These pensions and their medical side are the reason why the ACA did not touch golden medical plans because the vast majority are in this area along with certain other larger private pension systems. By the way, the House silently dropped that provision entirely from the ACA in 2019 so they any taxation of them is gone.
My favorite story to fall back on is provided below... and there are other states worse off. This type of largess should never have been allowed nor should the tax payer bail them out. People bemoan the pay of executives at private companies, well guess who is right up there in many cases.
https://www.forbes.com/sites/adamandrzejewski/2018/10/26/ill...
It is also kind of shocking to see how many employees actually work for city and state governments. And of course government workers have a strong reputation for not being incentivized to work very hard or do more than the bare minimum. I would think the bigger opportunity would be to reduce the size of local government payroll rather than lower everyone's salaries.
Related thought - I wonder, why aren't city and state governments more at the forefront of automating menial work away, given the perpetual costs of each worker on the pension system? It seems they'd have a lot to gain from it.
City and state governments don't pay the bills - that's the problems. Any cuts they make will hurt them in elections, so they just kick the can down the road to the next government.
it’s moral hazard
California is no longer a net contributor to the union[1], since SALT reform.
1. https://www.mercurynews.com/2020/04/23/newsom-responds-to-mc...
Also for 4 of the 5 top employers in Texas are oil companies. Oil production is subsidized by the feds. Texas is a taker. They also will all go bankrupt unless bailed out with California tax money.
There is no reason for people in other states to subsidize your California state tax payments with a federal tax break.
maybe think before electing politicians who raise them if youre upset
Funny I never hear the argument from red states "We don't want your federal money for all the poor, sick, disabled, in our state!" considering CA and NY pay WAY WAY more out than they get back in federal money
And it's mostly absurd, because it just looks at net transfers between the states and Feds without realizing who is actually benefitting from that money.
How many small family farms do you think are left in much of the Midwest, who are living high on the hog with government subsidies, as the left likes to imagine?
Is it a transfer to Iowa or Nebraska when the federal government pays out a few billion in farm subsidies, which then goes straight into the pocket of fund managers in Manhattan, sovereign wealth funds, or megacorps who actually own the farms
How bout when Wall Street got bailed out in 2009 to the tune of hundreds of billions of dollars? Do we count that as a subsidy to New York, Jersey, and Connecticut?
Even if the money was paid back, there's no way to calculate the trillions of dollars citizens of other states lost due to perpetually low interest rates or propping up houses in coastal areas at the expense of people living in low COL areas.
There's a dozen other ways we can measure these types of back door transfers, and I guarantee you, it ends up that those blue coastal states are getting a lot of extra subsidies that the silly stats that you guys use ignore.
It's just progressive taxes applied to the entire country, where NY and CA are "the rich" among the states.
After all, a staunchly republican poor individual in CA/NY still gets the same benefits as a poor democrat, because need (not opinions) dictates how much you get. Of course, Texas isn't exactly poor, my point is more relevant to states like South Carolina, Louisiana etc.
Look at the average retiree's 401(k) balance for comparison and it gets pretty clear how unfair this is. There's a huge political opportunity for someone to tell this story properly and get a restructuring done.
I live in a neighborhood with two firefighters who were captains, retired at 50, and make over $100K a year. It's totally unsustainable.
What about the pensions of workers (many unionized) which were obliterated by corporate restructurings during the financial crisis?
EDIT: The often worked much more hours.
To buy an annuity at age 55 worth $100k / year with guaranteed health, dental, long term care, etc. for an employee who's estimated to live another 30 years would cost a few million dollars. A quick Google search shows that the media 401k balance at 55 - 65 in the US is under $75k. The amount of non-guaranteed dividends, cap gains, and withdrawals made to ensure it lasts 30 years would probably not even cover the cost of Obamacare from 55 to 65 when they're eligible for Medicare.
The deal that was struck was between the government workers and the voters at that time. That deal, more or less, said that future tax payers would pay for their pension. As a group, those then future and now present tax payers don't have much of a moral obligation to follow a deal that they never agreed to. And the workers don't get to act indignant that their pensions are in question. Their unions negotiated the agreement and chose to let the buck be passed instead of insisting on pensions being fully funded.
