sequester whining

[Anonymous]

I agree with SDR that this sequestration and fiscal cliff talk are overblown. Classic fear tactics by the propaganda machine. And as we’ve seen, most likely this won’t even happen as they’ve proven an unlimited ability to kick the can down the road. I agree, bring it on and we’ll see.

That said, if there actually were to be major defense cuts, those of you who belive it will have no affect on local real estate are incredibly naive. You clearly don’t realize how many local jobs are reliant directly or indirectly on defense spending. It’s not just active duty troops or Spawar or viasat employees. for every lost job, there is a multiplier affect when that person moves out of the area or spends less due to loss of income.

I agree with one of the other posts, major defense cuts could lead to a national recession which would eventually hurt local real estate but probably not initially.

TO suggest defense cuts won’t affect real estate because “most defense workers own their home outright” is non-sense. YOu have no evidence to prove that most defense workers own their homes outright, you pulled that out of your ass. Even if 100% of defense workers who lost their jobs did own their home outright, the fact is that their income stream would go down considerably. That will affect how much they spend in the local economy, affecting local business.

[bearishgurl]

[quote=deadzone]…That said, if there actually were to be major defense cuts, those of you who belive it will have no affect on local real estate are incredibly naive. You clearly don’t realize how many local jobs are reliant directly or indirectly on defense spending. It’s not just active duty troops or Spawar or viasat employees. for every lost job, there is a multiplier affect when that person moves out of the area or spends less due to loss of income.

…TO suggest defense cuts won’t affect real estate because “most defense workers own their home outright” is non-sense. YOu have no evidence to prove that most defense workers own their homes outright, you pulled that out of your ass. Even if 100% of defense workers who lost their jobs did own their home outright, the fact is that their income stream would go down considerably. That will affect how much they spend in the local economy, affecting local business.[/quote]

deadzone, as usual, you skimmed over my post and didn’t read it correctly. I never said any of those things. I stated that those able to “retire” would do so and go home to their homes in SD that they’ve owned for many years.

Whether or not they still have a mortgage is immaterial.

I don’t know about the Port District pension plans, but after 30 years on the job as a Federal worker, their monthly pensions will equal or nearly equal the DOD paychecks they will be leaving behind. And even the 20 to 30-year Federal employee who is at least 59.5 years old can withdraw from their Thrift Savings Plan to supplement their Federal pensions.

I’ve known LOTS of these workers in my lifetime and am currently living around a few and can safely say that they’re ALL doing fine and are still SD consumers and are not going anywhere.

[bearishgurl]

And for every “transferred-out” military family (due to lack of funding for their particular mission), the Navy’s property mgrs will fill their vacated housing unit with another family … in very short order.

[Anonymous]

The days of cush pension plans for federal workers are in the past. Plus, if said workers were eligible to retire with these great plans, then why are they still working? Obviously they need the money! Your examples don’t make sense. The assumption that someone’s income (and thus spending power) will not go down dramatically if they lose their job is idiotic.

[Anonymous]

Who are they going to fill it with? And what does that have to do with anything? THe point is the aggregate number of people employed directly or incireclty by the military industrial complex will go down. That is a net drain on spending and the local economy.

[bearishgurl]

[quote=deadzone]The days of cush pension plans for federal workers are in the past. Plus, if said workers were eligible to retire with these great plans, then why are they still working? Obviously they need the money! Your examples don’t make sense. The assumption that someone’s income (and thus spending power) will not go down dramatically if they lose their job is idiotic.[/quote]

They still work for a number of reasons:

-Their bosses have begged them to hold out for a few years because their intellectual property is still needed by the organization (this is common);

-their employer pays most or all of their spouse’s healthcare premium and they would have to pay most or all their spouse’s premium out of their pension or seek an individual policy for a spouse who has a “preexisting condition”;

-They still owe a small amount of mortgage or auto loan and are endeavoring to pay it off before retirement; and

-they don’t know what they would do with themselves if they didn’t have a place to go to at 7:00 a.m. five days a week 🙂

Actually deadzone, when you take out the gas, lunch and other expenses of going to work every day, many “retirees” with pensions are actually money ahead AFTER retirement!

