This fight is about the kids?

[JayB]

http://mercatus.org/sites/default/files/publication/Getting%20an%20Accurate%20Picture%20of%20State%20Pension%20Liablilities.Norcross.12.13.10_0.pdf

[j_b]

The funniest part is that the economists who claim today that public pensions are mostly unsustainable are exactly the same one who never saw the housing bubble coming and the attending speculation on wall street but JayB wants us to suspend disbelief so that fund managers should plan for bubble bursts the "experts" claim didn't exist.

[Crux]

Sure, a structural engineer should seriously consider design allowances for earthquakes. But would anyone fault the engineer who says something like, "If it hadn't been for the aerial bombardment, this building would be still standing."

 

 

[Jim]

Arm waving isn't changing the numbers. But continue the hysterics at will.

 

Baker got his numbers from figure(1) so I don't see what so arm wavy about it, nor is it hysterical to point out that you didn't understand figure(1) after claiming that you were some kind of expert (talk about shooting yourself in the foot).

 

No he didn't -- Jesus Christ! - figure 1 is just a comparison against 1) a 4% return (which has nothing to do with state pension assumptions) and 2) real stock market returns. If you can't grasp this fundamental point then there is nothing to discuss. Don't you understand what this relatively simple graph is showing?

 

No states were assuming such returns and actuary assumptions continue to be well above this - even in WA state.

 

So somehow, thru waving of a magic wand, state are going to add the needed capital to meet debt obligations - especially in the even tighter budget conditions - and when they have not done so in the past???? Well that's airtight logic.

[j_b]

The analogy is indeed so gratuitous that you might as well bring the bombers into the picture

[j_b]

No he didn't -- Jesus Christ! - figure 1 is just a comparison against 1) a 4% return (which has nothing to do with state pension assumptions) and 2) real stock market returns. If you can't grasp this fundamental point then there is nothing to discuss. Don't you understand what this relatively simple graph is showing?

 

$857 billion is the difference what these assets would be worth under reasonable assumptions and what they are worth today. I am sorry you can't see it. Your readers will have to assess your understanding of these things. I clearly already have.

[Jim]

No he didn't -- Jesus Christ! - figure 1 is just a comparison against 1) a 4% return (which has nothing to do with state pension assumptions) and 2) real stock market returns. If you can't grasp this fundamental point then there is nothing to discuss. Don't you understand what this relatively simple graph is showing?

 

$857 billion is the difference what these assets would be worth under reasonable assumptions and what they are worth today. I am sorry you can't see it. Your readers will have to assess your understanding of these things. I clearly already have.

 

Ah yes -reasonable assumptions - that being 1) that states were basing their projections on a safe 4% return - Which is false and 2) that though not addressed - that states were fully funding their debt obligations - also false.

 

So much for that arm waving exercise.

[Jim]

4% return assumptions - that's rich!!

 

fully funded pension obligations!

 

 

Unfortunately this bury the head in the sand logic is what has led to the high debt obligations and ultimately will cause more problems for taxpayers and retirees in the future, than if the problems were dealt with in a sustainable manner today. I much prefer having control over my own retirement in a 401k than having to deal with such shenagigans.

[JayB]

Sure, a structural engineer should seriously consider design allowances for earthquakes. But would anyone fault the engineer who says something like, "If it hadn't been for the aerial bombardment, this building would be still standing."

 

 

If the purpose of the building is to withstand aerial bombardment, then yes.

 

Pensions/annuities are supposed to be designed to provide a specific payout despite the inherent volatility and unpredictability of asset prices over time.

[ivan]

Pensions/annuities are supposed to be designed to provide a specific payout despite the inherent volatility and unpredictability of asset prices over time.

they even take the possibility of zombie-attacks into consideration?

[j_b]

$857 billion is the difference what these assets would be worth under reasonable assumptions and what they are worth today. I am sorry you can't see it. Your readers will have to assess your understanding of these things. I clearly already have.

 

Ah yes -reasonable assumptions - that being 1) that states were basing their projections on a safe 4% return - Which is false and 2) that though not addressed - that states were fully funding their debt obligations - also false.

 

So much for that arm waving exercise.

 

Nobody claimed anything you said and you know it. You are starting to look like a sore loser on this.

