public pension funds deficit

[ronbuck]

www.cnbc.com/id/41129099

In part:

States Warned of $2 Trillion Pensions Shortfall

Published: Tuesday, 18 Jan 2011 | 4:51 AM ET Text Size By: Nicole Bullock, Financial Times

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US public pensions face a shortfall of $2,500 billion that will force state and local governments to sell assets and make deep cuts to services, according to the former chairman of New Jersey’s pension fund.


Ron Chapple | Taxi | Getty Images
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The severe US economic recession has cast a spotlight on years of fiscal mismanagement, including chronic underfunding of retirement promises.

[rockon]

This should not really be a problem right? Just borrow more money from China or print more money to cover the deficit and let our children figure out how to deal with the problem down the road. That seems to be exactly what we continue to do. The latest election should have sent a message that we the people are tired of this way of doing business and like them or not this revolt has been led by the Tea Party. If your tired of the same old direction ya might want to think about supporting the only thing new in a long time. Lets keep the pressure on them.

[Savoir Faire-Demogague in NJ]

While the states that are in trouble now due to not funding their pension plans sufficiently and even forgoing annual contributions, the real problem is the chronically agreeing to unrealistic pension benefits.

[Savoir Faire-Demogague in NJ]

This should not really be a problem right? Just borrow more money from China or print more money to cover the deficit and let our children figure out how to deal with the problem down the road.
New York State came up with an ingenious strategy in 2010. They did not have the money to make the required annual contribution to the state pension plan, so they borrowed the money from the pension plan and used the borrowed money to make the 2010 contribution.

[rockon]

I think thats defined as robbing Peter to pay Paul and it is the way most things are being handled today. No matter what it comes back to the voter who is responsible for who represents them and how they do that. If we don't like how politics are working we need to vote them out.

[Savoir Faire-Demogague in NJ]

I think thats defined as robbing Peter to pay Paul and it is the way most things are being handled today.


I think you meant it is like robbing Peter to pay Peter.

[safeharbor37]

This should not really be a problem right?
Not really. Did it ever occur to anyone to simply cut benefits to match the money to pay the benefits? If that were done across the board [it's called austerity], the problem would be solved. If it is not done, the problem will be exacerbated.
Increasing tax [rates] will eventually result in less tax revenue [in the long run]. Increasing debt [by paying for what can't be paid for] will use up the revenue [in interest payments] to support the programs we're trying to protect.
The only reasonable solution is, "Don't spend above your income!" But that would require frugality, which isn't "cool" anymore. Everyone wants everything and wants to pay for nothing [[....wants a Free Lunch [School lunches anyone? Parents can't "afford" to feed their children.]]







`.

[Deleted]

... and breakfast... year round, even when school is not in session, at least here in AZ-- that on top of food stamps. So, basically, they only have to feed their kids on weekends......
I wish I got old when my grandparents did. Back then their retirement money meant something, came with a gold watch, and when you were not so old you are ready to die...

[safeharbor37]

"So, basically, they only have to feed their kids on weekends......" [with food stamps]

[fairlycrazy23]

Jan 18, 2011 16:36:44 GMT -5 safeharbor37 said:

This should not really be a problem right?
Not really. Did it ever occur to anyone to simply cut benefits to match the money to pay the benefits? If that were done across the board [it's called austerity], the problem would be solved. If it is not done, the problem will be exacerbated.
Increasing tax [rates] will eventually result in less tax revenue [in the long run]. Increasing debt [by paying for what can't be paid for] will use up the revenue [in interest payments] to support the programs we're trying to protect.
The only reasonable solution is, "Don't spend above your income!" But that would require frugality, which isn't "cool" anymore. Everyone wants everything and wants to pay for nothing [[....wants a Free Lunch [School lunches anyone? Parents can't "afford" to feed their children.]]
`.

The problem is the States are legally obligated to provide what they agreed to, so they can't just pay less. I think this is going to eventually lead to states declaring bankruptcy to get out of contractual obligations that they can no longer possibly meet.

