Pension Crises and “Hope”-Strange bedfellows?

Timothy Alexander is an economist with a proposal to solve a multi-trillion dollar problem. Here it is.

Do we have a national crisis?  Take a map of the US and a pen.  Tick off each state with a pension crisis, public and private; NY, NY, CT, KY, IL, AK, CA,…  How many states need to be checked before the most critical skeptic concedes there is a national crisis – a quarter, half or two thirds of the states?  Whatever level is needed to determine a national crisis we are now beyond that point.

When I read this blog I see very diverse and angry comments.  I then reflect on the poem at the base of the Statue of Liberty, the words of Emma Lazarus:

“Give me your tired, your poor, Your huddled masses yearning to breathe free…”

Why do we have these words? Compassion!  Why does America go around the world with rescue missions following disasters? Compassion!  Some believe the words “as you sow, so shall you reap”.   These are true but I follow different good words from a good book – the good Samaritan with the lesson of compassion – the words of: “I desire mercy, not sacrifice”.  In America we need to remember we have a precedence for compassion.

Do we ask federal programs to do without so that pensions are restored, cut education, defense, etc.  I say no!  California taxpayers would need to pay close to $30,000 each to restore California public pensions.  I do not believe that taxpayers could, nor should, pay for resolution.

I am an economist and I offer solutions.  I start with two words. The first is “hope”.  Where does one find hope?

The Federal Reserve is about to sell more than $4 trillion in assets.  These assets have been previously bought.  The money from these sales is a windfall.  I propose these be dedicated to pension resolution.  This is part of my economic model and can work.  There is insufficient money to make all pensions whole but with prudent reforms there is money to cure many ills; solutions without new taxes.

You may not look, think, or vote like your neighbor, but this retirement terror is universal and apolitical.  Hope that we can stand together, firm, both public and private retirees, and demand better.  In America, we are entitled to a revolution every two years, at the voting booth.

My second word is “rejoice”!  After hope that we can stand together rejoice in the realization that with the vote we are empowered with solutions of new money and reforms.

The pension crisis is a non-partisan issue and I am asking for people to toss out preconceived ideas and beliefs.  I will not tell members how to vote but rather to demand accountability for votes cast.  Tell leaders they have until election day to solve this, as prudent reforms and funds are available now.  If there is no tangible solution before election day then voters should say; “your replacements will solve this!  Today we clean house!”  Do not wait for tomorrow’s empty promises and impotent representation.  My assignment to any with fear is to reflect.  Do you want to fear or to rejoice? After you find hope there is a solution. Rejoice by being empowered to know that you and your neighbors can demand a solution before the next round of voting.

An economist friend tells me the words of “hope” and “rejoice” are not economic terms.  I am not speaking to a room of economists but to frightened retired Americans like my parents and his.  While these words are not economic terms they are necessary and appropriate.

My state of California had a fool governor and we tossed him out mid-term.  Are you scared enough to do the same without concern for political affiliation?  Can you toss out those you put in if they fail to deliver?

To the most hardened pension critic, two closing questions.  My parents are in their mid 70’s and will live to see dramatic cuts in Social Security assuming no changes.  As you bang your fist on the table in anger what is your retirement plan and how certain are you that your pension is safe?

Timothy Alexander
Managing Director
www.triunegfs.com
805/402-4943

All comments are welcome.

 

81 responses to this post.

  1. Posted by Anonymous on November 11, 2017 at 2:50 pm

    TL doesn’t give a crap about anyone but herself

    Reply

    • Posted by Tough Love on November 11, 2017 at 3:47 pm

      Actually I “give a crap” about everybody, which is why I so strongly advocate to end the THEFT perpetrated upon Private Sector workers by the Public Sector Unions, and enabled by the Elected Officials who have been BOUGHT.by those Unions with BRIBES disguised as campaign contributions and election support.

      Reply

  2. Posted by boscoe on November 11, 2017 at 3:25 pm

    Is this a late April Fool’s joke? This guy’s company has a non-active website, and his LinkedIn profile says he’s been with them for 117 years. https://www.linkedin.com/in/tim-alexander-9143a61b

    Not to mention that his claim that the Fed is about to sell $4 trillion in assets could use a little fleshing out…..

