How to cut pensions in half in a few years

[mooncliff]

Since no one would tolerate nominal cuts (as my cousin said three years ago: "They are required by LAW to pay my pension! They can't cut it in half!"), I have been saying "They will let inflation cut it in half."

Mish complains about why do state pensions have COLA when no one else does. As far as I know, he fails to note that the COLA may have a cap of 2 to 3%.
http://articles.sfgate.com/2010-10-1...ederal-workers
If, as is anticipated, we have 10 to 40% annual inflation for a couple of years, that would about cut the pension in half, not nominally of course, but in purchasing power.

I find many things that Mish says to be very useful, but what is missing in his arguments often undermines the conclusions. Moving the goal posts, omitting the consequences of actions, and jumping to conclusions, as if everything were simple, ultimately leads to odd conclusions, and worse, may lead to unwarranted feelings of certainty.

Social Security is frozen for 2 years on the assertion that there is no inflation... oops.. no increase in the cost of food, gasoline, medicines, and medical insurance that someone who is 80 years old has to pay. Mish wants to dilute this inflation by saying, hey, house prices are way down, so let's mix that in, and therefore there is no inflation.

Shadow Stats says inflation has been about 8 to 9% a year recently, health insurance providers are asking for 8 to 12% increases, everyone I ask in the US assures me that food prices are going up or amount is going down for the same price, so I would say Social Security has been cut by about 20% so far, shooting for "about half".

This is why I see no alternative to trying to get the expenses of one's entire family down, in big ways and small, because is unlikely they are going to get more money.
For example, I got one of these. It is great.
http://www.amazon.com/Black-Decker-T...8066879&sr=8-2
Am now going through houses of friends and family, showing them where unwanted heat is leaking in in the summer, and where heat is being lost in the winter. Once they can see the problem, they are very willing to mitigate.

And you can keep the stinkbugs out.
http://www.treehugger.com/files/2010...hinese_sti.php

We don't want expensive and perfect fixes; we want cheap reasonably effective fixes.

I think that applies to managing everything in this transition in the US.

Of course those living beyond their means have gotten into trouble.
The problem now will be people living at their means will also get into trouble.

[pescamaaan]

Re: How to cut pensions in half in a few years

so I would say Social Security has been cut by about 20%

cut 20% from when to when? the last 10 yrs to now, the last 5 yrs, 2 yrs?

in terms of your thermal detector, of all your expenses, what % goes to heating and cooling your house?i would say of all the things i spend money on, it's got to be less than 5% of my total expenses. so maybe i get 20% improvement with this thermal detector....that translates to a ~1% reduction in my total expenditures. is that really worth it? kinda like when companies cut out the free coffee during tough times yet continue to pay top management $$$

[Starving Steve]

Re: How to cut pensions in half in a few years

One point to argue in favour of keeping old-fashioned Edison incadecent lights: they produce waste heat which is quite useful in very cold climates, especially in Canada and Russia. With double building-code insolation in your house, waste heat from light bulbs can cut your heating bill, especially if you heat with baseboard electric heaters or a fuel-oil furnace.

But in most climates, especially hot climates, LED lighting would save money on electric bills.

[flintlock]

Re: How to cut pensions in half in a few years

cut 20% from when to when? the last 10 yrs to now, the last 5 yrs, 2 yrs?

in terms of your thermal detector, of all your expenses, what % goes to heating and cooling your house?i would say of all the things i spend money on, it's got to be less than 5% of my total expenses. so maybe i get 20% improvement with this thermal detector....that translates to a ~1% reduction in my total expenditures. is that really worth it? kinda like when companies cut out the free coffee during tough times yet continue to pay top management $$$

I can see your point but the real issue is "what is heating your home going to cost in 2020?". My guess is the utility bill will exceed many people's mortgage by then. Then people will take notice. But for now, no, it won't make that much of a dent in a relatively modern home.

[mooncliff]

Re: How to cut pensions in half in a few years

The thermal detector is a tool that is VERY useful in unexpected ways.
I sent one to my cousin because he was trying to stop heat inflow into his business in Hawaii.
He wound up mostly using it to detect air conditioner leaks and other problems in cars he is fixing. He said it was one of the most useful things he had ever seen.
He could stand in his warehouse and see the temperature high up on the walls, the parking lot, the ceiling, etc. He used it to see that huge amounts of heat were coming through a west wall in the summer, so he painted it with a titanium ceramic heat reflecting paint, and that solved that problem.
That is what I thought he would use it for... never imagined the car air conditioner use. It detects heat and cold.

The sensor displays the temperature of what you aim it at, which is really amazing.
(Of course the kids think it is really fun and spend a lot of time aiming it at body parts... and checking for who is a vampire...)

Heating my apartment costs about $150 a year (Dec to Feb), and cooling about $150 a year (July to Sept), in Tokyo, 600 square feet, at 30 cents a kwh, so pretty trivial. I have an extremely efficient air conditioner/heat pump (very few air conditioner only sold in Japan) that is 16 years old, split system, like this.
Similar to this.
http://www.sz-wholesale.com/uploadFi...R-70GW_454.jpg

It is just a tool, and a cheap one at that, so I dont worry about what it cost.
Besides, my cousin said his business electric bill dropped more than $12,000 PER YEAR, and the whole work area is much more comfortable, so I would say my $50 investment was better than buying lottery tickets... and now he is giving detectors to business people he knows, so I hope I got the ball rolling sooner than it would have otherwise.
It's like my elastomeric roof... when I did that in 2005, no one knew what it was an thought it was weird. Now, in some neighborhoods, more than half the houses have them, everyone says yeah yeah we know, the cost was 50 to 90% less than reroofing, and air conditioning bills dropped $2,000 per year.

What if you could use it to detect tiny cracks and leaks, and keep stink bugs and bedbugs from coming in from neighboring apartments? Usually, once there are bedbugs, they have to fumigate the entire building. Sounds like a business!
http://www.treehugger.com/files/2010...hinese_sti.php

[ThePythonicCow]

Re: How to cut pensions in half in a few years

The thermal detector is a tool that is VERY useful in unexpected ways.

Definitely. I use the Fluke 62:

I used it to guide a series of substantial improvements to the cooling of my Texas Trailer, such as major roof overhaul, window coverings and reworking the frame on one door.

Now my summer cooling bill is less than my winter heating bill, so next time it's cold enough outside that I need to run the heater, I should walk around and see where the heat is leaking. Keeping out the Texas summer sun is not the same as keeping warm air from leaking out.

For now my Fluke sits in the kitchen, where I find it useful to track the temperatures of what I'm heating, and to track the temperatures in the refrigerator.

I doubt however one could get very far keeping bugs out from a neighboring apartment. Little bugs can be quite inventive in finding serpentine paths through tiny cracks.

Fun toy.