Politicians bribed unions with promises of payments which could not actually be sustained. That sucks, there need to be checks against that happening, but that doesn't need to be held sacrosanct at the cost of actual services.
There's a reason that the US has a robust bankrupcy court for individuals -- it doesn't matter if you signed a contract for 15% credit card debt; at the point you are out of money and can't pay the bills, there's nothing ethical about keeping someone enslaved to uphold it.
This is the exact same thing, except mostly it's their parents who elected corrupt politicians, so there's even less reason to hold people accountable for the decisions of irresponsible politicians two decades ago.
The fact that their obligations are unfunded is a major problem and borderline accounting fraud - they should start treating it as actual debt, even if suddenly noticing the elephant in the room would actually invoke talks of bankruptcy. Coincidentally, this would also mean that the voters can implement the required changes for future, no matter how scary the wording on the bill sounds.
You want to fund things? Get Trump to send a bill to Gates, Buffet, Koch's, etc.
Why blame the public system for the mess private capitalism is truly responsible for creating?
These funds stuck trillions of dollars in the stock market, which is exactly how Gates, Buffet, and Koch made their money. The pension funds are still getting massive returns. But that does not stop politicians from promising _even more_ than was possible.
Capitalists want their investments to grow. Largely at the expense of others.
We'll put the pedal to the metal so the richest can earn more than is necessary. And poo-poo the notion that public workers should get even a smidgen of the same consideration.
Because it won't drive unreasonable growth if we're padding out health plans for the people that do the work.
One reasonable objection is that public pensions are never fully funded at the time they were negotiated with the public sector unions. This is done on purpose to make the cost look lower to get a better total compensation package. They know they will almost certainly be bailed out later. This is fraud.
Public workers should be forced into defined contributions plans like 401-Ks.
Because the people of California can no longer afford it. It's unfortunate that baby boomers allowed politicians to kick the can down the road by negotiating pensions rather than salaries, but now fiscal reality is settling in. And you want to talk about unconscionable, what they have in effect done is a money transfer from their children to them, since now younger generations have to pay the pensions, while receiving none of the benefits. That's why you're seeing movements like Generation Screwed here in Canada (http://www.generationscrewed.ca/).
The baby boom generation makes me think of the "Half a Life" Star Trek episode.
We wouldn't be in the issue if Calpers wasn't terrible at investing. They did really stupid things like invest in the most risky tranche of CDOs during the subprime crisis. Thats not the fault of tax payers.
I understand your argument, and the real problem is that state never should have made those promises.
This is much more acceptable, IMO. It's the difference between "we're paying you less than you thought we would for work you did" and "we're going to pay you less for work you'll do in the future". There's an unethical opening for convincing people to take a lower compensation now in exchange for the right to earn a higher compensation later and then reneging on it (see also: firing people immediately before a vesting cliff).
https://en.wikipedia.org/wiki/Odious_debt
Private sector unions are essential and should get more protection from the government, but public sector unions don't make any sense to me.
To me, the current status isn't as simple as that. The current status that I see is that public pensions have outsized control over government spending, which means you can't just think of these unions in these simple happy terms.
It also seems perverse to many private sector workers that public workers, who are unionized, pay dues to the unions, which lobby the government for more benefits. Essentially the government is paying people to lobby against itself. Private unions don't have this conflict of interest, their funding is based entirely on profits based on the market.
In the US, the federal and state governments are functionally and legally unable to undergo bankruptcy. Although municipal governments can technically go bankrupt, only five cities have done it since the Great Recession, and none of those bankruptcies actually resulted in significant debt shedding. In that same timeframe, hundreds of thousands of businesses went through bankruptcy.
[1]:http://www.mercurynews.com/2016/11/02/bart-janitors-whopping...
1. Privatization has a terrible track record, but it gains steam when the government is hamstrung by the labor-cost differential.
2. Governments are paying social democrat labor costs, while taking in neoliberal revenues. This makes nice things look inordinately expensive.
3. Jealousy in the private sector fosters conservatism / lazy govt worker stereotypes.
...
Basically long term the private sector unions undermine their own cause.
Once again, if you have a bunch of short-sited actors (c.f. financialization of business) you better be damn well they reach some equilibrium.
Edit: To clarify first sentence, I mean that they do not have to take or hold these jobs.
A city certainly can, and they have, e.g. San Bernardino, Stockton, Detroit.
Just look at San Jose. Just look at Social Security. It is hard to identify these liabilities as working the way they were intended. And what do the people gain from them? Overpaid cops?
0 - http://www.osfi-bsif.gc.ca/Eng/oca-bac/as-ea/Pages/ascpp.asp...
After considering investment returns/time value of money/"net present value" of contributions:
If you were a baby boomer, you'll get ~2x what you put in.
If you were born in the 80's, you'll get half what you put in.
So yes, they "fixed" CPP by changing it so that younger people are legally obligated to "invest" their money in a pension fund that returns half of what it should return based on the contributions younger people are making.
I think CPP is in danger. The danger is that someone will create a clear enough explanation of how CPP was "fixed" and young people will decide that there is no reason for them to allow being screwed the way CPP does.
(I assume you meant immoral, not amoral.)
I don't understand why it's controversial that California (or any other state) should be legally obligated to pay the pensions they promised to workers. People make long-term decisions based on those promised benefits, and pulling the rug out from under them is unconscionable. And, luckily, in California at least, illegal.