california pension troubles

[audrey_girl]

fyi:

http://www.contracostatimes.com/california/ci_14825623

more really bad news

[thriftyandboringinohio]

Re: california pension troubles

fyi:

http://www.contracostatimes.com/california/ci_14825623

more really bad news

I read it.
Those numbers are astonishing - there's no plausible way the retirees will get what they were promised.

[don]

Re: california pension troubles

The word here is that anybody that can take public retirement better take it now. The political consequences of cutting back on existing retirees benefits are seen as too high, especially with the inflation bazooka handy to handle those aging folks.

[c1ue]

Re: california pension troubles

The word here is that anybody that can take public retirement better take it now. The political consequences of cutting back on existing retirees benefits are seen as too high, especially with the inflation bazooka handy to handle those aging folks.

That may not matter if there is not enough cash to pay...

http://www.businessweek.com/news/201...ller-says.html

April 5 (Bloomberg) -- Los Angeles will run out of cash on May 5, city Controller Wendy Greuel said today in a release in which she requested a $90 million transfer of reserve funds to pay bills.
The controller said she received a letter from the Los Angeles Department of Water and Power today indicating the utility wouldn’t send an anticipated $73 million payment to the city’s general fund. That money is part of an annual contribution of 8 percent of power revenue that the utility makes in lieu of paying taxes to the city, according to Ben Golombek, a spokesman for the controller.
“The question I have been asked most often during the budget crisis is, ‘When will the city run out of money?” Greuel said in the e-mailed release. “Unfortunately, we finally have the answer.”

Pension payments are very similar to payroll payments...

[rabot10]

Re: california pension troubles

I read it.
Those numbers are astonishing - there's no plausiblel way the retirees will get what they were promised.

They could start smoking 3 packs a day, add in eating at MacDonald’s a few times a day and I think they get there moneys worth. Works for me!

[metalman]

Re: california pension troubles

I read it.
Those numbers are astonishing - there's no plausiblel way the retirees will get what they were promised.

quote of the day... "It is such a gargantuan number," Nation said. "If you have a state budget general fund of $85 billion, and you are short a half a trillion dollars, it's going to be very tough to make up that shortfall."

very tough. very. :eek:

[thriftyandboringinohio]

Re: california pension troubles

quote of the day... "It is such a gargantuan number," Nation said. "If you have a state budget general fund of $85 billion, and you are short a half a trillion dollars, it's going to be very tough to make up that shortfall."

very tough. very. :eek:

Stick a fork in it, it's done.

The scenarios for widespread non-payment of pensions (by either outright default or by severe inflation that renders them worthless) are fascinating to think about. It could move people who are law-abiding and quiet into other behaviors by the millions.

[ThePythonicCow]

Re: california pension troubles

Stick a fork in it, it's done.

The scenarios for widespread non-payment of pensions (by either outright default or by severe inflation that renders them worthless) are fascinating to think about. It could move people who are law-abiding and quiet into other behaviors by the millions.

It leads to nationalization of most large pension funds. That is clearly the present bubble -- put it all on Uncle Sams' tab.

The pensioner class is too big to fail (too many votes.) So they will get some money; likely not all that was promised (they lack the power of Goldman Sachs general partners) but some money. The money may be so devalued it leaves them scrounging in dumpsters for enough food, but they will eat if they manage their affairs adequately.

Once Uncle Sam is carrying more weight than he can possibly support, and more importantly perhaps, once the substantial majority of Americans are dependents of their federal government, then Uncle Sam gets knee-capped. The financial, economic, commercial, political and legal independence of the United States is subordinated to larger forces "for our own good." Since most of us will have some critical dependency on the United States government by that point, most of us will acquiesce. Those who resist will become dependents by other means (e.g. -- prison.)

Bye, bye Miss American Pie.
I took my Lexus to the Levy
'cause my Chevy had died.
Good 'ol boys drinking whiskey and rye,
singing this will the day that she died,
this will be the day she died.

[ASH]

Re: california pension troubles

The scenarios for widespread non-payment of pensions (by either outright default or by severe inflation that renders them worthless) are fascinating to think about. It could move people who are law-abiding and quiet into other behaviors by the millions.

Semi-tongue-in-cheek: This is the beauty of stiffing pensioners. Economic stress on young men in their 20's -- especially those who aren't grounded by jobs or families -- risks violent upheaval. Economic stress on pensioners will make them vote, but the potential for widespread violent antisocial behavior is rather less.