The bargain was, at least in part, corrupt. The various public unions would campaign for and help elect those that would give them more money. An obvious conflict of interest that raises questions on why a shady deal should be upheld.
The pensioners are, in general, gaming the system. They artificially inflate earnings at the end of their career to pump up their pension. Nepotism is rampant and there are plenty of positions with absurd salaries for what they do. They've sold out new entrants in their field to protect their own pensions. In general they're a bag of dicks. Fuck them.
I've heard this claim many times before. Is there data supporting this or did a handful of people do it and word spreads like it is far more common that actual.
Pension spiking could cost CalPERS nearly $800 million
https://www.latimes.com/business/la-fi-pension-spiking-repor...
Now it comes time for due, we don't want to fund these anymore.
The entitlement in HN is just too much.
what about the police, fire department?
(This is true for all dangerous professions, BTW - not just law enforcement and medical personnel.)
There are outsized risks involved in both occupations.
I live in DC, and at my age many professionals who don't really have any lucrative skills or degrees are now hitting the 6 figure club in late 30s as GS13s. They'd be making less working at some private company without any pension, longer hours, less vacation, and worse benefits, and no guaranteed promotions.
In this town, a lot of people would be more than happy to get a nice office job working for the Federal Government, but it's not that easy anymore unless you're a certain special minority or other who gets pushed to the head of the line.
I didn't realize I was signing up for an "unstable retirement" by working in the private sector.
Perhaps you mean "stable jobs", which indeed was historically supposed to be biggest selling-point of govt jobs, and the trade-off for lower pay. Though now when you count benefits, apparently they get the best total compensation too.
On one hand, it's just part and parcel of politics, but there needs to be some kind of counterbalance to this. Maybe a taxpayer revolt would fix it?
The people who agreed to this never wanted to fund them in the first place. If they had, they would have increased taxes or reduced benefits. Instead, we are seeing guaranteed 3% pension increases annually when inflation is <2% and rosy projections about 8% stock market returns when in practice it's more like 5%.
They are asking for help due to hundreds of millions lost in tax revenue.
"71,000 public employees at every level of Illinois government received six-figure paychecks. Additionally, 23,000 retirees pulled down more than $100,000 in annual pensions."
There is nothing to applaud with his actions or statements. It’s just malicious and gives the rest of the world a chance to out compete America.
One fix would be to require that all future obligations be funded up front. Make the pension as generous as you like, but deposit the cash now. If you invest the money and do well, the state can just keep that, but don't assume positive returns.
Perhaps our political culture has changed and people used to be more honest, or far-sighted. But, given the world we live in today, especially given the pressure state and local governments are under, I think there really is no other option than a fully-funded 401(k)-style defined contribution plan, to finally force the issue into the open. There are plenty of well-managed 401(k)s and it's the only way to get "cash on the barrelhead" that keeps everyone honest, and doesn't allow the sort of absurd can-kicking so many governments (and their electorates) have favored for the past 30 years.
The problem is that this was not properly budgeted for when funding the pensions.
Give me a break.
If we're lucky, we find out about these things when a government changes hands and an audit is conducted - typically years after the fact. Also, one can start one's career under a sound system that is eroded through mismanagement.
A lot of the people who have these pensions took the jobs before google even existed, so telling them they should have googled this is ridiculous.
When the folks making crazy promises are dead and/or gone by the time their promises are broken when the funds come up short, the workers who took the good deal are left holding the bag.
We must retroactively assign blame to the worker who was lured into accepting obvious false promises. It is perversely the most compassionate thing we can do: blame and shame past workers for making stupid deals. We do this so that future generations will learn the hard lesson that governments cannot be trusted with their investments. There is no power in investment.
Blaming past politicians for their malfeasance is exactly how we enable today's politicians to keep kicking the can down the road.
That is no longer the case when compared with comparable private sector jobs since at least the early 2000s in many parts of the country.