    Reply

    • Posted by Timothy J. Alexander on November 12, 2017 at 12:12 pm

      Hi-Tim here. Apologies as my web site is being rebuilt. My company has a total of 117 years expertise, summation of years work experience for all coworkers. Please feel free to call. I welcome intelligent conversation.
      PS-when looking at the national pension crisis, this is larger than the banking crisis. The government gave a banking bailout so why not pensions. The Fed has announced it will sell the securities, what does the money go for? I am saying we stake it for pension relief.
      What do you and millions like you have to loose?

      Reply

      • Posted by PS Drone on November 12, 2017 at 8:31 pm

        If I recall the $4 Trillion in “assets” that the FRB has were obtained by purchasing debt issued by the Treasury Dept. using printed money, i.e., by debasing the US fiat currency. So they are not real assets and there is no real money to “solve” (meaning federal government bailouts) the national problem of inadequate state pension funds. The solution is to cap the annual pension benefit at $60k (50% more than SS) and not allow any benefit payments before age 66. What is good for the private sector is also good for the drones.

        Reply

        • Posted by Timothy J. Alexander on November 12, 2017 at 8:51 pm

          Thank you PS Drone.
          The Fed bought many securities, including T-Bills, so you are partially correct there. But there are many other securities as well, stocks, mortgage portfolios, etc. Since the Fed does not release details and neither do Fed audits release securities details, we can only speculate.
          I would also agree, in part that what you say, explains how we, as a nation, are in a national liquidity trap. This is a result from our spending our way out of the depressions. But it is more complex than you suggest.
          I disagree these are “not real assets and there is no real money…” These are real assets. This is a fact. These assets have be bought, an be sold and have real value. Read one of the Federal Reserve Bank of NY audits.
          When these securities are sold, there will be a windfall of cash. The question is what to do with this cash?
          I always welcome intelligent conversation, thank you.
          Tim Alexander
          805-403-4943

          Reply

          • Posted by PS Drone on November 13, 2017 at 12:21 pm

            Regardless of what the “assets” are, they were acquired by printing money. So take comfort that the FRB has (dubious value) assets, but they would not have been acquired without the printing press. As such we are only fooling ourselves that our government, with all of its assorted appendages, including GSE’s, has any real saleable “assets” (land excluded). We are over $20 Trillion in booked debt and probably at least another $100 Trillion in unbooked net obligations.

  3. Posted by Tough Love on November 11, 2017 at 3:36 pm

    Quoting the critical part of your post…………..

    “Do we ask federal programs to do without so that pensions are restored, cut education, defense, etc. I say no! California taxpayers would need to pay close to $30,000 each to restore California public pensions. I do not believe that taxpayers could, nor should, pay for resolution.

    I am an economist and I offer solutions. I start with two words. The first is “hope”. Where does one find hope?

    The Federal Reserve is about to sell more than $4 trillion in assets. These assets have been previously bought. The money from these sales is a windfall. I propose these be dedicated to pension resolution. This is part of my economic model and can work. There is insufficient money to make all pensions whole but with prudent reforms there is money to cure many ills; solutions without new taxes.”

    *************************************

    My thoughts ………..

    (1) Given the 1-st of those paragraphs, initially I thought “good”, he agrees (with me) that taxpayers should NOT pay the HUGE unfunded pension liabilities,

    (2) But then in the 3-rd paragraph he calls the $4 Trillion in treasury bond sales “a windfall”. WHOA………. no, it’s not and WINDFALL, it’s a LIABILITY of the US Gov’t, the principal and interest of which must be paid off by all of America’s Taxpayers . So I’m thinking, is he REALLY an “economist” or just some nut case?

    (3) Then he goes further in paragraph #3 to propose that the Treasury uses the $4 Trillion in bond sales to “resolve” our pension crisis. But would doing that not be a “bailout” of the now ludicrously excessive Public Sector pensions (via an increase in the national debt), with the Public Sector pension participants (15% of the workforce) being the winners and the other 85% of the workforce (Private Sector Taxpayers responsible to pay off 85% of that “loan”) being the losers ?