[bearishgurl]

[quote=deadzone]Who are they going to fill it with? And what does that have to do with anything? THe point is the aggregate number of people employed directly or incireclty by the military industrial complex will go down. That is a net drain on spending and the local economy.[/quote]

It’s only a “net drain on the economy” if those employees who are no longer working do not have a sufficient income to be the “SD consumer” they once were or if these displaced workers leave the county in droves with their families in tow.

I don’t see the latter happening because the employees who will be “let go” will be the voluntary (and possibly incentivized) “retirees.”

It’s not going to be the younger, cheaper employee who may be raising a family.

The new Federal “retirees” won’t be going anywhere, IMHO (except to their homes to fill out their direct-deposit form for FERS).

[Anonymous]

BG, may I ask how old you are? It seems you are still living in a bygone era. Professional workers of today, defense or private industry, do not have pensions.

The days of people making as much or more money in retirment than working (e.g. San Diego firefighters) are over.

And anyway, you have a narrow and incorrect perspective of the defense industry. To you it is all federal workers (GS types). The majority of defense spending goes to defense contractors. When those companies lose contracts, thousands of people will be laid off. The income of those folks will therfore be decimated.

[bearishgurl]

[quote=deadzone]BG, may I ask how old you are? It seems you are still living in a bygone era. Professional workers of today, defense or private industry, do not have pensions.

The days of people making as much or more money in retirment than working (e.g. San Diego firefighters) are over.

And anyway, you have a narrow and incorrect perspective of the defense industry. To you it is all federal workers (GS types). The majority of defense spending goes to defense contractors. When those companies lose contracts, thousands of people will be laid off. The income of those folks will therfore be decimated.[/quote]

I just looked at the article and watched the newsclip again. It only talks about possibly losing “Civilian DOD positions” in SD as well as Port District jobs (which are also Civil Service with some departments funded with Federal monies). The DOD positions are comprised of General Schedule (GS), General Management (GM) and Wage Grade (WG) positions. In SD, these positions work directly for the Navy and Marine Corps. The SD Port District is its own public entity and manages the port operations of SD Bay and Lindbergh Field.

The only jobs discussed in the newsclip were civil-service positions.

I haven’t seen the listing of the mandatory cuts for each region so don’t know anything about proposed defense contractor cuts for SD County.

It is typical for Federal workers and CA State and local government workers to receive a 100% pension (or very close to it in some local govm’ts) of their highest year’s pay (or avg of highest three years pay) as a monthly pension after 30 years of creditable service.

Any recent changes to those pension calculations were made for new hires in the last few years, NOT to active employees nearing retirement.

[Anonymous]

Again, I think you are living in a time warp. The vast majority of federal workers do not have guaranteed pension. This is not a change that happened recently.

But again, you miss the whole point. Sequestration is not isolated to federal workers. In fact the civil service workers, other than being furloughed for a few days, are the least likely to be laid off in the long run. The hundreds of thousands of defense contractors are the ones who will be more likely to lose their jobs depending on how big the defense cuts are.

Let’s go over this again class. If government cuts spending, a lot of people will lose their jobs and these jobs are not just isolated to defense workers. If people lose jobs, they have less income. If people have less income, they spend less. If they spend less, businesses that rely on spending will suffer. Eventually this is not good for real estate. Simple logic here.

Again, very few workers nowadays have guaranteed pensions so don’t count on that to sustain the economy.

[Anonymous]

By the way, for federal workers, the annuity plan you are referring to (CSRS) was discontinued in 1987, so t only applies to workers who began federal service prior to 87. In this system, a retiree with 30 years service would get 60% of their salary. Also, these folks do not get social security. If you can do simple math, that is a 40% loss of income when they retire.

Now, back to sequestration, you are making a ridiculous assumption that the only workers who will be “let go” are federal workers that coincidently are also eligible to retire under CSRS. Of course that is complete non-sense. But even in this best case fantasy scenario, we are talking about a 40% loss of income.

