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[quote=SK in CV]…returned to taxpayers in the form of lower tax rates.[/quote]

HAHAHAHA. That’s a funny one.

[quote=SK in CV]We had a once in 3 generations crash that the economy still hasn’t recovered from. Predictable? Maybe. But that was the cause of the problems with the public sector retirement pension shortfall. Not the overly generous pensions.[/quote]

Well, there are two points of discussion:
1) Choosing to offer a defined pension at all
2) The amount of that pension.

So, you are right, it wasn’t the overly generous pension. It was the fact that a pension was offered at all instead of a simple 401K-type plan.

For the state to choose to put taxpayer money at risk and imagine themselves to be capable of investing the money properly is a plan that will work perfectly up until the day when it doesn’t. Plus, they have to turn to a private investment contractor and have them do the investing for them – a cost that I’m sure CA Renter would like to avoid.

It isn’t the government’s place to take care of their employees for life or put our money at risk. The definition of “risk” is that there is both an upside and a downside, by the way.

Pay the employees now, let them manage their own retirement, avoid the risk, and avoid putting taxpayer money on the shoulders of the evil wall street people. I don’t see how that is a bad idea.

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[quote=CA renter]From everything I’ve seen, privatization does NOT result in savings for taxpayers.[/quote]

Well, I actually agree with you a bit here. Just because a private organization is doing the work, it is still funded by the government. That really isn’t “privitization” to me. Privatization would be eliminating garbage service and making people buy their own from a private service.

I’m not a corporation and I’m dead against public unions. Has nothing to do with propaganda. Public unions are truly horrible. That isn’t to say private contractors are not.

To me, the unions look exactly like a private corporation – both act in their own best interest and not in the interest of the taxpayers. The only difference is corporations admit they are in it for profit while unions try to pretend to have some noble purpose.

The crux of both problems is the fact that decisin-makers in the government have power over too much money and they are going to give it to their friends – be they union or corp. Beaurocrats have control of massive amounts of funding but each individual beurocrat only needs a little for themselves to be bought. So, with a small investment a private organization (union or corp) can spend a few hundred thousand buying the right politician to get millions in return.

The answer is to run less money through the government so neither the unions nor the contrators can buy their own politicians.

I would just like to see you admit that a public employee union is really no different from a corporate contractor. They just use different agruments to justify why the government should send the money their way.

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[quote=CA renter]The contribution rates DO change, and THAT is what people are discussing during contract negotiations. The ***employees*** are being forced to increase their contribution rates. Those are public union ***employees*** who are often taking the hit for those increases, not just the employers. No, they are not token hits; and no, they do not just apply to younger employees.[/quote]

I think the concern is not what has happened already, but what has to happen to cover the shortfall.

Also, we are suggesting that putting new employees on a defined benefit plan only poses a risk for the future, give that we have seen this epic failure of the investments. Just put them on a 401K, negotiate a salary + employer 401K contribution, get out of the investment business and move on.

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[quote=CA renter]No offense, but why do so many people continue with the lies about public sector workers not taking a hit? IMHO, many of them are going to see 10-35% pay cuts going forward. Some have already seen rather significant cuts already.[/quote]

Well, back to the original point someone made about defined contrib. vs. defined benefit.

If the public employees are taking a hit to boost their pension, then that is more like a defined contribution plan, which is a good thing. In a defined benefit plan, they wouldn’t take that hit – the state would have to.

So yes – some public employees may not be on a defined benefit plan.

This doesn’t mean I’m happy about the ones that are.

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[quote=SK in CV][quote=sdduuuude]

Was just using a number. 15%, 2%, 20 %. Doesn’t matter. Effectively, the state is promising a certain return to its employees based on how much the employees pay to fund it and the amount they are promised. And, if that return isn’t met by the investors (which it wasn’t), it has to be made up by taxpayers. It’s a foolish thing to promise.[/quote]

Not exactly. The state doesn’t promise any return to it’s employees. It promises a certain series of payments to it’s retirees. It pre-funds these payments through a trust, and funding of the trust is based on certain actuarial assumptions. Funding is provided by a combination of payments from the state, payments from employees, and investment return. It is a sound model, one that has generally worked quite well for the last 70 years. But not one without risks. Current funding requires most current employees to cover about 55% of normal costs, while the state kicks in about 45% of normal costs. Unfunded liabilities are paid in by the state. So if the funds perform well, the state benefits.[/quote]

Not exactly, but close enough. The taxypayers incur the risk.

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[quote=CA renter]If we had focused on the problems with the Fed and the Wall Street casino, we wouldn’t be having this discussion about the “financial crisis” or the “pension crisis.” Our problems are 100% related to Wall Street and our financial system, in general.[/quote]

Bubbles will happen in regulated markets, free markets, any markets, really. Its stupid and arrogant to think anyone can regulate the world to have no bubbles. Just as stupid to think you can de-regulate and have no bubbles.