The Federal government can easily tax /discredit those wealthy pensioners to fund unemployment insurance, if they do choose.
Airlines? Of course. Junk bond investors? Sure, why not? States? "We're not going to bail out Democratic-run states."
Now we have this bloc of red states in the South who are backward, racist, intolerant science deniers, and they've managed to get just enough on the winning side of the electoral map to make the advanced, multicultural, cosmopolitan science-respecting blue states' lives miserable.
That chunk of states should be a separate country. Then they can go their own way and the rest of us can carry on without them.
For example, take a useful look at CityLab's Congressional Density Indicator [1]. There are zero "pure urban" districts that are represented by Republicans, regardless of the state (red, blue, purple), and there are nearly none among the "urban-suburban mix" districts (again regardless of state).
Viewed through yet another lens, by percentage of landmass, Alabama is more is more "blue" than Illinois and Oregon [2]. Your characterization could use a little more thought and refinement.
[0] https://www.niskanencenter.org/wp-content/uploads/2019/09/Wi... (see section beginning page 12)
[1] https://www.citylab.com/equity/2018/11/citylab-congressional...
[2] https://www.nytimes.com/interactive/2018/upshot/election-201...
On the other hand, I really like the idea of splitting apart the country in a way that frees most of us from a large enough number of the people who are holding us back. I don't think that's possible to do in a fine-grained way. It only makes sense if done for some large contiguous regions. And the states in the southeast who actually did try to break away a few generations ago seems like an obvious way forward with that.
Here is another look at some of the natural regions within the country: [1]
I'm also aware that changing the voting systems we use holds a lot of promise for some of the same underlying problems we're talking about, and am completely open to that as an alternative to, or in addition to, my suggestion to break up the country. But that too seems very difficult politically.
[1] https://www.nytimes.com/2016/04/17/opinion/sunday/a-new-map-...
I'm not a political scientist, but at some point the increasingly larger 60% of the population is going to take this country back. I hope they're able to do it without a war.
Humans are happier if they're grouped together with their own tribe, and not with other neighboring tribes they don't identify with. In this way it's like some of the problems in Africa and the Middle East where the groups there had borders imposed on them that didn't follow this simple principle.
If each state has its own version of the CDC (and other similar agencies), then that's fine, but they also need to have a lot more sovereignty over things like (in this case) being able to close their borders to neighbouring states whose agencies may have come to differing conclusions about what measures are needed.
Commerce Clause of the US Constitution stands in a way. It (the Commerce Clause) has been a bedrock of the federal government pushing through progressive policies onto the states.
If you live in a house of five and each person buys their own groceries and cooks their own dinner, it does not matter how you scrimp and save. It is still cheaper on the whole to buy raw ingredients for dinner and make it for five people. The cost goes down dramatically>
Yes there is a CDC in every state. It would be utterly ludicrous spend of cash to have an independent, not cooperative CDC in each state attempting to manage and solve the same problems.
This makes sense, but what about one level up? I live in an apartment building, and in our building each family buys their own groceries and cooks their own dinner. It does not matter how much you scrimp and save, it is still cheaper on the whole for the building to buy raw ingredients and make dinner for all families. The cost goes down dramatically.
This also makes sense, but what about one level up? If each building buys groceries and cooks dinner for all of their homes, it does not matter how much they scrimp and save. It is still cheaper on the whole for the entire city buy raw ingredients for dinner and make it for all of the buildings and their families. The cost goes down dramatically.
This also makes sense, but what about one level up? If each city buys groceries and cooks dinner for all of their buildings and homes, it does not matter how much they scrimp and save. It is still cheaper on the whole for the entire State to buy raw ingredients for dinner and make it for all of the cities, their buildings and their families. The cost goes down dramatically.
This also makes sense, but what about one level up? If each State buys groceries and cooks dinner for all of their buildings and homes, it does not matter how much they scrimp and save. It is still cheaper on the whole for the entire Union to buy raw ingredients for dinner and make it for all of the States, cities, their buildings and their families. The cost goes down dramatically.
