State Bankruptcy

[prole]

Don't kid yourself, it's not elaborate.

[mattp]

Sorry, Jay, but I don't get you. Do you favor funding public funded health efforts, public health programs, or public health care services? Really? (In response to prole's post about how you did not support public health you stated that he didn't know your "motives.")

[JayB]

Sorry, Jay, but I don't get you. Do you favor funding public funded health efforts or, more specifically, public health care services? Really? (In response to prole's post about how you did not support public health you stated that he didn't know your "motives.")

 

Yes. I support paying what's necessary to deliver services that only the public government can deliver, and think it's reasonable to expect that the government uses the funds it has available to do so as cost effectively as possible.

 

I also support putting all services that *can* be performed just as well by the private sector out for bid. Doing so would make more money available for public health, public defenders, public education, public lands, etc - not less.

 

There's no necessary conflict between the two, but the prevailing opinion in progressive quarters seems be that public-sector cost-efficiency is the enemy of the public good, and that anyone who would, say, replace $23 an hour ticket-booth staff with electronic dispensers, eliminate self-nominated overtime, etc, etc, etc, hates poor people, etc.

 

I understand the psychological motives behind the caricature, but I don't think that they translate into either politics or policy that help the folks that could, say, use a helping hand from a public health agency much.

 

 

[tvashtarkatena]

I don't agree that sticking it to bondholders by destroying a state's credit rating is less politically costly than cutting the public employee compensation budget. Most voters, who neither work for the state nor hold these bonds, will care about the state's future ability to do its various jobs. It would seem that reducing the state's ability to obtain credit would have a greater, more long lasting negative effect.

 

I do agree, and this seems obvious, that public employee compensation is, by far, the largest part of any state's budget. Massive deficits mean that has to be reduced somehow, and there are only three ways to do that: layoffs and furloughs, cuts in direct compensation, or cuts in benefits. That's just simple arithmetic.

 

How we got here is instructive, but doesn't remove the problem.

[j_b]

Nobody is going to stick it to bondholders and there is no immediate crisis due to public employee pensions despite the rumor mongering by JayB and Jim: http://www.cbpp.org/cms/index.cfm?fa=view&id=3372 Make sure you read this report if you are going to continue spewing falsehoods.

[JayB]

Agree with the above (or rather, above the above) - but I'm not sure that the long-term impact on the state's finances and it's ability to function properly are what necessarily what determine how our state and local politicians cast their votes.

 

 

[j_b]

I also support putting all services that *can* be performed just as well by the private sector out for bid. Doing so would make more money available for public health, public defenders, public education, public lands, etc - not less.

 

Unfortunately JayB's support for the current status quo concerning health care access (50 millions without health care coverage) and impossibly rising health care costs, is very revealing of what he considers "services that can be provided by the private sector". What a joke!

[Peter_Puget]

I do agree, and this seems obvious, that public employee compensation is, by far, the largest part of any state's budget.

 

Really? I havent looked but it seems obvious to me this is false. Someone go look up the WA state budget and check this.

 

 

[Jim]

Nobody is going to stick it to bondholders and there is no immediate crisis due to public employee pensions despite the rumor mongering by JayB and Jim: http://www.cbpp.org/cms/index.cfm?fa=view&id=3372 Make sure you read this report if you are going to continue spewing falsehoods.

 

All this is saying is that the pension program deficits did not cause the current big budget hole from the reduced revenue stream. No friggin' duh!! As Tvash said - interesting, but still doesn't solve the unsustainability of the pension programs. They were unsustainabale during flush times, it was just papered over a bit with some extra revenue. Now that facade is stripped bare there is more urgency.

 

While I understand your apparant frustration with the financial wizards putting us in this bind, and the lack of wisdom of the state voters to tax a bit more, I don't understand the concept of keeping an unsustainable system in place that is robbing funds from,what I consider, more benifical uses for social programs.

[j_b]

Nobody is going to stick it to bondholders and there is no immediate crisis due to public employee pensions despite the rumor mongering by JayB and Jim: http://www.cbpp.org/cms/index.cfm?fa=view&id=3372 Make sure you read this report if you are going to continue spewing falsehoods.

 

All this is saying is that the pension program deficits did not cause the current big budget hole from the reduced revenue stream.

 

Totally untrue, as any reading longer than the few minutes you spent is sure to reveal. The report clearly says the pension liability problem and risk of defaulting on bonds have been greatly exaggerated and that we would be better off addressing these issues when they aren't confused with the decreasing revenue generated budget shortfall: "Unlike the projected operating deficits for fiscal year 2012, which require near-term solutions to meet states’ and localities’ balanced-budget requirements, longer-term issues related to bond indebtedness, pension obligations, and retiree health insurance — discussed more fully below — can be addressed over the next several decades. It is not appropriate to add these longer-term costs to projected operating deficits. Nor should the size and implications of these longer-term costs be exaggerated, as some recent discussions have done. Such mistakes can lead to inappropriate policy prescriptions."

 

No friggin' duh!! As Tvash said - interesting, but still doesn't solve the unsustainability of the pension programs. They were unsustainabale during flush times, it was just papered over a bit with some extra revenue. Now that facade is stripped bare there is more urgency.

 

untrue as well. The report clearly says that pension funds were paid in full up to 2000.

 

While I understand your apparant frustration with the financial wizards putting us in this bind, and the lack of wisdom of the state voters to tax a bit more, I don't understand the concept of keeping an unsustainable system in place that is robbing funds from,what I consider, more benifical uses for social programs.

