NPR: “Offshore Tax Havens”

[SK in CV]

We’re going all different directions here, but I think I can address them each one at a time.

[quote=briansd1]Ok, SK, if we assume that Wall Street caused our problems, let’s find a way to tax them and make them pay.
[/quote]

I’m not sure who the “we” is that should find a way to tax them and make them pay. The government doesn’t usually reimburse people for bad investment decisions. There probably are viable tort claims that should be pursued, some already have been.

[quote=briansd1]So in that case, we all are “owed” something. So whatever amount is “recovered” through taxation should go to the general fund, not the public pensions. [/quote]

I’m not sure that we’re all owed anything, other than criminal prosecutions. Given the influence of the financial sector on both parties in Washington, that seems unlikely. Some might be. See tort claim issue above. Additionally, the losses didn’t occur within state or municipality accounts, they occurred within pension trusts. “Recovery through taxation” (whatever that means) would go to the states or municipalities, not pension trusts, except to the extent those additional taxes are used to fund those pensions.

[quote=briansd1]I don’t see why the public pension funds should be made whole to their peak values when everybody else suffers. [/quote]

The public pensions should be made whole the same reason a private company has a legal responsibilty to fully fund its contractual pension obligations. It has nothing to do with restoring them to their peak. Just to restoring them to actuarialy fully funded. The alternative to fully fund those obligations is bankruptcy. You can argue that the contracts should never have been agreed to. But they were. And where the pension obligations are in the list of creditor priority both at the state and municipal level, they will be funded. There is no choice.

[quote=briansd1]Now if the public pensions funds can successfully sue Wall Street to recover money, then all the better for them.[/quote]

They may be able to. It has already started.

[quote=briansd1]If you look at the Maddoff lawsuits, the investors who “lost money”, are only entitled to the capital they contributed, not the value of their portfolios. If they withdrew any of their gains, they are having to pay them back.[/quote]

Maddoff is not currently relevant because that’s a federal bankruptcy issue. There are no state or municipal pension funds in bankruptcy.

[briansd1]

Yes, I was going in all directions. I was conflating your points and and CA renter’s.

I agree with all the latest points you made.

Perhaps we should force pensions funds and local governments into bankruptcy.

As far at contractual agreements are concerned, Wall Street made the same arguments that they were contractually required to pay salaries and bonuses.

Of course, contracts come before discretionary spending. But I don’t think that it’s fair to cut services to cover the pension shortfalls.

[briansd1]

Yes, I was going in all directions. I was conflating your points and and CA renter’s.

I agree with all the latest points you made.

Perhaps we should force pensions funds and local governments into bankruptcy.

As far at contractual agreements are concerned, Wall Street made the same arguments that they were contractually required to pay salaries and bonuses.

Of course, contracts come before discretionary spending. But I don’t think that it’s fair to cut services to cover the pension shortfalls.

[briansd1]

Yes, I was going in all directions. I was conflating your points and and CA renter’s.

I agree with all the latest points you made.

Perhaps we should force pensions funds and local governments into bankruptcy.

As far at contractual agreements are concerned, Wall Street made the same arguments that they were contractually required to pay salaries and bonuses.

Of course, contracts come before discretionary spending. But I don’t think that it’s fair to cut services to cover the pension shortfalls.

[briansd1]

Yes, I was going in all directions. I was conflating your points and and CA renter’s.

I agree with all the latest points you made.

Perhaps we should force pensions funds and local governments into bankruptcy.

As far at contractual agreements are concerned, Wall Street made the same arguments that they were contractually required to pay salaries and bonuses.

Of course, contracts come before discretionary spending. But I don’t think that it’s fair to cut services to cover the pension shortfalls.

[briansd1]

Yes, I was going in all directions. I was conflating your points and and CA renter’s.

I agree with all the latest points you made.

Perhaps we should force pensions funds and local governments into bankruptcy.

As far at contractual agreements are concerned, Wall Street made the same arguments that they were contractually required to pay salaries and bonuses.

Of course, contracts come before discretionary spending. But I don’t think that it’s fair to cut services to cover the pension shortfalls.

[SK in CV]

[quote=briansd1]Of course, contracts come before discretionary spending. But I don’t think that it’s fair to cut services to cover the pension shortfalls.[/quote]

You can’t have it both ways without raising revenues.

[SK in CV]

[quote=briansd1]Of course, contracts come before discretionary spending. But I don’t think that it’s fair to cut services to cover the pension shortfalls.[/quote]

You can’t have it both ways without raising revenues.

[SK in CV]

[quote=briansd1]Of course, contracts come before discretionary spending. But I don’t think that it’s fair to cut services to cover the pension shortfalls.[/quote]

You can’t have it both ways without raising revenues.

[SK in CV]

[quote=briansd1]Of course, contracts come before discretionary spending. But I don’t think that it’s fair to cut services to cover the pension shortfalls.[/quote]

You can’t have it both ways without raising revenues.

