Jim

I know. Let's solve our immediate state budget by prompting Congress to cancel the joint strike fighter. I'm all for it. Meanwhile we have another $5B deficit hole coming up here in WA - and that is optimistic with the economy puttering along. Before the next legislative session convenes it is likely that the state will edit its revenue forecast down again. This is where the progress left fails for me. It all ends up arm waving with little pratical solution. Other than the obvious - cut services.

I'm not even saying anything about increases - Jesus - just keeping us from making the hole deeper with our limited existing resources. So your argument is let's keep digging because once we get the hole filled we might not get anymore dirt? Brillant.

Thanks. This is exactly what my concern is. We'll back the dumptruck of taxpayer revenue to backfill the hole rather than spend it on worthy programs - schools, medical care for the needy, and general social safety net programs. What - change anything?

Except - when you look at return on investment numbers more closely the difference between assumed and acutual returns is a bitch. From the Pew report: Still, some observers, including renowned financier and investor Warren Buffett,argue that current assumptions are too optimistic. From 1990 to 2009, states had a median investment return of 8.1 percent. But in the most recent decade, from 2000 to 2009, that figure was 3.9 percent - while assumptions were still 8 percent or higher. The stakes of this debate are high because when a state lowers its investment return assumptions, the projected value of its liabilities and the annual contributions required to meet them increase dramatically. This, in turn, expands the gap between liabilities and assets.

That's the average pension benefit for all living retirees and their widows/widowers. That includes people who stopped working *decades* ago. If you want a number that accurately reflects the dollar value of the pensions that recent and future retirees are entitled to, you need to get the data and determine the dollar value of pensions being paid to recent retirees. For a quick and dirty estimate of future liabilities, multiply that number times the compounded (n = number of years in the future) average wage growth in NY's public sector. Here's the stats San Jose: "Police and firefighters who retired in 2009-10 after at least 26 years of service collected an average starting pension of $119,000 a year. For other workers with similar service, the average was $63,500. The pensions come with a guaranteed 3 percent annual cost-of-living adjustment." That dollar value doesn't include retiree health insurance benefits. Just for fun, price out immediate annuities that feature survivor benefits and inflation protection at 3% and report back. Then you'll start to understand why the folks that are running the numbers (computing the total projected value of public employee contributions plus earning vs the value of pension obligations) are ringing the alarm bells. Here's a hint: the first value is significantly lower than the second. There's not enough money to fund the existing level of public services and pensions. Cutting services to fund pensions will only take you so far, because as in San Jose is projected to, you will arrive at the endpoint where pension payouts exceed all tax revenues. E.g. you cut all employees and the delivery of all services and there's still not enough money. Public employees should be *thankful* that people are pointing this out so they don't wind up the folks from Pritchard: http://www.cnbc.com/id/40791768/Alabama_Town_s_Failed_Pension_Is_a_Warning This is the heart of the issue. Do a little straight forward math and get labeled a regressive. With a little common sense here it could be made solvent and bring service levels (and jobs) up to a sustainable level.

While I would tend to look at things comprehensively, I can see why reasonable conservatives are quite leary of lumping revenues in before honest structual reform is tried. And yes, agree, the Bushie tax cuts for all need to go. That would be a start and should be a good place to begin. Ok - we let these lapse and it's time for some reform.

I'll avoid the cirle-jerk discussion that will ensue, but - it doesn't matter the cause of pension fund slides. States can't run a deficit so they have to deal. And so far the result is cutting sevices rather than scaling back on pensions, no matter what size, that you could not get by investing your own money and getting a reasonable return. Thanks taxpayers! The recokoning is on the way on the state level. Feds next.

Ah. So I guess this is where we part philosophically. While liberal socially I'm fiscally conservative - basically because I generally like the idea of accountability with tax payer money. And I want it to be used fugally so programs I support get their funding. So - no, I don't support the guaranteed benefits - at taxpayer expense, when said taxpayers have to figure their own way out.

Thanks for the cepr blog opinion post. Meanwhile, back to reality. NYT: No municipality will sustain more damage than New York City, which next year faces a mind-boggling pension tab of $8.35 billion - a 19% increase in one year - at a time when Mayor Bloomberg and the City Council are forced to hack away at practically every other expenditure. And the devastating drain will keep getting worse unless Albany lawmakers finally stand up to the public employee unions, dump the current retirement system and replace it with something taxpayers can afford. Until that day, the city faces agonizing tradeoffs. Take, for example, the Fire Department's boneheaded plan to charge drivers as much as $490 for responding to accident scenes. Is it any wonder, when the FDNY spends more on pensions and other fringe benefits than it does on salaries? Then there's Bloomberg's plan to shed 6,000 of the schools' 80,000 teachers, including 4,500 layoffs. The reduction is driven in large part by the almost $3 billion the city will owe the teachers' retirement fund next year. This is what happens when annual retirement costs mushroom to consume one out of every eight dollars in the city budget. That sum is enough to cover the entire annual budget of the State of Maine. And it's enough to make you sick - if you think about what else the city could be doing with that money. The year-to-year increase alone - $1.2 billion - would cover hiring 18,000 new teachers, 17,000 firefighters or 15,000 cops. Yea, why make structual changes that will reinforce sevices when you can just ignore it?

