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  1. #1
    nee andante bechimo's Avatar
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    Default Public Sector Pensions

    What are your thoughts about public servants continuing to get substantial pensions even though they're no longer in line with private industry and are headed for serious financial difficulty? It makes me wonder who will be responsible for funding them when crunch time comes. Public Sector Pension bailouts anyone?

    Quote Originally Posted by Article
    There's one clear downside for the public employees: "We also know that the public-sector pensions are in deep trouble financially," Mitchell said, pointing to studies that suggest that they're underfunded by a total of $3 trillion, largely because governments have skipped payments. "Exactly what will be done about that, nobody knows."
    http://news.yahoo.com/s/ap/us_benefi...mdlcmJyZXdzb3Y-

  2. #2
    Dreaming the life onemoretime's Avatar
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    I'm sick and tired of private industry skimping on pensions just because they'd rather offshore to Bangalore.

  3. #3
    nee andante bechimo's Avatar
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    And another article from the Economist which sums the Public Sector Pension shortfall to $3.4 trillion!

    Quote Originally Posted by Article
    Given those conditions, the states’ pension promises should be discounted by the risk-free rate, or the yield on Treasury bonds. On that basis, total liabilities are $5.3 trillion, compared with $1.9 trillion of assets. The total shortfall of $3.4 trillion is the equivalent of a quarter of all federal debt.
    http://www.economist.com/node/172518...ry_id=17251840

  4. #4
    Senior Member lowtech redneck's Avatar
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    I'm a big fan of Governor Scott Walker, and I wish the midwest and rustbelt Republicans luck in their endeavors.

    Edit: Thank God I live in a right-to-work state.

  5. #5
    Dreaming the life onemoretime's Avatar
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    Why's that?

  6. #6
    Senior Member Lateralus's Avatar
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    I think we're realizing that defined benefit retirement accounts are not viable. Well, it's either that or they have been underfunded.

    That said, I don't think it's fair to not cover our obligations and pay these pensions.
    "We grow up thinking that beliefs are something to be proud of, but they're really nothing but opinions one refuses to reconsider. Beliefs are easy. The stronger your beliefs are, the less open you are to growth and wisdom, because "strength of belief" is only the intensity with which you resist questioning yourself. As soon as you are proud of a belief, as soon as you think it adds something to who you are, then you've made it a part of your ego."

  7. #7
    nee andante bechimo's Avatar
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    Quote Originally Posted by The Economist
    Calculating the potential exposure of taxpayers to pension promises is complicated. Much of the cost lies in the future, when existing employees retire. So a discount rate has to be applied to those future promises to calculate their present value. Following rules set down (rather shamefully) by the Government Accounting Standards Board, the individual states discount their pension liability by the assumed rate of return on the assets, in most cases around 8%.
    Are they on crack?

  8. #8
    Dreaming the life onemoretime's Avatar
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    Quote Originally Posted by Jenaphor View Post
    Are they on crack?
    In a deflationary environment, yes. In an inflationary environment, not so much.

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  10. #10
    Senior Member Beargryllz's Avatar
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    Quote Originally Posted by lowtech redneck View Post
    Ballsy, very ballsy, but I get the feeling this is not going to turn out well...

    People love collective bargaining, and what they passed was not actually a budget (they need a quorum for budgets, not stripping unions of their ability to bargain)

    http://www.jsonline.com/news/statepo...117656563.html

    Just before the Senate vote, a committee stripped some financial elements from the bill, which they said allowed them to pass it with the presence of a simple majority. The most controversial parts of the bill remain intact.

    That committee, formed just two hours earlier, quickly approved the bill as the lone Democrat at the meeting screamed that Republicans were violating the state's open meetings law - a claim Republicans disputed.

    "This is a violation of law!" bellowed Assembly Minority Leader Peter Barca (D-Kenosha).

    Senate Majority Leader Scott Fitzgerald (R-Juneau) ignored him and ordered the roll to be taken.

    Minutes later, the Senate took up the bill and passed it without debate.

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