Ask the Traitor

This gets a little personal since on tonight’s ‘Ask the Governor’ program Chris Christie attacked the concept of the defined benefit pension:


.
You work hard for decades and earn the right to a monthly benefit to pay for a comfortable retirement. Sure sounds like a concept on which to build a nation.

It’s only when you have traitorous politicians (abetted by pusillanimous actuaries, ignorant media, and absolutely no independent oversight) over-promising and underfunding that it all breaks down and defaults become inevitable.

48 responses to this post.

  1. How insulting! The Chief Executive Officer of our state calls a constituent’s assertion that our country was formed on pensions “stupid”.

    Chris, where did you pick up these arrogant character flaws? Please reserve this bully type behavior for your communications with your sponsor Donald Trump.

    Reply

    • Posted by Tough Love on March 31, 2016 at 1:56 am

      Yes Joel, focus on that (his calling her statement “stupid”) rather than focusing on the content an accuracy of his response.

      Reply

    • Posted by S Moderation Douglas on March 31, 2016 at 10:03 am

      “I grew up in a household with an Irish father and a Sicilian mother, which means that I have been raised on conflict, okay?”

      Reply

  2. Posted by Tough Love on March 31, 2016 at 1:53 am

    Well, the woman’s statement …… “the Country was formed on pensions”…. is indeed quite a ridiculous statement.

    Where Christie went astray was in his harping on the ridiculousness of that woman’s statement, rather than simply asking WHY Public Sector workers should get very GENEROUS and hence very COSTLY taxpayer-funded DB pensions, when the Taxpayers (who are called upon to pay for 80%-90% of the total cost of such Plans) do not get DB pensions, but get DC (401K) Plans with employer contributions (typically 3% to 4% of pay) 1/5 to 1/10 the level that it would take to fully fund the promised Public Sector worker DB Plans over their working careers.

    Reply

    • Posted by Anonymous on March 31, 2016 at 5:41 am

      Even if TL gets her way 50% will still need a gigantic rise in your taxes what a dope she is not to realize that. She is living in Fantasyland

      Reply

      • Posted by Anonymous on March 31, 2016 at 9:06 am

        Is that the same Fantasyland that is next to Bubbleville?

        Reply

      • Posted by Tough Love on March 31, 2016 at 1:24 pm

        I realize that even if NJ froze ALL of the NJ DB pension Plans and replaced them with DC Plans no greater than what Private Sector workers typically get from their employers, the huge excess of the Present value of PAST Service Pension accruals over current Plan assets (roughly $150 Billion using reasonable and under appropriate assumptions) must still be “addressed”….. but doing this does stop digging the hole DEEPER every day.

        Note that above I said “address” not “paid for” …… because those PAST Service promises have ALSO been grossly excessive for decades. Besides, there is no way without VERY material tax increases (and/or service cuts) that the incremental $8 annually could be raised to pay for those promised benefits.

        The NJ Pension and Benefit Commission recognized this dilemma as well, which is why they recommended not just the pension freeze, but a very material reduction in the generosity of and Taxpayer subsidy towards Public Sector worker/retiree “Platinum+” healthcare benefits …. and with those savings being used to help pay down a large portion of the PAST Service unfunded liability.
        ———————

        Greed HAS consequences.

        Reply

      • Posted by PS Drone on March 31, 2016 at 9:51 pm

        A “gigantic” rise in NJ taxes is not going to happen simply for the same crooked and corrupt reason that these ridiculous pension plans exist: greedy, self-interested politicians will quickly appreciate that their jobs will be in immediate jeopardy if massive income, sales or real estate taxes are put on the table in order to partially fund these massive deficits. If these plans are not “bailed out” by the Federal Government there is no alternative to very significant reductions in payouts.

        Reply

  3. Posted by Anonymous on March 31, 2016 at 5:58 am

    Thank you for saving our pensions in 2011 mr. President

    Reply

    • Posted by Tough Love on March 31, 2016 at 1:32 pm

      Thank you Gov. Christie for identifying and denouncing the grossly excessive generosity level of NJ’s Public Sector pensions & benefits as the primary contributor to NJ financial woes, and for standing your ground, demanding a material reduction in the generosity of these pensions & benefits, rather than simply caving in to the unjust and unfair Union/worker/retiree demands that we (NJ’s Taxpayers) continue to pay more and more money to fund them.

      Reply

      • Posted by Anonymous on March 31, 2016 at 7:59 pm

        You must mean a system where pensions are funded like New York which is at about 90% funded. By the way, the typical pension pays 2% per year–which is about 10% higher than the typical NJ rate (n/55).