This also makes sense, but what about one level up? If each Union/country buys groceries and cooks dinner for all of their buildings and homes, it does not matter how much they scrimp and save. It is still cheaper on the whole for the entire world to buy raw ingredients for dinner and make it for all of the nations, States, cities, their buildings and their families. The cost goes down dramatically.
We both agree that at some point, this stopped making sense. The question is: is an ideologically divided Union of 330 million people across 50 states with their own Constitutions and governments equivalent to a “house of five”?
The current system is effectively all 50 states in an eBay-style bidding war over the same limited resources.
https://www.fsis.usda.gov/wps/wcm/connect/fsis-content/inter...
No EPA. No DOE. No equality under the law. No EOC. No NLRB. No Amtrak. No federal enforcement of consent decrees. No voting right act. No gay marriage, etc?
Edit: Thanks for downvotes. Every single one of these is enforced by federal and not state courts. It is federal court that gave us Roe v. Wade, for example. It is a federal court that prevents Alabama from running its own little fiefdom. It is a federal courts that gave us Brown v. Board of Education.
But alas, one of those founders, Jefferson, argued we should rewrite the constitution every 19 years.
And another founder, Hamilton, argued that ambition must be made to counteract ambition. And that government is a reflection on human nature, most directly its citizens. https://avalon.law.yale.edu/18th_century/fed51.asp
Politically, it moderated him significantly. He started off as very pro-revolution, pro “watering the tree of liberty with the blood of tyrants and patriots”, and by the end he ended up regretting France not shifting into a constitutional monarchy. This is after both witnessing The Storming of the Bastille in person (he was an ambassador then), defending the September Massacres[0], and knowing quite a few people who were executed during the terror.
There is a comfort that comes from the instability of party switches. The parties don't cooperate, which means less can get done. Anything that puts anyone in an area where one of the gangs of politicians can actually do something, is to be avoided. We've learned that the hard way in Wisconsin.
As a general rule, it's always best to split up your government as much as you can.
Your strategy is one guaranteed to ruin your country.
This opinion requires a great deal of justification.
The book American Carnage is a fantastic deep dive on this (and extremely fair and even-handed, despite the bombastic title).
If "that" is the cause-effect relationship claimed above, no we are not "seeing" this right now. There is a huge difference between events and the narratives, accurate or otherwise, which some people use to explain those events. The system under consideration is insanely complex, with an immense list of causal factors at play. To me, in my opinion, it's obvious that the causal relationship described above is at best a tiny contributor that is, itself, dependent on other factors also being present. At worst, it's completely wrong and a distraction from understanding the real causes.
Now there may be a point of diminishing returns. As in 5 parties are as good as 10, are as good as 15. But that's an academic question, and we're not even at 5 parties yet.
On the other end, maybe 500 parties is self defeating, as you say. But we're nowhere near that either.
On the other hand, too many parties becomes unwieldy, and I'd argue that 10 is already going to be too many in practice.
Historical experience in the early 20th century led many countries to develop minimum bars, e.g. parties with fewer than 5% of the vote not getting any seats in parliament.
At some point, those taxes would be so high, people would start leaving the state, and at the point of bankruptcy, the state would be a ghosttown.
A law would have to be passed and there would probably be a challenge to it that would eventually go before the US Supreme Court.
If that's so then he's had plenty of opportunity to make that known. Based on the media frenzy around this, it's quite clear that he meant and continues to mean a literal, actual, non-sarcastic bankruptcy.
"Under the Constitution, bankruptcy is a power entirely reserved to the federal government. An American bankruptcy is overseen in federal court, by a federal judge, according to federal law. That’s why federal law can allow U.S. cities to go bankrupt, as many have done over the years. That’s why the financial restructuring of Puerto Rico can be overseen by a federal control board. Cities and territories are not sovereigns. Under the U.S. Constitution, U.S. states are.
Understand that, and you begin to understand the appeal of state bankruptcy to Republican legislators in the post-2010 era."
https://www.theatlantic.com/ideas/archive/2020/04/why-mitch-...