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State Fiscal Problems
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swchandler



Joined: 08 Nov 1993
Posts: 6020

PostPosted: Tue Jan 18, 2011 4:01 pm    Post subject: Reply with quote

"My point is that means testing for social security could be very unfair given some individuals more generous retirement benefits and options."

I think that means testing for Social Security would be totally inappropriate, especially since Social Security was never intended to be a sole source for retirement funds. To have a reasonably comfortable and secure retirement, one needs to have saved over time and built a sizable sum of money to live on. 401K plans and IRAs give one the chance to do that. Just because one worked hard to build a nestegg to rely on in retirement, it should not be grounds to deny them the Social Security compensation they paid their whole career for.

Personally, I don't receive a pension, but I've built up a reasonably good nestegg to rely on. However, at least for me, Social Security is an important facet in my retirement plan, and I would be in a very unfavorable position if it was denied now. I retired 6 years ago under the assumption that I would start Social Security at 62 years old. At this juncture, with less than 6 months to go to reach 62, I have to admit to being very nervous with all the heated discussion about changing Social Security. Although Senator McConnell was totally fired up about the need to extend the Bush Tax Cuts, he now on record boldly calling for Social Security reform as first order business in the 112th Congress' agenda. Because of jerks like McConnell and others of his mindset, there is no way in hell that I could even think of supporting a Republican for anything.
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coboardhead



Joined: 26 Oct 2009
Posts: 2036

PostPosted: Tue Jan 18, 2011 7:37 pm    Post subject: Reply with quote

jpbassking said

Quote:
By and large company pensions have been replaced by 401K's. Show me a place that continues to pay for health insurance after you retire and I will apply.


I did not intend to get sidetracked into specifics of the different retirement plans. However, I have several friends who get health insurance in trade unions, reduced health insurance premiums in state and federal plans, and medicare secondary from previous large (airline) corporations.

swchandler said

Quote:
However, at least for me, Social Security is an important facet in my retirement plan, and I would be in a very unfavorable position if it was denied now


Agreed. I have always thought that social security should be part of MY retirement plan, since I have paid 15% of my income for 35 years. The max. my KEOGH can do is similar.

As you said, we all should come to the table. But, I am not sure I want to. I think this will be the sentiment for all. So, these pensions are gonna be a fiscal difficulty to say the least.
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swchandler



Joined: 08 Nov 1993
Posts: 6020

PostPosted: Tue Jan 18, 2011 11:51 pm    Post subject: Reply with quote

"As you said, we all should come to the table. But, I am not sure I want to. I think this will be the sentiment for all. So, these pensions are gonna be a fiscal difficulty to say the least."

Quite frankly coboardhead, you've lost me. Seemingly, I'm not up to speed on your drift, so I'm missing it. Nevertheless, I would like to better understand what you're trying to say.
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coboardhead



Joined: 26 Oct 2009
Posts: 2036

PostPosted: Wed Jan 19, 2011 8:39 am    Post subject: Reply with quote

swchandler said earlier

Quote:
In a real effort to resolve our substantial debt and deficit problems, negotiation and cooperation between ideological extremes is paramount. There must be a recognition that shared sacrifice has to be embraced. I wonder though, whether we as a nation can overcome the selfish thought that "it's only about me".



I said

Quote:
"As you said, we all should come to the table. But, I am not sure I want to. I think this will be the sentiment for all. So, these pensions are gonna be a fiscal difficulty to say the least."


My point is, epecially when it comes to pensions, folks are NOT going to give up anything they already have. I wouldn't.
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swchandler



Joined: 08 Nov 1993
Posts: 6020

PostPosted: Wed Jan 19, 2011 1:44 pm    Post subject: Reply with quote

Thanks coboardhead for your clarification.

Regarding pension reform or restructuring, I have no doubt that you're right. The closer we get to home, the more difficult things get, especially when the subject is personal income. I have a few friends that are receiving pensions, either from the state of California directly or through the University of California, and I know that pulling the rug out from under them at this point would be terribly unfair and difficult. Frankly, the state has an obligation to meet its existing commitments, and that just might require an increase in taxation.