I don't mean to disrespect pension-aged folks, but my observation is that the older I get, both my physical capacity for violence and my tolerance of risk have decreased. I am simply extrapolating a bit into my future, and generalizing.

Again, semi-tongue-in-cheek: When things get really tight, there will still be more working-age folk than retirees, and they will vote their immediate self-interest. I don't think a potential wave of elder crime will deter them. I think the workers are likely to tolerate somewhat higher taxes -- especially upon the wealthy -- but I don't think they are going to tolerate a division of the pot that gives retirees everything they've been promised. More likely, the workers demand something like the same level of services they presently enjoy, and what is left over goes to support retirees.

[audrey_girl]

Re: california pension troubles

Semi-tongue-in-cheek: This is the beauty of stiffing pensioners. Economic stress on young men in their 20's -- especially those who aren't grounded by jobs or families -- risks violent upheaval. Economic stress on pensioners will make them vote, but the potential for widespread violent antisocial behavior is rather less.

I don't mean to disrespect pension-aged folks, but my observation is that the older I get, both my physical capacity for violence and my tolerance of risk have decreased. I am simply extrapolating a bit into my future, and generalizing.

Again, semi-tongue-in-cheek: When things get really tight, there will still be more working-age folk than retirees, and they will vote their immediate self-interest. I don't think a potential wave of elder crime will deter them. I think the workers are likely to tolerate somewhat higher taxes -- especially upon the wealthy -- but I don't think they are going to tolerate a division of the pot that gives retirees everything they've been promised. More likely, the workers demand something like the same level of services they presently enjoy, and what is left over goes to support retirees.

as always - interesting post Ash - but won't the really talented, hard working decide just to up and leave?

[ThePythonicCow]

Re: california pension troubles

More likely, the workers demand something like the same level of services they presently enjoy, and what is left over goes to support retirees.

I was agreeing with your post until this last sentence.

I doubt that the workers will get their current level of services either.

It's going to suck for almost everyone. "They" are just trying to let the air out of the balloon slowly enough and evenly enough that nothing goes Pop! too loudly in the night.

[ASH]

Re: california pension troubles

I was agreeing with your post until this last sentence.

I doubt that the workers will get their current level of services either.

It's going to suck for almost everyone. "They" are just trying to let the air out of the balloon slowly enough and evenly enough that nothing goes Pop! too loudly in the night.

Yeah, you're right.

I like what you said elsewhere about "payments which can't be made... won't"... or words to that effect. It is going to suck for (almost) everyone.

[ThePythonicCow]

Re: california pension troubles

as always - interesting post Ash - but won't the really talented, hard working decide just to up and leave?

Like ... where to? After 200 years of "America First, America Best" propaganda patriotism, with few of us speaking any language but English and with all the other English speaking countries (as well as most other countries) too small or too cold (Canada) or else also in deep financial trouble, ... there is zip, zero, nadda chance of some mass emigration of Americans anytime soon.

[ASH]

Re: california pension troubles

as always - interesting post Ash - but won't the really talented, hard working decide just to up and leave?

Hi AG. Good thread; glad to see you posting.

I think you're right that some of them will. I like the idea that folks with some initiative would pull up stakes and strike out for a new land of opportunity, just like those who currently immigrate to America (and those who did so in the past).

I guess that might not reduce the tax base by much immediately, or have much impact upon the ratio of workers to retired, but more likely would slow the rate of innovation and growth of new businesses. Positive feedback with negative consequences for economic growth.

But where do you think these talented and hard-working folks might go? Would they take me with them, and could I find a job once I got there? :confused:

Is there a low-tax country with socially liberal and fiscally conservative politics and the rule of law, where I could enjoy a more secure life and higher standard of living than the US (that is, after our looming fiscal problems hit), and which would allow me to immigrate and become a legal citizen?

[ASH]

Re: california pension troubles

too cold (Canada)

When I heard from a headhunter that PerkinElmer was looking for someone to lead silicon avalanche photodiode development at the old EG&G facility in Canada, I was sorely tempted. On the face of things, Canada appeals. Plus there are lots of awesome iTulipers from Canada.

Unfortunately, I lack experience with silicon... and I'm still waiting to see if my job at a small American company turns out to be a golden ticket or a dead end. Being unqualified (well, semi-qualified) is a problem. Also, if my current job is a golden ticket, then it should be possible to weather things here in the States... and also easier to abscond if necessary. On the other hand, if it's a dead end, well... it's better than being jobless.