        The problem is that the state hasn’t paid it’s fair share in 20 years. Looks like bond holders are going to get stuck. Bring it on.

        Reply

        • Posted by Tough Love on April 1, 2016 at 12:08 am

          How Interesting that you only want to compare one grossly excessive PUBLIC Sector pension to other grossly excessive PUBLIC Sector pensions. How about comparing them to the retirement benefits typically granted the PRIVATE Sector Taxpayer called upon to pay for 80% – 90% of the total cost of YOUR Public Sector pension?

          To fully fund over the worker’s career (using reasonable and appropriate assumptions) a n/55 pension (meaning a per-year-of-service formula factor of 1/55 = 1.82%) to a worker retiring at say age 60 with 30 years of service requires level annual total contribution of roughly 30%-of-pay (40% if COLA-increased). Even after the small %-of-pay actually contributed by the workers, the balance foisted upon taxpayer is 5 to 10 times greater than the 3%-4% of pay that Private Sector employers typically contribute into their workers DC Plans.

          THAT is the “proper” comparison .

          Reply

        • Posted by Smooth Moderation Equal on April 1, 2016 at 12:56 am

          “the “proper” comparison” is never the comparison of pensions alone, outside the context of total compensation.

          Never was, never will be.

          More roughage.

          Reply

          • Posted by Tough Love on April 2, 2016 at 12:52 am

            Any Pubic/Private Sector differences in cash pay (properly adjusted for the quality and quantity of productive work-output) will never justify the many multiples greater Public Sector pensions & benefits ….. and you know it.

          • Posted by Smooth Moderation Equal on April 2, 2016 at 1:22 am

            Mark Twain — ‘What gets us into trouble is not what we don’t know. It’s what we know for sure that just ain’t so.’

            ” ….. and you know it.”

  4. Posted by Anonymous on March 31, 2016 at 9:08 am

    If the pensions were more realistic and adjusted regularly to reflect what is going on the real world then perhaps they could be sustainable. However, that is certainly not the case here as way too much was promised to way too many who are doing way too little. The only question that remains is how it will all play out.

    Reply

  5. Posted by MJ on March 31, 2016 at 1:01 pm

    No I did not mean “cut regularly” I meant that if the fund was properly managed and adjusted for economic downturns, higher life spans, more reasonable “promises”, firm laws in place to prevent double and triple dipping, clamping down on false disability claims, employee health benefit contributions keeping up with rising costs, etc. you get the picture. If that had been happening there may not be a need for significant cuts and reforms bu thats not what happened and things will continue to become tighter.

    Reply

  6. Posted by Smooth Moderation Difficult on March 31, 2016 at 5:35 pm

    2:59 “The average teacher who teaches for thirty years in New Jersey puts $126,000 into their payments for their health benefits and into payments to the pension system. And they receive $2.4 million in benefits.”

    My dad was quite the storyteller. Sometimes we had to remind him that we had all heard that story dozens of times. His reply: “But every time I tell it, I try to make it a little better.”

    2:06 “In the private sector, you don’t get pensions anymore.”

    This governor might just be related to Tough Love. Yes, It’s true, there are far fewer defined benefit pensions now in the private sector than there were ten years ago, and far fewer (as a percentage)* than in the public sector. Why exaggerate?

    “Every time I tell it, I try to make it a little better?”

    And the teacher story is bogus to start with. Of those private sector DB pensions that do still exist, typically the employee puts in ……nothing.

    “Every time I tell it, I try to make it a little better”

    ____________________________________
    *Question: If fifteen percent of American workers work for the government, and ninty percent of those have DB pensions; and of the remaining eighty five percent in the private sector, fifteen percent have DBs, who, numerically, has the most Defined Benefit pensions?

    Reply

    • Posted by Sean on March 31, 2016 at 5:49 pm

      “who, numerically, has the most Defined Benefit pensions?”

      Answer: Who cares? It is irrelevant. The real issue is expense, now, isn’t it, Douglas?

      Reply

      • Posted by Anonymous on March 31, 2016 at 6:35 pm

        The question was in response to the statement that defined pensions don’t exist in the private sector anymore. A flat out lie…..
        You could have applied for one of these govt jobs that has a pension…..and if you had, just like TL, you would be defending them. End result? Either way you probably would end of in the same spot….middle class. So stop the nonsense. Your the guy who sits down with a union worker and a ceo for pizza. The ceo grabs 7 slices, looks at you and says-watch it he is trying to take your pizza. That my friend is middle class warfare, a race to the bottom. But,but,but job creators….. yes we don’t get pensions anymore and health insurance is a fortune and pay doesnt keep up but the govt sucks. It’s all govt fault. Yea, let Pfizer rape us, but fuck the govt. How many billion in taxes? 38 I think by moving then”hq” to Ireland? That’s money that doesn’t go for roads that Pfizer benifits from or schools that Pfizer picks graduates from. The corporations threw the worker over board 30 years ago.