 

You have no understanding whatsoever whether or not the current system of pension is sustainable, so I can clearly see the danger of having poorly informed people and people clearly meaning to hurt public employees decide on what to do when we are in the middle of major crisis used by neoliberals to remake the world in their own nasty image.

Edited January 28, 2011 by j_b

[j_b]

"States and localities have the next 30 years in which to remedy any pension shortfalls. As Alicia Munnell, an expert on these matters who directs the Center for Retirement Research at Boston College, has explained, “even after the worst market crash in decades, state and local plans do not face an immediate liquidity crisis; most plans will be able to cover benefit payments for the next 15-20 years.” [5] States and localities do not need to increase contributions immediately, and generally should not do so while the economy is still weak and they are struggling to provide basic services."

http://www.cbpp.org/cms/index.cfm?fa=view&id=3372

[Jim]

What I love about articles like this is the pile of unsubstantiated statements

 

Some observers claim that states and localities have $3 trillion in unfunded pension liabilities and that pension obligations are unmanageable, may cause localities to declare bankruptcy, and are a reason to enact a federal law allowing states to declare bankruptcy

 

No data cited - is in complete contrast to several studies done by non-partsian economic groups. Great -it's his "opinion"

 

So let's take a local look at WA's pension program. Here's what the govenor's office says:

 

The actuary's office has recommended that lawmakers contribute $774 million to pension funds this spending period, which ends in 2011. Gov. Chris Gregoire's budget allocates funding levels in line with the actuary's request.

 

"It is in the long-term interest of the tax-payers to fully fund all pension plans with consistent and adequate payments so as to avoid higher long-term costs. As the legislature grapples with the current budget shortfall, I hope they avoid making next year's pension problems bigger," the treasurer said.

 

And from the state actuary:

 

The State Actuary has recommended that all units of government - all teachers, and employees of the Public Employees Retirement System (PERS) - face significantly increased contribution rates until at least 2024. What's more, the State Actuary notes that the state needs to contribute almost $1.5 billion in next budget cycle, more than double the $770 million for this budget cycle, in addition to the need for local governments to nearly double their contributions to $1.7 billion in this cycle. He further reports that PERS I and the Teachers Employees Retirement System I are at risk of running out of assets prematurely, with the plans likely to show declines of between 15 and 30 percent.

 

Yea - no problem here. Now if you could provide more than an Op Ed I'll be willing to look at it. Where do think these funds are going to come from. It's not going to be from tax revenue - the voters are capping that. If the current trend extends itself it will come at the expense of the lower social and economic spectrum. While protecting public employee unsustainable pension programs you are advocating for less social good programs.

[j_b]

The article and the relevant studies are clearly referenced. Your post is quite dishonest.

 

 

[Jim]

The article and the relevant studies are clearly referenced. Your post is quite dishonest.

 

 

Ok then - maybe I am wrong - show me the analysis or data report for this statement:

 

Some observers claim that states and localities have $3 trillion in unfunded pension liabilities and that pension obligations are unmanageable, may cause localities to declare bankruptcy, and are a reason to enact a federal law allowing states to declare bankruptcy

 

 

Nothing is cited and is therefore opinion.

 

[j_b]

That statement doesn't need to be referenced as it is most certainly true and obvious. Are you contesting that observers have made these claims?

 

Nothing is cited and is therefore opinion.

 

liar.

[Peter_Puget]

 

"J_B maybe we should ask your old friend Hugo how to best win the hearts and minds of our fellow countrymen"

[tvashtarkatena]

Conservatives aren't exactly known for their originality. Still, the mileage they try to squeeze out of a tired joke is impressive.

[prole]

 

J_B maybe we should ask your old friend Hugo how to best win the hearts and minds of our fellow countrymen

 

Isn't that Hosni Mubarak, you nimrod? Or have I missed a funny?

Edited January 28, 2011 by prole

[Peter_Puget]

Missed something thats for sure......

[j_b]

Apparently, Adolf and Benito didn't tell Peter Puget last time these guys had lunch together.

[j_b]

Boy, that was a funny one. Wasn't it?

[Jim]

That statement doesn't need to be referenced as it is most certainly true and obvious. Are you contesting that observers have made these claims?

 

Nothing is cited and is therefore opinion.

 

liar.

 

Ok. I'm trying to be patient here. No reference but is "..most certainly true and obvious". That is nothing but your opinion based on? Done here if we can't even get you to agree on what is a fact.

 

A corollary statement would be "Some observers believe the moon is made of green cheese" Well I suppose that statement in itself is true - the underlying supposition is false. Get it?

[j_b]

In other words, you aren't contesting that observers made these claims. Therefore, besides the hair-splitting nonsense, your request for a citation documenting a fact that is widely known to be true is entirely unnecessary.

[Kimmo]

I do agree, and this seems obvious, that public employee compensation is, by far, the largest part of any state's budget.

 

Really? I havent looked but it seems obvious to me this is false. Someone go look up the WA state budget and check this.

 

 

come on man, he was driving down the road. with his ex-wife.

 

there were signs and things.

 

Wa state budget 2010

 

 

[Jim]

In other words, you aren't contesting that observers made these claims. Therefore, besides the hair-splitting nonsense, your request for a citation documenting a fact that is widely known to be true is entirely unnecessary.

 

No. Rather I'm saying that 1) it doesn't matter how many "observers made these claims" if there are no facts to back it up; 2) if you claim it is "widely known" then it should be readily easy for you to come up with a documented source, eh? and 3) Damn! You are whiny.