What you can do is not bailout those who get burned by bursting bubbles.

Individuals can take matters into their own hands by not getting involved so it is sad that those taxpayers who had the wherewithal to not get burned are bailing out those who got burned.

Agree w/ your comment on the Fed, though.

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[quote=SK in CV][quote=sdduuuude]Nobody is entitled to a 15% return and certainly the taxpayers shouldn’t be making up for the shortfall.[/quote]

Just to add fuel, no 15% return assumptions were ever made. (As an aside, I don’t think
“entitled” belongs in that sentence anywhere, it doesn’t really fit.) I believe over most of the few years preceding the crash it was like 8%. And returns met or exceeded those assumptions. Except that one time when they didn’t. Before the crash, most public pensions were very close to fully funded (albeit with what in hindsight were faulty return assumptions). My recollection is that in 2007, CalPers was like 96% funded. I believe both CalPERS and CalSTRS, the two largest CA public retirement plans, are both now using 7.5% return assumptions.[/quote]

Was just using a number. 15%, 2%, 20 %. Doesn’t matter. Effectively, the state is promising a certain return to its employees based on how much the employees pay to fund it and the amount they are promised. And, if that return isn’t met by the investors (which it wasn’t), it has to be made up by taxpayers. It’s a foolish thing to promise.

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[quote=gandalf][quote=sdduuuude]
Why force administrators to meet a certain level of growth ?
…
Nobody is entitled to a 15% return and certainly the taxpayers shouldn’t be making up for the shortfall.[/quote]

Yeah, I actually agree. These are good points, sdude.

The taxpayer is footing the bill, both directly and through stealth inflation.

Compensation / pensions need to be reformed. I just don’t think it’s the root of the problem.

The root of the problem is THE REASON this board exists — bullshit asset bubbles and the aftermath we’re all living through.[/quote]

Not so sure the bubble is even the problem. I mean – it is a problem, but the reason it hurts is because taxpayers are bailing out those who were stung by the bursting bubble, which is kind of the same problem as the pensions.

So, the taxpayers are burdened with bailing out the stupid banks, the stupid homeowners and the entitled public employees.

So, I see the real problem is that the gubmint feels the need to save everyone’s ass using taxpayers money. I would rather divorce the taxpayers from all these bailout efforts so that the decisions made by stupid people affect those stupid people in particular and not taxpayers in general.

Do this and we don’t need to regulate wall street as much because they can suffer from their own mistakes.

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[quote=CBad][quote=sdduuuude][quote=CBad]Last date night with another couple we went shooting.[/quote]

Ah, the romace !

What’s next – mailbox baseball ?[/quote]

And petty crime is like an indoor shooting range in what way exactly?

I wouldn’t say watching my husband shoot is romantic but it’s definitely hot. So was the yoga (seriously, it’s 105 degrees in there).[/quote]

HA. I was thinking more along the lines of “You know you’re a redneck if … ”

Even shooting involves eating: “Eat lead, sucker!”

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[quote=gandalf]People who are outraged about public pensions should FIRST direct their outrage at the financial industry. FOLLOW THE MONEY.[/quote]

But those in charge of the public employee pension system made the decision to rely on wall street by promising a certain output rather than forcing a certain level of input.

Focusing on contributions takes wall street out of the picture.

Why force administrators to meet a certain level of growth ? It is just stupid because you can’t count on the world to provide you a certain level of growth, and we clearly can’t (and shouldn’t) rely on wall street to provide it.

Just make the benefit contribution-based and whoever is manging the fund will do their best with the money.

Nobody is entitled to a 15% return and certainly the taxpayers shouldn’t be making up for the shortfall.

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[quote=CBad]Last date night with another couple we went shooting.[/quote]

Ah, the romace !

What’s next – mailbox baseball ?

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[quote=svelte]We’ve borrowed an idea that many couples use now: splitting a meal when we go out to eat. It is very common, watch the tables around you.
[/quote]

Svelte – great suggestion. We started doing something like this last year. We basically stick to the appetizers anywhere we go – we each get a drink and an appetizer and occasionally split an appetizer if we are still hungry. Sometimes we’ll split a main course but it seems restaurants put more creativity into their appetizers and they are usually more interesting to us.

Not only do we feel better (not stuffed) after the meal, we can afford to eat out more often and try more new places.

I’m also a fan of game night – whether poker w/ the boys or board games w/ families.

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[quote=briansd1]Will they be able to engineer a cooling off that doesn’t endanger growth and that promotes a sustainable transition to a more consumer oriented economy?[/quote]

No.

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[quote=SK in CV][quote=sdduuuude]
Stop attacking me.[/quote]

I’m not attacking you. Just the 3rd u in your name. Don’t take everything so personal.[/quote]

I hope you know I was kidding.

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[quote=SD Realtor]Flu aka sherlock holmes![/quote]

More like the Peter Sellers character in “Murder by Death”

http://www.imdb.com/media/rm2488712704/ch0018393

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