    ***************************

    What to think ????

    So I Googled “Timothy Alexander economist”.

    You don’t find the normal pedigree associated with recognized “Economists”…. a PHD for a respected institution, a tenured Professorship with a Top University, dozens (or hundreds) of scholarly-written research papers published in well-respected Professional Journals.

    Looks to me like his commentary is little but an advertisement for his Company posted prominently at the bottom of his post.

    Reply

    • Posted by Timothy J. Alexander on November 12, 2017 at 12:21 pm

      Thank you for your reply. I always welcome intelligent conversation. My career has been advising banks, for more than 30 years.
      If you read the partial balance sheet published by the Fed as of August 2016, you will note an interesting point.
      https://www.federalreserve.gov/monetarypolicy/bsd-overview-201708.htm
      The Fed lists $1.55 trillion of notes in circulation as a liability. This is inaccurate. Since going of the gold standard, our dollar is backed by the faith and integrity of the US Government. So the government has no obligation, from an accounting standpoint, to financially back these note, by any similar financial consideration. Thus, you can say the limited balance sheet does not balance.
      Remember, the securities have been paid for, and since purchase, some income has been derived, reducing the liability.
      I repeat two points; the securities have been paid for and the proceeds are a windfall, second, pensions nationwide, require reforms and capital, not loans. If we can bailout banks, I believe we should bail out pensions.

      Reply

      • Posted by Tough Love on November 12, 2017 at 9:47 pm

        Timothy J. Alexander,

        We’re going to have to agree-to disagree as to whether it’s a “windfall” or a “liability” . the principle and interest of which must be repaid.

        But regardless, what is the “justification” for making the pensions of Public Sector workers (that can easily be demonstrated to be 3 to 6 times greater in value upon retirement than those typically granted comparable Private Sector workers who retire at the SAME age, with the SAME pay, and the SAME years of service) whole, especially when PRIVATE Sector workers (with the FAR smaller pensions) are now responsible for 80% to 90% of the Total Cost of those MUCH richer PUBLIC Sector Plans. ?

        Reply

        • Posted by Timothy J. Alexander on November 12, 2017 at 11:16 pm

          I agree there are problems to be resolved and reforms necessary.
          The windfall I propose is just that, a windfall.
          Perhaps you could revisit the definition of assets and liabilities. The Federal Reserve is taking about selling their assets, not liabilities.
          Again, all I am saying is that we take the proceeds from an announced sale, and earmark for a purpose.
          I also know the pension crisis is both public and private. Look at the work the being done by the Pension Benefit Guaranty Corporation, and the dramatic shortfalls they document with private pensions.
          Please do not assume I am working for or taking sides pubic vs. private. This crisis is much bigger than that. We must recognize the scope of the problem and realize that both public and private pensions are failing.
          From your posts I get a sense that you are angry about what you perceive as, “fat public pensions”? It is possible there is “fat” in some. But I have relatives retiring from the Riverside School district and they will not have a lavish retirement.
          Where we seem to differ is that I do not see a blanket of pensions, public or private, as complete greed. Yes, there is probably some, but I will not say all.
          Also, let me repeat that I do also say reforms are part of my plan. Using the proceeds of the Federal Reserve sale after prudent reforms are in place.
          Thank you again for your ongoing dialog. Please feel free to call.
          Tim Alexander
          805-402-4943

          Reply

  4. Posted by George on November 11, 2017 at 5:45 pm

    I am an economist and I offer solutions. I start with two words. The first is “hope”. Where does one find hope? …

    Jesus, The Torah, The Koran, The Bhagavad Gita, Batman?

    No!

    The Federal Reserve is about to sell more than $4 trillion in assets. Yeah!!!!! We saved.

    If you are a quibbler, according to Wikipedia: “The federal government receives all the system’s annual profits, after a statutory dividend of 6% on member banks’ capital investment is paid, and an account surplus is maintained. In 2015, the Federal Reserve made a profit of $100.2 billion and transferred $97.7 billion to the U.S. Treasury.”