[SK in CV]

[quote=briansd1]Of course, contracts come before discretionary spending. But I don’t think that it’s fair to cut services to cover the pension shortfalls.[/quote]

You can’t have it both ways without raising revenues.

[DWCAP]

(Brian, you’re arguing a claim that was never made. The claim was that the financial crash is the primary cause of the pension crisis. This is fact. It is inarguable. If not but for the financial crash, there would be no pension crisis. The end.)

I disagree. The pension crisis was the result of piss poor decision making on the part of city hall and the people elected to run the pensions.
Investments go up and down, this is investing. Risk is what gives return, and risk involves the possiblity of loss.

When times were up, benifits got raised without raising contributions, something that was very popular. Problem was, then times came down, and $$ was needed to make up for the increases. Rather than paying the $$, which would be unpopular because taxes would go up or services down, city hall severly underfunded the pension, and since they needed the union blessing to do so, bought off the unions with even more increases (future increases also not paid for), which the unions happly went along with. Well the bill came due when overly optimistic return assumptions didnt pan out. But rather than admit the fact, and make hard decisions, the penisons went swimming in subprime and CDO crap (adding risk) to goose returns. The bet failed in 2008 and now the question is “who pays?”

Both of the above quotes seem to completly miss the role of the public employees in this process. As if Wall Street has been the one and only bad guy in the whole thing. The unions sit on the pension boards, they spend alot of money and work very hard to get politicans elected. THey pay lots of money to consultants and managers, they are not ignorant investors. The unions went along and agreed with everything. They are the only ones who voted directly (tax payers only vote for their represinives, not on the increases itself)on the increases that took the system down. Their culpability in every step is in no way less than anyone on Wall Street.

As for public fervor, part of it is the percived “unfairness” of the situtation. The “if I cant have it you cant either”. But part of it is the real unfairness. I have family that spend their careers setting up private pensions, and what public employees have would be flat out ILLEGAL in the private sector. Private pensions generally count 3-5 years of last salary, not the 1 last year public servents get. Plus they dont get to “goose” their pensions with sick time accrued, or taking overtime, or that last second promotion they stay in for just long enough to qualify for higher payments (the whole point of 3-5 years). And if they ruin the system or the company goes under (which has happened to alot of companies like autos, airlines, etc etc) private workers get a penalty in greatly reduced benifits paid for by other pensioners, not tax payers. Public worker dont loose a dime.
Sure, part of the anger is misplaced from politicans to union workers, but part of the anger is rooted in the truth that public pensions ARE better (for the worker) than private retirment plans, and private workers have to pay for it.

[DWCAP]

(Brian, you’re arguing a claim that was never made. The claim was that the financial crash is the primary cause of the pension crisis. This is fact. It is inarguable. If not but for the financial crash, there would be no pension crisis. The end.)

I disagree. The pension crisis was the result of piss poor decision making on the part of city hall and the people elected to run the pensions.
Investments go up and down, this is investing. Risk is what gives return, and risk involves the possiblity of loss.

When times were up, benifits got raised without raising contributions, something that was very popular. Problem was, then times came down, and $$ was needed to make up for the increases. Rather than paying the $$, which would be unpopular because taxes would go up or services down, city hall severly underfunded the pension, and since they needed the union blessing to do so, bought off the unions with even more increases (future increases also not paid for), which the unions happly went along with. Well the bill came due when overly optimistic return assumptions didnt pan out. But rather than admit the fact, and make hard decisions, the penisons went swimming in subprime and CDO crap (adding risk) to goose returns. The bet failed in 2008 and now the question is “who pays?”

Both of the above quotes seem to completly miss the role of the public employees in this process. As if Wall Street has been the one and only bad guy in the whole thing. The unions sit on the pension boards, they spend alot of money and work very hard to get politicans elected. THey pay lots of money to consultants and managers, they are not ignorant investors. The unions went along and agreed with everything. They are the only ones who voted directly (tax payers only vote for their represinives, not on the increases itself)on the increases that took the system down. Their culpability in every step is in no way less than anyone on Wall Street.

As for public fervor, part of it is the percived “unfairness” of the situtation. The “if I cant have it you cant either”. But part of it is the real unfairness. I have family that spend their careers setting up private pensions, and what public employees have would be flat out ILLEGAL in the private sector. Private pensions generally count 3-5 years of last salary, not the 1 last year public servents get. Plus they dont get to “goose” their pensions with sick time accrued, or taking overtime, or that last second promotion they stay in for just long enough to qualify for higher payments (the whole point of 3-5 years). And if they ruin the system or the company goes under (which has happened to alot of companies like autos, airlines, etc etc) private workers get a penalty in greatly reduced benifits paid for by other pensioners, not tax payers. Public worker dont loose a dime.
Sure, part of the anger is misplaced from politicans to union workers, but part of the anger is rooted in the truth that public pensions ARE better (for the worker) than private retirment plans, and private workers have to pay for it.

