the world, and you'll see it's not out of line. Any problems that exist are mostly with local and state government pensions, not the federal government.

jtbayly 3y ago

I’ll make you a deal. Bump the pay by 50% and cut the employees by 50%. Sound good to you? I’d love to see that. To hear that 6.4% of the GDP is spent on gov pensions is shocking to me. That means that we are spending 6.4% of everything on just the pensions of 16.1% of the workers. If we did the same for all workers, we’d be spending 39.8% of the GDP just on pensions. That seems outrageous to me, but I’m not an economist. Why would it be that high?

Evidlo 3y ago
If you cut 50% of employees you should double wages.
- jtbayly 3y ago
  The point was we both get what we want through that compromise: less government spending and less government, but government employees paid better.
onlyrealcuzzo 3y ago
It's conventional wisdom to save ~10% for retirement, on top of being taxed (along with your employer) ~15.3%. That's ~25.3% of personal income going to retirement. This is inline with most advanced economies. Of that ~6.4% - A LOT of that is healthcare related costs. Considering that healthcare in the US is ~18.2% of GDP - and the vast majority of it comes from retirees - I don't know what you're expecting to see here. Essentially, you're shocked that healthcare in the US is ~18.2% of GDP, and ~75% of that comes from retirees... Social Security spending is ~5% of GDP, and Medicare spending is ~4% of GDP... That's for only ~19% of the population. And it doesn't even cover all of their healthcare costs. If you keep the same ratio for government employees, that comes down to ~2.84% of GDP for healthcare & 3.56% for what most people think of as pensions... And you're looking at ~65% of that spending coming from state & local governments, not the Federal government.
- jtbayly 3y ago
  Only around 60% of the GDP is labor, though. 40% of the GDP on pensions doesn’t seem reasonable for a variety of reasons. If pensions are considered part of the labor cost, that would mean not 25% of income going to retirement, but 66%! Or, if pensions are separate from labor, you’ve used up all 100% of the GDP, just between labor and pensions. Neither seems reasonable. Furthermore, the US only spends 7.5% of the GDP on pensions all told.[0] If these numbers are equivalent, that means 85% of pension dollars are going to government workers. [0]: https://data.oecd.org/socialexp/pension-spending.htm https://data.oecd.org/socialexp/pension-spending.htm