    So if you are one of those quibbler people the assets you are planning to pledge to retired NJ teachers are technically owned by member banks or the Federal Government or somebody. The ‘owners’ of the Fed System might have the cheek to object to your plan to give their stuff away to retired teachers.

    Worth noting is that beyond the dividend to member banks (which is sacred) the Federal government gets all the profits. Which is to say those Senators and Representatives we hear so much about could just vote to have all the money the Federal Government receives from the Federal Reserve be distributed to the states pension schemes, instead of to wherever it goes now. So far I have not heard of any Distribute the Fed’s Profits to State Retirees act, but I will now be watching for it.

    Another quibble or perhaps conspiracy theory is the perennial failure of attempts to audit the Federal Reserve system. For example, Ron Paul’s Audit the Fed bill. Now I am sure that everything is just dandy at the Fed but since the Fed is not audited in a transparent way, one never knows if there is $4 Trillion of assets. Just a quibble you see. (BTW, the gold in Fort Knox is also unaudited but who cares)

    Were the assets of the Fed to be given to an underfunded retirement system let me suggest that retirement system be the Social Security Administration and other Federal Pension schemes.

    Reply

    • Posted by Timothy J. Alexander on November 12, 2017 at 1:01 pm

      George-thank you for writing. I agree with much of what you say. Member banks (not all banks are) must maintain balances with the Fed. Currently the Fed is paying a rate on these deposits.
      You also correctly cite the Fed remits most of their profits to the government. I am simply saying we earmark these funds. If not, you can bet, Congress will waste the proceeds of the sale.
      I agree that Social Security and other pensions need immediate help.
      But where do we define the threshold? Is it Social Security only? There is more than enough money? Do we expand the limit to include public pensions with reasonable reforms? The University of Stanford, with Professor Nation is doing excellent research and has important recommendations.
      Are you aware of the Centrals States Pension plight? Please look it up. Remember there were many members of Congress singing the praises of sub-prime loans, even when reports began surfacing about problems and abuses. So now we have a chick or the egg conundrum. Do we blame pensions for making bad investments, or blame Congressional leaders for saying; “buy, these are safe!”?
      I have no info on how Central States Pension came close to operationally defunct, but I hear the pleas of retirees facing eviction and hunger.
      The Federal Reserve, both Board and Banks, are audited. You can find them on line. I also agree with Ron Paul that much more transparency is needed.
      If you are not willing to look to Jesus, The Torah, The Koran, The Bhagavad Gita, or even Batman for compassion, then where do you turn?
      Even the Fed trillions will not restore to par, all pensions, but with prudent reforms, such as proposed by Stanford, neither my parents, nor yours will go hungry.
      I welcome intelligent conversation, please feel free to call.

      Reply

      • Posted by George on November 13, 2017 at 12:57 pm

        Is it Social Security only?

        My quibble with the Central Banks will print money type arguments are:
        1) Central Banks are often constituted as nongovernment and even private institutions that have ‘owners’. So potentially the owners might complain about the scheme.

        2) To the extent that Central Banks are controlled by the government the value and income of Central Bank assets are already allocated to government activity. This is the same with the NJ lottery, whose profits are already allocated and cannot be simply assigned to the NJEA.

        My guess is if Fed Gov gets ahold of Central Bank assets, they spend the money on pre-existing federal priorities. Ohio Teamster pensions are not such a priority. NJ teachers pensions, maybe.

        3) Who really knows what the fed owns?

        Off topic but, GE stock seems to be breaking down on dividend worries. GE is widely owned by Broad US indexes and pensions. When GE sends out dividends in the near future, expect there to be 50% less in the envelope. It will be interesting to see how hedged NJ’s pension funds really are.

        Reply

  5. Posted by Anonymous on November 11, 2017 at 8:19 pm

    So do we keep printing money at the economic expense of a devaluing dollar to fund the pay as you go Federal pensions? And is it OK to deficit fund, predominantly for the top 1%, tax cuts that anyone with a working brain knows barely, if at all, trickles down to the 99%? Deflection, no. It’s all part of the broader discussion of ongoing policy choices and decisions.