        Reply

        • Posted by Sean on March 31, 2016 at 11:18 pm

          Still irrelevant.

          “and if you had, just like TL, you would be defending them.” No, I wouldn’t. Retirement is a personal responsibility. I depend on no one for my retirement. I believe in personal responsibility. Strange concept, isn’t it?

          Reply

          • Posted by MJ on April 1, 2016 at 12:41 pm

            @Sean, I think that companies moving out of the state and out of the country is very relevant in regard to why they are moving……too expensive to do business here…..that means less taxpayers here, less tax revenue, less homebuyers, less corporate donations to schools and charities here, less decent paying high tech jobs here, the same reasons most of the manufacturing jobs have moved overseas or to Mexica and India……because our government sucks! I’m sure all of the senior citizens with their Medicare D don’t feel that they are being raped by pharmaceutical companies, they pay next to nothing……less all around which means way way less to contribute to outrageous pension promises when there is barely enough revenue to keep the state running.

      • Posted by Smooth Moderation Difficult on March 31, 2016 at 7:26 pm

        There are certainly more than one question, and they are all real.

        If one makes the assumption that pensions are an expense we cannot afford, and the further assumption that pensions are excessive, the solution would be simple: reduce (or eliminate) pensions.

        By “excessive” we mean that public compensation is greater than similarly situated private sector compensation, and therefor more than is required to attract and retain qualified employees. As TL says, UNFAIR to taxpayers and UNNECESSARY to attract qualified workers.

        But if it turns out that public compensation is not excessive, then the solution may be invalid. Reducing pensions would be unfair to some public workers and recruiting and retaining qualified employees would be difficult. It is not irrelevant.

        So when the governor (or anyone else) tries to prove that public pay is excessive by making false, exagerated, or misleading claims, he has not “proved” anything. He has done just the opposite; he makes one question why the governor felt it necessary to, for want of a better term, lie about the facts.

        In TLs opinion,

        “The ROOT CAUSE of the pension mess EVERYWHERE is, always multiples greater than those of comparable and similarly situated Private Sector workers.”

        Moderation says, some public workers earn more in salary and benefits than equivalent private sector workers, and some earn much less. Therefor “grossly excessive Public Sector pension promises” is not inherently substantiated.

        Part of the difficulty in verifying whether public worker compensation is “excessive” is that, whereas in the last few years, public pay and benefits have become much more transparent, whereas compensation in the private sector has not. What if, in your city, without naming names, there was a list of positions with their educational or experience noted, with their annual income, including bonuses, perks, overtime, etc.? You might be surprized how many with Bachelor degrees or less are in the $100,000, $500,000, or greater range. In my wifes small local business, there were three with incomes over $400,000 and another half dozen between $100,000 to $200,000. Not a Masters or PHD among them.

        Reply

        • Posted by Tough Love on March 31, 2016 at 7:47 pm

          Quoting SMD ….

          “So when the governor (or anyone else) tries to prove that public pay is excessive by making false, exagerated, or misleading claims, he has not “proved” anything. He has done just the opposite; he makes one question why the governor felt it necessary to, for want of a better term, lie about the facts.”

          And repeat my very appropriate response to you …………..

          “The fact that Gov. Christie repeats the (although accurate) statement that teachers typically contribute $126K (over their careers) but expect to receive $2.4 Million, but WITHOUT adjusting for the time value of money, is unfortunate (because the financial impact is misleading), but even AFTER adjusting for the time value of money, the teachers DO IN FACT get pension payments 5 to 10 times greater in total value than the total value of their own contributions.

          Am I surprised that YOU left that out ?

          Not at all … just more of your “smoothing”.”

          Reply

    • Posted by Tough Love on March 31, 2016 at 7:01 pm

      SMD,

      The fact that Gov. Christie repeats the (although accurate) statement that teachers typically contribute $126K (over their careers) but expect to receive $2.4 Million, but WITHOUT adjusting for the time value of money, is unfortunate (because the financial impact is misleading), but even AFTER adjusting for the time value of money, the teachers DO IN FACT get pension payments 5 to 10 times greater in total value than the total value of their own contributions.

      Am I surprised that YOU left that out ?

      Not at all … just more of your “smoothing”.
      ————————————————————–

      As to yours asterisk statement ……. that’s the math and logic expected of a 2-nd grader. You should stick to changing light bulbs.