On the bigger scheme of things, pension reform must come into play, because it doesn't make a whole lot of sense for the state and local governments to keep following the same path. The impact of the current recession has made that crystal clear to many. In my view, many of the government's pension compensation formulas are quite extravagant, particularly given the fact that the pensions available to those working in the private sector, if they exist at all, do not even come close.

There was a time at the company that I worked for where the contributory retirement plan was no longer available to new hires. However, the company continued to honor its obligations to the employees that were ongoing participants in the original contributory plan. New employee received a non-contributory pension plan, but it was no where near as good. In most private companies today, the shift has been made to 401K plans where the company might match employee contributions to some degree.
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coboardhead



Joined: 26 Oct 2009
Posts: 2036

PostPosted: Wed Jan 19, 2011 3:29 pm    Post subject: Reply with quote

As mrgybe pointed out, the 401k pension will become the standard for most retirement plans moving forward, including government jobs.

Existing government pension holders may not be in the clear (rightly or wrongly). In Colorado, South Dakota and Minnesota, the states are adjusting payments, via reductions in cost of living increases, to state pension holders.

The employee unions are suing. The results of these lawsuits may have profound effects.
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keycocker



Joined: 10 Jul 2005
Posts: 3538

PostPosted: Sun Jan 23, 2011 9:31 am    Post subject: Reply with quote

Many in my family are traditional conservatives. When I and others have been out of work, we don't apply for unemployment. Our numbers are large enough that published unemployment figures are surely low.
We wait until the last minute on SS so that we can take care of ourselves as long as possible.
I skipped health insurance until I was married. I have a health costs and insurance account. Our lives are spent on the road, and most plans don't repay costs in foreign countries anyway.
We get the most out of my heath insurance account by using it to protect our rental homes as well, which also carry no insurance.
I sell island land without banks. We make loans ourselves to the clients.The bank crisis had nothing to do with my real estate biz.
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coboardhead



Joined: 26 Oct 2009
Posts: 2036

PostPosted: Mon Feb 21, 2011 8:08 pm    Post subject: Reply with quote

Budget deficits have put states in desperate positions to cut spending due to decreasing revenue as a result of the recession, increasing medical insurance costs, and decreasing Federal funding. Without the reduction of benefit packages to public employees, the state government's abilities to balance their budgets are really not possible.

Unfortunately, in Wisconsin, the State Governor may be overstepping in the political fury to reduce the deficit. Using the budget crisis to effectively eliminate the public employee unions is going beyond what is necessary to accomplish the cuts.

I am not a proponent of public employee unions. Originally, the unions bargained for salaries, working conditions and benefits. However, they have evolved into political machines that I feel provide too much power to the employees to "pick their own bosses".

That said, using a crisis to advance a political agenda is not productive long-term governing. In Wisconsin, in addition to an attempt to destroy unions, the budget proposal also strips the full legislature of it's ability to determine how Medicaid dollars are spent. This is going too far!

The entire public employee benefit system, union involvement and pension funding needs to be addressed as a comprehensive policy with all parties involved. Not by using threatening political games.


Last edited by coboardhead on Mon Feb 21, 2011 11:41 pm; edited 1 time in total
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dsgrntlxmply



Joined: 16 Jun 2010
Posts: 240

PostPosted: Mon Feb 21, 2011 8:41 pm    Post subject: Reply with quote

mac wrote:

Second, California's system is perhaps too progressive. The stock market crash, and attendant drop in capital gains, was, I believe, the biggest source of the drop in revenue.


This is not really an indication that California's tax system is too progressive. What it does indicate is that California's income tax revenue stream is highly variable. In past stock market bubble times, especially 1999-2000, there have been immense extraordinary flows both of capital gain income, and of what gets categorized as ordinary income (but is of course extraordinary) from exercise of employee stock options.

If California is not allowed to carry surpluses forward into rainy day reserves (I have not verified this assertion, but it probably is true), that is a problem.

The greater problem is that every time we have a boom, our corrupt and moronic legislature acts as if the boom revenue establishes a reasonable new baseline for spending.
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mrgybe



Joined: 01 Jul 2008
Posts: 2888

PostPosted: Tue Feb 22, 2011 10:29 am    Post subject: Reply with quote

This is what the dispute in Wisconsin is really about.

http://www.opensecrets.org/orgs/list.php
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