    Reply

    • Posted by Timothy J. Alexander on November 12, 2017 at 2:08 pm

      Good morning Anonymous:
      It is true the method of dealing with our recent depression, was to “spend our way out”. This was done mostly by the Federal Reserve buying just about every kind of security it could, from GM stock, to T-Bills.
      There is evidence we are in, what economists call, a “classic liquidity trap”. This means we have way too much money now, and we need less, not more. I know this sounds odd, particularly to non-economists or non-financial professionals, but please allow me a moment to explain.
      Each quarter, all banks nationwide submit a standard financial statement known as a “Call Report. These can be studied independently for a single bank, or collectively for all banks. This is the primary source of banking data for researchers. Please look at this link.
      https://cdr.ffiec.gov/public/
      Before we discuss “printing more money”, perhaps we can take a factual look at banking financial data. Again, I am quoting banking Call Report Data, which can be verified. I will compare balance sheet data for all banks, nationwide, on the date of December 31, 2009 vs. December 31, 2016. Over this time, we lost about 26% of the banks due to failures and mergers.
      Total banking assets grew about 28% or $3.7 trillion, from about $13.1 to about $16.8 trillion. At the same dates, net loans and leases grew 30% or $2.1 trillion, from $7.1 to $9.2 trillion dollars. This tells us that over the date range, more than half of all bank assets are other than loans.
      The single largest loan category is real estate loans; $4.5 trillion or 63% of net loans and leases in 2009. By 2016 real estate loans are $4.6 trillion or 50% of net loans and leases. Dodd Frank increased the difficulty of new mortgages, and banks need an alternative means to generate new loans. The fastest growing by percent and dollars is the business loan category. This grew almost 60%, almost three quarter of a trillion dollars and the pace of growth increases in 2017.
      Now here is the problem. Deposits are liability to banks; depositors expect they can get money back when desired. Banks pay interests on deposits, small interest, but it is something. Banks must generate new loans, to cover expenses, including, interest on deposits. While total assets grew by 28%, and net loans grew by 30%, total deposits grew by 40% or $3.7 trillion dollars. The rate of percentage and dollar growth in deposits is much greater than growth in loans and assets.
      This is one of the most telling proofs of a classic liquidity trap. We have too much money now, much more than we can use. Printing more will exponentially exacerbate our problems.
      Do you realize that if we, Americans, take just five percent of our collective savings, in round numbers, about $450 billion dollars, we could repave every road in America. America fought WW II with savings bonds. Why not a “Repave American Roads” bond?
      You are right there are important and larger policy decisions that need to be made. I can substantiate the ultimate cause of our depression was due to monetary policy mismanagement by the Fed. Our economic policies and theories have not kept pace with the evolution of our economy.
      We need new economic theories, driven by modern economic understanding, related to the US now being a consumer economy. These are important points you make, including the proposed tax breaks. But the topic is pensions. Circling back, we cannot spend our way out as we did with the banking crisis, nor need we. I simply say take what is already owned, the Federal Reserve Securities, about to be sold, and dedicate this as part of a universal pension reform and recapitalization.
      Please call if you would like to speak.

      Reply

  6. Posted by Tough Love on November 11, 2017 at 11:17 pm

    We likely WILL need to “borrow” to pay Federal DB pensions, but we DON’T need to do so for the now ludicrously excessive, unnecessary, unfair to taxpayers, and clearly unaffordable STATE & LOCAL pensions.

    We only need to affirmatively* chop them down (by 50% to 75%) to grant Public Sector worker pensions no greater in value than those typically granted comparably-situated (in wages, age upon retirement, and years of service) Private Sector workers.

    * With ZERO “negotiation” with the insatiably greedy Unions.