The federal government could bail them out , or I guess the fed could open up there infinite checkbook and just buy up the 'liabilities'. But that would either be more debt, or inflation. And would simply kick it down the road again.
An economic recovery would likely kick it down the road too.

[steff]

I found an interesting waste of govt money today and couldn't help but wonder what would be said about it here.

My 16 year old son got 2 "solicitations"/junk mail today. One from the army and one from the marines. He's not old enough to enlist, he's not a member of ROTC, but he got useless mail from 2 military branches today. If he was 18 or even almost 18, I might understand him receiving this kind of solicitations from the military. But at only 16, I think it's a waste of money. If every male in his school also received them, then every male in the county, then in the state, etc.... it's quite an extensive waste of paper, money, postage that could easily be cut out and save some cash. It might just be a drop in the bucket savings, but every drop adds up.

And before anyone flips out, there isn't a single "attack" on the military in this post, I'm simply questioning the expense of sending these kinds of junk mail out to minors who aren't even old enough to enlist and aren't already on the military radar thru ROTC.

[Deleted]

I am wondering, steff... since your kid is in a charter school-- do they invade your school like they invaded my kid's public high schools? But, regardless-- my kids also got that stuff in the mail. None of mine enlisted, but 5 of their friends did, before they even graduated. So, yeah, if they are already targetting the kids for enlistment in HS, why do they need to send out fliers, also?

As for gov't waste-- when Brewer was trying to cut and save money, one of the gov't waste and abuse items she wanted to cut was the free cab rides for welfare medical to those that do NOT need the rides, which is probably 75%, from what I saw. Believe me-- it is very abused. Of course-- lots of cab drivers that make their money off the gov't contract work because they are too chicken to drive cash customers and maybe get robbed, raped, or killed, were very concerned, and took it to the company-- saying that their customers were telling them they had gotten letters from their (welfare) state insurance saying as of some date... Nov. 1, or something like that.. no more free rides due to changes in the system. The cab company told the drivers-- don't worry-- they can't cut the free rides. WELL-- lo and behold-- Gov. Brewer found out she could not cut those rides and other things in the state medical welfare system, or they would lose tons of federal money for this year that we really need to keep our thriving state welfare system thriving. SO-- rides were not cut. Waste?? Uhm.... yeah, and states being held hostage by the Feds, it seems.

[steff]

Yes, they also hit them up at school to enlist in the ROTC. which we had a good laugh at because the school he's in doesn't even have ROTC. So that would have been even more waste. Paying to send someone out to enlist kids in a program that doesn't even exist in his school. Intelligent spending there.

I should also mention that the junk mail he got today from the military had "free" offers with it. Send this back in and you can have a FREE backpack with "Marine" written on it. So now the military is offering swag gifts to minors too. More smart spending huh?

[billisonboard]

16 is not too early to get information on military service. The days of, "Congratulations, here is your diploma, now what are you going to do?" are gone. Schools in my home state at least have started to force kids to look beyond graduation well before that day comes. I have worked with the GEAR UP program. (Gaining Early Awareness and Readiness for Undergraduate Programs). A motto they use is something like: College: "Not Just a Dream, a Plan". The programs that I have seen don't just look at college but vocational programs and even military service. They start with freshmen, helping them understand what they need to be doing today to be prepared to do what they want to be doing four years from now.

[steff]

Going into the high schools to talk about military service is one thing. But sending out junk mail with a "freebie" attached to it is a waste of $$. All kiddo has to do is send back in a prepaid response card and he can have a free backpack. Of course, sending the card back in puts him on the military service radar. And visiting his school in particular was a huge waste. He's in a charter school where there is no ROTC program available and the majority of these kids are not only already accepted to college, they are taking courses. My kiddo already knows what college he's attending, is already taking college courses for college and HS credit and his classes are already geared towards a certain degree.