[bearishgurl]

[quote=deadzone]By the way, for federal workers, the annuity plan you are referring to (CSRS) was discontinued in 1987, so t only applies to workers who began federal service prior to 87. In this system, a retiree with 30 years service would get 60% of their salary. Also, these folks do not get social security. If you can do simple math, that is a 40% loss of income when they retire.

Now, back to sequestration, you are making a ridiculous assumption that the only workers who will be “let go” are federal workers that coincidently are also eligible to retire under CSRS. Of course that is complete non-sense. But even in this best case fantasy scenario, we are talking about a 40% loss of income.[/quote]

deadzone, YOU’RE living in a time warp. The Federal workers that will be let go will retire under FERS.

http://www.opm.gov/retirement-services/fers-information/

In addition, the vast majority of them also contributed to TSP.

https://www.tsp.gov/planparticipation/about/purposeAndHistory.shtml

With both of these plans combined, there should be NO loss of income for today’s Federal retirees.

[CA renter]

[quote=deadzone]Again, I think you are living in a time warp. The vast majority of federal workers do not have guaranteed pension. This is not a change that happened recently.

But again, you miss the whole point. Sequestration is not isolated to federal workers. In fact the civil service workers, other than being furloughed for a few days, are the least likely to be laid off in the long run. The hundreds of thousands of defense contractors are the ones who will be more likely to lose their jobs depending on how big the defense cuts are.

Let’s go over this again class. If government cuts spending, a lot of people will lose their jobs and these jobs are not just isolated to defense workers. If people lose jobs, they have less income. If people have less income, they spend less. If they spend less, businesses that rely on spending will suffer. Eventually this is not good for real estate. Simple logic here.

Again, very few workers nowadays have guaranteed pensions so don’t count on that to sustain the economy.[/quote]

Have to agree with deadzone here. We know a number of people who are civilian contractors for the DOD and they are sitting on pins and needles in anticipation of this sequestration. Many contractors have already been reducing their numbers, and they’re prepared to let go of many more employees. These are people *without* govt pensions. Even the federal employees we know don’t have pensions that pay anywhere near 100% of their regular pay, and these are not new employees, either.

If you look at the computation for retirement benefits in BG’s link, you’ll see this:

Your benefit was computed differently, if you retired under one of the provisions below
Special Provision for Air Traffic Controllers, Firefighters, Law Enforcement Officers, Capitol Police, Supreme Court Police, or Nuclear Materials Couriers

1.7% of your high-3 average salary multiplied by your years of service which do not exceed 20, PLUS
1% of your high-3 average salary multiplied by your service exceeding 20 years

Member of Congress or Congressional Employee (or any combination of the two) must have at least 5 years of service as a Member of Congress and/or Congressional Employee

1.7% of your high-3 average salary multiplied by your years of service as a Member of Congress or Congressional Employee which do not exceed 20, PLUS
1% of your high-3 average salary multiplied by your years of other service

That’s nowhere near 100% of base pay, even at the very highest rates. Even if you add in the TSP and SS, I highly doubt they’ll come anywhere near 100% of pay.

[sdduuuude]

[quote=SK in CV]The US has never avoided a recession in the past when total government spending (fed and states) has been cut as it has been the last 3 years. Somehow we’re managing now, but further cuts won’t increase the likelihood of further recovery, and the cuts required by the sequester is likely to push the economy into another recession. There’s a time and place for everything.[/quote]

Can you please provide a chart of total government spending showing that it has been coming down for the last 3 years from an objective, reliable source ?

My understanding of the sequester is that it is a reduction in the increase in spending, not a cut in spending.

[sdduuuude]

[quote=SK in CV] … our federal spending really hasn’t exploded the last four years. It exploded in fiscal year ending 9/30/09. Since then, it has been relatively flat, and current projections are for it to remain relatively flat though 2014 with about a 5% increase in 2015.[/quote]

So, has it been flat for 3 years or decreasing ?

[Author]

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