      Reply

  7. Posted by Anonymous on March 31, 2016 at 7:40 pm

    ARC the herald Christie sings Pension debt is now his King. Contributions non exsistent glory to the now unfunded.

    http://www.nj.com/politics/index.ssf/2016/03/nj_pension_debt_grew_to_438b_last_year.html#incart_river_mobile_index

    Reply

  8. Posted by Smooth Moderation Difficult on March 31, 2016 at 7:59 pm

    Oy vey!

    I dint exactly “leave it out”, Love, I said:

    “And the teacher story is bogus to start with. Of those private sector DB pensions that do still exist, typically the employee puts in ……nothing.”

    Even some public sector workers “put in ….nothing.” In California, most public workers put in 5% to 10%, but for some, the employer put in their share plus the employee share. The parties may negotiate paying the employee share in lieu of a pay increase.How much the teacher “put in” is irrelevant.

    What is the difference if a teacher is paid $60,000 a year and puts in $3,000, or if the district “puts in” the $3,000 directly and pays the teacher $57,000? One teacher could put in $126,000 and receive $2.4 mill, while the next teacher receives $2.4 mill and “puts in …..nuttin’ “. It’s irrelevant. The teacher story is bogus to start with.

    Am I surprised that YOU couldn’t understand that?

    Not at all …just mo of yo roughage.

    Did I mention you’re getting just about as hard-headed as your BFF, the dog with two names?

    Reply

    • Posted by Anonymous on March 31, 2016 at 8:11 pm

      Why? Got a problem with EQUAL?!?!?

      Reply

    • Posted by Tough Love on April 1, 2016 at 12:51 am

      Quoting SMD ….

      “The parties may negotiate…”

      “negotiate”……….WTF?

      You mean the unions/workers “negotiate” with the bosses who they’ve elected (or their minions), and who participate in the same Plans and have a beneficial interest in maximizing such pensions …….. sticking the betrayed and beleaguered Taxpayers with the bill?
      ————————-

      What’s really “bogus” is your failed attempt to come up with a cohesive argument to support your absurd position …. that the grossly excessive (by any reasonable metric) public Sector pensions & benefits in place today should continue.

      Reply

      • Posted by Smooth Moderation Equal on April 1, 2016 at 2:10 am

        Way to dodge the issue. The point is, the $126,000 the teacher “put in” is irrelevant. Whether the teacher is paid $60,000 and “puts in” $3,000, or the employer pays the teacher $57,000 and the employer pays the entire ARC ( like private sector employers do), the resulting pension is the same. The employer could pay the worker $67,000, and have the employee “put in” $10,000 a year. His statement is irrelevant, meant only to inflame.

        “minions”? … “sticking the betrayed and beleaguered Taxpayers with the bill?” ….”grossly excessive (by any reasonable metric)”?

        You truly need to get a life, Love. Your paranoia and agida are not good for your health.

        You could use a little moderation.

        And smoothing.

        Reply

        • Posted by Tough Love on April 1, 2016 at 1:52 pm

          You’re correct that the contribution $-in vs pension $-out isn’t really the item that SHOULD BE focused upon.

          What Taxpayer’s SHOULD demand is that THEY contribute towards their Public Sector worker’s pensions NO MORE (as a % of pay) than what they get from their own employers towards their retirement Plans.

          With Taxpayer typically getting no more than 3%-4% of pay into a 401K Plans plus their employer’s 6.2% of pay Social security contribution on their behalf …. totaling just about 10% of pay …. THAT (10%-of pay) is all that taxpayers should contribute towards Public Sector pension.

          But 10% wouldn’t even get close to paying for the incredibly generous Public Sector pension promises in place today.

          When properly valued, to fully fund over the workers careers, the DB Plans in place today have a total cost of 30%-40% of pay for non-Safety workers and 40%-60% of pay for Safety workers. Subtract the employees own contribution and the balance …. typically 25% to 35% of pay for non-Safety workers and 30% to 50% of pay for Safety workers is foisted upon taxpayers as their responsibility.

          Taking the mid-points ….. a Taxpayer responsibility of 30%-of-pay for non-Safety workers and 40% of pay for Safety workers ……. is 3 to 4 times what the Taxpayers get from their employers, and that’s assuming that NONE of the Public Sector workers participate in SS. For Public Sector workers who do, that multiple rises to 10 times.

          So who’s “dodging the issue” ?

          Your “smoothing” is just more of your misstatements, mischaracterizations, omissions of PERTINENT facts, and your ongoing attempt to distract the readers from the appropriate issues and comparisons.
          ——————————————————————————

          Public Sector workers are NOT “special” and deserving of greater pensions and better benefits than those of the Taxpayers who pay for theirs.