Yea, yea. We can trot out these dueling rags again. We've already done that - thanks Oregon Public Employees Fact(?)Sheet. Who paid for that? The problems with the Center for State and Local Excellence (uh-huh)report most often cited and the Rutgers study have been pretty well hashed out - under estimating benefit values, no merit comparision only time-in-grade; which I remember as a great euphemism in the federal government; greater job security as noted by much less percentage of job loss compared to private sector in this downturn; increasing benefit package value as medical costs increase; and percent return on pension "investments" compared to 401k returns - thanks taxpayers! In California, the state pays 100 percent of health care costs for retired state workers and 90 percent of costs for retirees' families. Whoot! That on top of generous pensions that you could never get a similar return even with 15% interest. Yea, no changes needed.

Don't get your shorts twisted son. Tweaks, such as going to all 401k plans, increased employee contributions for health care, and shaving off salaries at the top end would lend substantial savings. The present standard isn't sustainable.

Thanks. I have had about 5 years in federal employment and went running from it. It had a pretty good pay program, yearly boosts no matter how you performed, promotions on top of that, great benefits, and excellent pension. And it friggin' drove me crazy watching the deadwood get paid the same or better than me for just putting in time. Plus, it became obvious the crew I was working with just wasn't nimble enough or had the needed technical skills to do the sophisticated science the agency needed. So rather than manage consulting scientists I jumped at the chance to actually design and implement ecological studies. I just think some tweaks are necessary for the system, particularly with pensions and benefits.

We'll find out soon enough when the data are coughed up. Doubtful any folks who are humping their butts - such as teachers - are in the group - likely candidates from the District Office, however.

Meanwhile. SALEM, Ore. — Documents released Monday by the Oregon Public Employees Retirement System show former University of Oregon football coach Mike Bellotti is the state's top public pension beneficiary. Bellotti collects nearly a half million dollars annually in pension checks — more than $41,000 per month. 8D The names of about 100,000 retired public employees in Oregon and how much they receive in pensions are being made public as part of a court settlement between the state retirement system and two newspapers. The Oregonian and The Statesman Journal demanded the records last year to shine a light on state spending. Bellotti told The Oregonian on Monday evening that he simply accepted the package he was offered when he signed on at the university in 1989. Bellotti said the pension was a fraction of his final annual compensation from the university, which he said was between $1.9 million and $2 million. The Statesman Journal says PERS pays out more than $230 million a month to all beneficiaries combined. The Oregonian reported that 837 pensioners get more than $100,000 a year.

One of my brothers from back east was skiing at some PA resort - Shawnee maybe? Anyway, he's next in line for a chair and the friggin' thing drops to the platform in front of him. They stop the lift, drag it aside, start it up and yell - next! Bolivia - it's rare the snow season there cooperates for good skiing. O cada muerte de obispo! There's some great looking volcanos, if your lungs can handle it, but being so close the equator makes the snow conditions, well, interesting. Try skiing among penitentes as tall as you. Buena suerte!

Swiftboating. Palin Bachman Cain Gingrich Jesus, Mary, and Harry. This group deserves all the derision that comes their way. They're wackos.

Falafel

Even though you claim it's so obvious that you can do the math in your head, it still doesn't add up: the Greek economy was growing at 4.5%/yr since 2000, tax evasion and corruption were rampant, the financial crash and global economic down turn tanked the Greek economy, revenue decreased radically which was compounded by austerity measures, and you conclude they can't pay their debt because public employees have it too easy? Yea. And what is known now is that growth was floated on a sea of false premises. Reality is a bitch. Now what?

Oh, don't get me wrong. The financial sector also is complicit. But crash or not, this reckoning was coming. Just a bit quicker now.

Seriously, it's not an incipient plot. It's basic math. And do not suppose that this is the end. This is only the beginning of the reckoning. This is only the first sip, the first foretaste of a bitter cup which will be proffered to us year by year.....

So your argument is that the private sector in Greece was just as insoluble as the public sector??!! Don't think so. There are some good studies showing how, when taking in actual hours worked, benefits, and pensions, that the long-term compensation for public employees is a notch above the private sector. And that can be good - providing a base for healthcare - maybe some day - or it can be not good - driving debt obligations. I mean really - 20 yrs of federal service and you get life-time medical care comesurate with what you had while working? For instance. Or a pension that in no way you could have saved for and gotten an interest rate that would have netted 30% of what is guaranteed - despite falling interest rates. Yea, a bargin for the taxpayer. More specifically with Greece - through either gile or incompetence they left off about $40B in their debt obligations when applying for EU status. Oopsee! Thatand public reiterment at 55? Oh yea, no role here.

It's not only the size of the debt that folks with money to invest in bonds worry about, it's the ability to repay it. If it was all about the numbers, the yield on Spain and Italy's debt wouldn't be heading north rapidly despite the ECB's best efforts to keep a lid on them. We could find ourselves in the same boat, and rather quickly. I would agree with this. The numbers posted re: debt quickly point to a need for a change in the US budget policy. And yes, forward looking debt obligations play a big role here. While the neoliberal financial creeps had a major role here, some of this is just shining some light on unsustainable practices. Greece did a good job of shinning up a dented penny and the other Europeans casted a blind eye to it when cobbling together the EU. Really, their debt obligations, population curve, reiterment age, and tax collection structure was already heading them for a cliff. Simialarly in the US we have unsustainable promises to federal and state employees, flushing of treasure down the worldwide military adventure toilet, and a Congress with not too much on their mind but re-election. Difficult to be optimistic about where this is going.

Glad to see things are back to abynormal 'round here.

Maybe it's the folks from Exit 38 who have moved into town now that the snow is flying.

The latest EU agreement has the banks taking a 40% haircut. Ouch! I suspect it is going to get more like a Marine buzz shortly, there is no choice, even with the austerity plans.