[DWCAP]

(Brian, you’re arguing a claim that was never made. The claim was that the financial crash is the primary cause of the pension crisis. This is fact. It is inarguable. If not but for the financial crash, there would be no pension crisis. The end.)

I disagree. The pension crisis was the result of piss poor decision making on the part of city hall and the people elected to run the pensions.
Investments go up and down, this is investing. Risk is what gives return, and risk involves the possiblity of loss.

When times were up, benifits got raised without raising contributions, something that was very popular. Problem was, then times came down, and $$ was needed to make up for the increases. Rather than paying the $$, which would be unpopular because taxes would go up or services down, city hall severly underfunded the pension, and since they needed the union blessing to do so, bought off the unions with even more increases (future increases also not paid for), which the unions happly went along with. Well the bill came due when overly optimistic return assumptions didnt pan out. But rather than admit the fact, and make hard decisions, the penisons went swimming in subprime and CDO crap (adding risk) to goose returns. The bet failed in 2008 and now the question is “who pays?”

Both of the above quotes seem to completly miss the role of the public employees in this process. As if Wall Street has been the one and only bad guy in the whole thing. The unions sit on the pension boards, they spend alot of money and work very hard to get politicans elected. THey pay lots of money to consultants and managers, they are not ignorant investors. The unions went along and agreed with everything. They are the only ones who voted directly (tax payers only vote for their represinives, not on the increases itself)on the increases that took the system down. Their culpability in every step is in no way less than anyone on Wall Street.

As for public fervor, part of it is the percived “unfairness” of the situtation. The “if I cant have it you cant either”. But part of it is the real unfairness. I have family that spend their careers setting up private pensions, and what public employees have would be flat out ILLEGAL in the private sector. Private pensions generally count 3-5 years of last salary, not the 1 last year public servents get. Plus they dont get to “goose” their pensions with sick time accrued, or taking overtime, or that last second promotion they stay in for just long enough to qualify for higher payments (the whole point of 3-5 years). And if they ruin the system or the company goes under (which has happened to alot of companies like autos, airlines, etc etc) private workers get a penalty in greatly reduced benifits paid for by other pensioners, not tax payers. Public worker dont loose a dime.
Sure, part of the anger is misplaced from politicans to union workers, but part of the anger is rooted in the truth that public pensions ARE better (for the worker) than private retirment plans, and private workers have to pay for it.

[DWCAP]

(Brian, you’re arguing a claim that was never made. The claim was that the financial crash is the primary cause of the pension crisis. This is fact. It is inarguable. If not but for the financial crash, there would be no pension crisis. The end.)

I disagree. The pension crisis was the result of piss poor decision making on the part of city hall and the people elected to run the pensions.
Investments go up and down, this is investing. Risk is what gives return, and risk involves the possiblity of loss.

When times were up, benifits got raised without raising contributions, something that was very popular. Problem was, then times came down, and $$ was needed to make up for the increases. Rather than paying the $$, which would be unpopular because taxes would go up or services down, city hall severly underfunded the pension, and since they needed the union blessing to do so, bought off the unions with even more increases (future increases also not paid for), which the unions happly went along with. Well the bill came due when overly optimistic return assumptions didnt pan out. But rather than admit the fact, and make hard decisions, the penisons went swimming in subprime and CDO crap (adding risk) to goose returns. The bet failed in 2008 and now the question is “who pays?”

Both of the above quotes seem to completly miss the role of the public employees in this process. As if Wall Street has been the one and only bad guy in the whole thing. The unions sit on the pension boards, they spend alot of money and work very hard to get politicans elected. THey pay lots of money to consultants and managers, they are not ignorant investors. The unions went along and agreed with everything. They are the only ones who voted directly (tax payers only vote for their represinives, not on the increases itself)on the increases that took the system down. Their culpability in every step is in no way less than anyone on Wall Street.

As for public fervor, part of it is the percived “unfairness” of the situtation. The “if I cant have it you cant either”. But part of it is the real unfairness. I have family that spend their careers setting up private pensions, and what public employees have would be flat out ILLEGAL in the private sector. Private pensions generally count 3-5 years of last salary, not the 1 last year public servents get. Plus they dont get to “goose” their pensions with sick time accrued, or taking overtime, or that last second promotion they stay in for just long enough to qualify for higher payments (the whole point of 3-5 years). And if they ruin the system or the company goes under (which has happened to alot of companies like autos, airlines, etc etc) private workers get a penalty in greatly reduced benifits paid for by other pensioners, not tax payers. Public worker dont loose a dime.
Sure, part of the anger is misplaced from politicans to union workers, but part of the anger is rooted in the truth that public pensions ARE better (for the worker) than private retirment plans, and private workers have to pay for it.

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