[JayB]

4% return assumptions - that's rich!!

 

fully funded pension obligations!

 

 

Unfortunately this bury the head in the sand logic is what has led to the high debt obligations and ultimately will cause more problems for taxpayers and retirees in the future, than if the problems were dealt with in a sustainable manner today. I much prefer having control over my own retirement in a 401k than having to deal with such shenagigans.

 

 

 

Both the public and public employee unions would have been much better off if the state had transfered this liability to private companies that the state had to send a check to every year.

 

Then the politicians would have had to make promises that they could actually keep, and fund them - on the books - every year.

 

Far too late for that now. The future is now in Costa Mesa

[Jim]

I heard that Martin Sheen was going to take over CA's pension fund.

[Jim]

$857 billion is the difference what these assets would be worth under reasonable assumptions and what they are worth today. I am sorry you can't see it. Your readers will have to assess your understanding of these things. I clearly already have.

 

Ah yes -reasonable assumptions - that being 1) that states were basing their projections on a safe 4% return - Which is false and 2) that though not addressed - that states were fully funding their debt obligations - also false.

 

So much for that arm waving exercise.

 

Nobody claimed anything you said and you know it. You are starting to look like a sore loser on this.

 

Doesn't the graph show a 4% return?

 

And yes, the article adroitly side-steps the issue of non-funding. Clever.

[j_b]

4% return assumptions - that's rich!!

 

fully funded pension obligations!

 

 

Unfortunately this bury the head in the sand logic is what has led to the high debt obligations and ultimately will cause more problems for taxpayers and retirees in the future, than if the problems were dealt with in a sustainable manner today. I much prefer having control over my own retirement in a 401k than having to deal with such shenagigans.

 

You still haven't answered the question as to why securities have regained and passed their high values from 2 years ago and explained how that is sustainable. Talk about burying one's proverbial head in the sand ...

[JayB]

 

"Gates Says Benefits Costs Hit Schools

 

Billionaire philanthropist Bill Gates will step into the national debate over state budgets Thursday with a call for states to rethink their health care and pension systems, which he says stifle funding for public schools...."

 

http://online.wsj.com/article/SB10001424052748704728004576176802077647470.html

 

 

[Crux]

To withstand warfare, the states necessarily depend upon the federal government for protection. In the financial sphere of conflict, I believe that protection is presently disabled, and no structural engineer(s) at any state capitol will successfully compensate for that vulnerability.

[j_b]

Ah yes -reasonable assumptions - that being 1) that states were basing their projections on a safe 4% return - Which is false and 2) that though not addressed - that states were fully funding their debt obligations - also false.

 

So much for that arm waving exercise.

 

Nobody claimed anything you said and you know it. You are starting to look like a sore loser on this.

 

Doesn't the graph show a 4% return?

 

the report never claimed that states based pension returns on 4%, nor did it say that all obligations were funded. In fact, if you really read it, I suspect Baker argues they don't need to be fully funded.

 

And yes, the article adroitly side-steps the issue of non-funding. Clever.

 

it especially wants to debunk regressive talking points about the major cause of the state budget crisis

[JayB]

http://www.thegatesnotes.com/TED/Speakers-Topics/Bill-Gates/Infographic-State-Budgets-Pension-Healthcare

 

 

[Jim]

4% return assumptions - that's rich!!

 

fully funded pension obligations!

 

 

Unfortunately this bury the head in the sand logic is what has led to the high debt obligations and ultimately will cause more problems for taxpayers and retirees in the future, than if the problems were dealt with in a sustainable manner today. I much prefer having control over my own retirement in a 401k than having to deal with such shenagigans.

 

You still haven't answered the question as to why securities have regained and passed their high values from 2 years ago and how that is sustainable. Talk about burying one's proverbial head in the sand ...

 

Well that's acutually pretty easy - the government kept some large institutions afloat, the private sector cut back (some say too much) and reduced overhead, and the economy is picking up steam ever so slowly. The stock market is generally a predictor of future conditions - so is thus anticipating future growth.

 

Now if you are some how making the convoluted argument that the government constantly goes into debt to uphold the stock market - and that debt is similar to the pension obligations of the states - well, that's an interesting take. Especially since the states can't sell bonds for that debt while the US government can - but you likely don't understand that state's cannot run deficits and the details of bond obligations.