          Reply

          • Posted by Smooth Moderation Anonymous on April 1, 2016 at 2:52 pm

            Stopped reading after “You’re correct”

          • Posted by Tough Love on April 1, 2016 at 2:55 pm

            SMD, The truth too difficult to deal with?

          • Posted by Smooth Moderation Difficult on April 1, 2016 at 3:01 pm

            If I see it, I’ll let you know. In the meantime, You’re still talking about pensions alone, outside the context of total compensation.

          • Posted by Tough Love on April 1, 2016 at 3:58 pm

            SMD,

            As I’ve stated many times, I support EQUAL Public/Private Sector “Total Compensation” (pay + pensions + benefits) in reasonably comparable jobs and where the educational, experience, knowledge and skill requirement are similar ………. AND where the measurable work-product output of the employees is similar……. meaning that (for example) the Public Sector CPA who typically works 40/hrs weeks is NOT entitled to the same cash pay as the Private Sector CPA, many of whom routinely worker 50 to 60/hrs week (and often far more during tax season) ….. and hence a lower Public Sector CPA cash pay is NOT supporting justification for their undeniably MUCH MUCH greater pension . (witness the absurd pension …. beginning at age 53 … of commentator “Now Retired Pat”).

          • Posted by Smooth Moderation Equal on April 1, 2016 at 9:39 pm

            There’s an app for that!!

            The BLS Occupational Compensation Survey Program

            http://www.bls.gov/mlr/1996/05/art2full.pdf

            They do detailed studies of various occupations at different levels and in various locations around the country. Like every other study, they concluded that:

            “Comparison across occupations reveals that workers in lower paying jobs were more likely to be paid better in the public sector. Workers in higher paying jobs were more likely to be paid better in private industry.”

            You may not like that, and think it unfair, but the researchers call it more “egalitarian” than the private sector, and I see no indication that anyone believes this would, or should, be changed in the future. I don’t see much stomach for reducing pay or benefits of the clerk’s and janitors, and even less desire to increase the pay of city managers and school superintendents.

            But, face it, a lot of this is optics. The annual average wage in the US today is just over $48,000. The median is $36,000. There are a lot of public workers in these salary ranges, but they never make the headlines. Only the highest salaries and pensions make the headlines.

            “Economic Stress And Public Perception

            John Russo, a professor at Youngstown State University and co-founder of its Center for Working Class Studies, acknowledges that economic stresses and uncertainty in the private sector have fed resentment toward public employees.

            “A lot of people are going through difficult times — we’re seeing a decline in the middle class, and people are looking at teachers, firefighters and other public employees as doing better,” he says.

            “That has fed the notion that those employees are paid better, but the actual figures show they’re not,” says Russo,…”

            Moreover, there are a lot of private sector workers, (not just high profile CEOs) who make as much or more than firefighters, teachers, or $200,000 sheriff’s or city managers. They don’t make the headlines either.

          • Posted by Tough Love on April 2, 2016 at 1:02 am

            Quoting SMD ……

            “Workers in higher paying jobs were more likely to be paid better in private industry.””

            As a Group and not looking at the details BEHIND THE PAYCHECK I wouldn’t disagree. But adjust for the quality and quantity of productive work output which incorporate a stronger PRIVATE Sector work ethic (and fear of losing their high paying jobs), and certainly measurably longer hours/week, and much of (or all ??) of that difference in wages goes away.

  9. Posted by Javagold on March 31, 2016 at 10:47 pm

    I love the public takers go to argument. You are just jealous that you picked wrong career.
    What They don’t understand. That they chose the wrong career. If fantasy world was to have continued the private sector would be making more money than the public takers and have a better Standard of Living. Unfortunately 2008 happened and the bubble burst. Now the tricky part for the public takers is not understanding that the private sector is broke. Which means no more money for the public takers pension Ponzi scam. Sorry. Heads they win. Tails you lose.

    Reply

  10. Posted by Smooth Moderation Equal on April 1, 2016 at 10:21 pm

    1:34. “I don’t think that we should have public sector employees doing these jobs. I think we should privatize them. I think there should be private trash collection.”

    Ironic. There is no doubt that when the state privatizes menial jobs, the private gardeners or trash collectors will make less money overall than did the public sector workers who previously did that work (although questionable whether the government will actually save money overall.)

    But it seems, anecdotally at least, that when the state hires outside contractors for high level lawyers, IT, engineers, etc., the private sector always costs more than an equivalent state employee. Has anyone seen any data on that? Not just individual examples, but actual data.

    Reply

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