 

But by the way, now that I've addressed your question you can now explain how the 4% graph is related to the actual states' rate of return and/or assumptions and how the state's debt obligation and lack of fund for the past 15 years is not relevant.

[Jim]

Ah yes -reasonable assumptions - that being 1) that states were basing their projections on a safe 4% return - Which is false and 2) that though not addressed - that states were fully funding their debt obligations - also false.

 

So much for that arm waving exercise.

 

Nobody claimed anything you said and you know it. You are starting to look like a sore loser on this.

 

Doesn't the graph show a 4% return?

 

the report never claimed that states based pension returns on 4%,

 

 

Hmmm-

 

Figure 1 below projects pension fund assets if pensions had continued to earn on average a 4.5 percent nominal rate of return in the period since the end of 2007.

 

Liar! So this is just a navel gazing existential exercise then?

[Jim]

Unfortunately such flawed logic and absolution from the facts is one of the reasons why the dems are losing the public trust. Just friggin come clean, figure out a solution that the public will go along with, and implement it.

 

But no. Just keep the train going as if there is no problem. While I'm in favor of unions and collective bargaining - I'm not in favor of debt obligations. So, as I've stated before, I'd favor moving to all 401ks for public employees.

[j_b]

401(k): A Bad Deal for Taxpayers

 

Updated February 28, 2011, 10:23 PM

 

Teresa Ghilarducci, the Bernard L. and Irene Schwartz Chair of Economic Policy Analysis at the New School for Social Research

[..]

 

401(k) plans are bad deal for taxpayers. Dollar for dollar, a traditional pension plan yields more pension benefits than do 401(k) plans because 401(k) management and investment fees are three times higher. And professionals who manage money in pooled pension funds usually get higher returns than workers who manage their own 401(k) accounts. The only clear winners when pensions switch over to the 401(k) plans are brokers and bankers.

 

The form of pension plan influences the type of employee attracted and retained. Want an old cop to retire? Want to offer a career path to a young, earnest would-be teacher? Use a traditional plan. Risk seekers and high turnover workers tend to prefer 401(k) plans; but do taxpayers prefer those characteristics in a public employee?

 

Last, the unintended effect of widespread 401(k) plans is more volatility. In contrast to traditional pensions and Social Security, 401(k) plans fuel bubbles and make recessions worse. When the economy is booming, 401(k) plan asset values soar, making people spend more and work less. Not what you want in an expansion.

 

Worse, when the economy plummets and takes 401(k) assets with it, people do the opposite; they cling to the labor market and rein in spending – again, two things you don’t want in a recession.

 

At least now public sector workers can retire with a guaranteed pension, making way for other people to get jobs.

 

401(k) plans for public employees will hurt private workers’ chances to get better pensions and make taxpayers pay more for less.

 

http://www.nytimes.com/roomfordebate/2011/02/27/why-not-401ks-for-public-employees/401ks-a-bad-deal-for-taxpayers

[Jim]

401(k): A Bad Deal for Taxpayers

 

Updated February 28, 2011, 10:23 PM

 

Teresa Ghilarducci, the Bernard L. and Irene Schwartz Chair of Economic Policy Analysis at the New School for Social Research

[..]

 

401(k) plans are bad deal for taxpayers. Dollar for dollar, a traditional pension plan yields more pension benefits than do 401(k) plans because 401(k) management and investment fees are three times higher. And professionals who manage money in pooled pension funds usually get higher returns than workers who manage their own 401(k) accounts. The only clear winners when pensions switch over to the 401(k) plans are brokers and bankers.

 

Yea, not joke! Who wouldn't want a deal where you have to put in little or nothing towards your retirement and get a substantial payoff!! This is rich!! Oh yea - it's a great deal - for those receiving the benefits - not the taxpayers on the hook for paying the benefits. And because these pension funds are, well, so underfunded - the taxpayers are going to be asked again soon to fill up the trough. Hmmmm, where is that 3 billion WA owes going to come from?

 

Newsflash - ever hear of no load mutual funds? Please educate yourself.

[rob]

Are you talking about public employee pension funds? Most of them are not funded by tax dollars.