    Reply

    • Posted by Timothy J. Alexander on November 12, 2017 at 2:10 pm

      I am unclear, please help me to understand. Based on what I see, I understand that reform is needed. But are you saying we let pensions fail? Please feel free to call and further explain.
      Tim Alexander
      805-402-4943

      Reply

      • Posted by Tough Love on November 12, 2017 at 9:55 pm

        Why SHOULD we (Private Sector taxpayers) fully fund Public Sector pensions (multiples richer than those granted comparably situated private Sector workers) when the granting of those ludicrously excessive pensions was CLEARLY a result of collusion between the Public Sector Unions and our self-interested Elected Officials, with the former BUYING the favorable votes of the latter with campaign contributors and election support.

        I don’t consider the refusal of Taxpayers to do so (i,e fully fund the Plans) and any resultant reduction in pensions a “failure”, but an eminently justifiable reduction.

        Reply

  7. Posted by Earth on November 11, 2017 at 11:34 pm

    Earth to Timothy Alexander:

    LOL!

    Reply

  8. Posted by Timothy J. Alexander on November 12, 2017 at 2:13 pm

    Earth-I am always glad I can cause a laugh, please let me know the funny bit?
    Tim Alexander
    805-402-4943

    Reply

    • Posted by Anonymous on November 12, 2017 at 2:38 pm

      TJA you do get it don’t you, TL and their elite followers don’t want open conversation nor compromise solutions but blood from your stone!

      Reply

    • Posted by Earth on November 12, 2017 at 4:51 pm

      Tim Alexander,

      If you have been reading this blog, and others, for long, you know there are not only very diverse and angry comments, there are also already more than a few proposals to solve. Like yours, none of them are politically feasible.

      Public pensions and private pensions are different. If roughly 85% of American workers are in the private sector, and 85% of those private workers have no defined benefit, that’s a lot of folks wondering why they should pay for someone else something they will never have. They are already on the hook for needs based programs.

      There “might” be empathy for some of the private pensions, but it is partially checked because it might set a precedent for bailing out public pensions, which most people are vehemently opposed to.

      From a personal standpoint, most voters would ask, “If there is essentially free money, a “windfall”, why should it go to those who have pensions. (Almost everyone is affected by Social Security, if anything, let it go there.)

      California has had a lot of fool governor’s. Davis’ biggest fault was timing, dot com bust and energy de-regulation, and he was replaced by possibly the biggest fool of all. Meh. We could have had Larry Flynt.

      LOL

      Reply

      • Posted by Timothy J. Alexander on November 12, 2017 at 8:39 pm

        Earth-you are correct. Public and private pensions are very different. I have senior citizens in my trash now, looking for food.
        I am a classically trained economist. I will stack my theory with anyone anytime. But my heart melts when I see these people that have tried to be good citizens their entire life. I find that not only my heart, but my theory freezes when I go and speak with these hungry senior citizens. When I consider the scope and universal failure of pensions, public and private, I say that in America, we can do better.
        There is sufficient funds to stabilize social security, and pensions nationwide.
        So I pose a question, If your brother is in need, and within your ability to help, should we? It has been a long and difficult journey for me to conclude, yes.
        This is why I say a combination of new funds and, prudent reforms.
        You are welcome to call
        Tim Alexander
        805-402-4943

        Reply

  9. Posted by Anonymous on November 12, 2017 at 8:18 pm

    “I have no info on how Central States Pension came close to operationally defunct, but I hear the pleas of retirees facing eviction and hunger.”

    Better find out before any attempt at bailout. Find it and fix it as a condition of bailout.

    Reply

    • Posted by Timothy J. Alexander on November 12, 2017 at 8:28 pm

      Thank you, I am in complete agreement. I am not calling for a blanket “free giving of money”. I am calling for prudent reforms, as well. I simply cite that as one example, Look at the private pensions in PA, east coast coal miners, etc.
      I do know that some Congressional leaders were encouraging investment in “dubious securities”, that eventually crashed. This is part of my justification for the need of a national reply or solution.
      One element is very clear. The potential impact on the economy from twenty, forty million, and more pensioners possibly loosing half of their pension is more crippling than our recent banking crisis.
      Always nice speaking with an intelligent and informed person capable of asking good questions. Feel free to call.
      Tim
      805-402-4943

      Reply

  10. Posted by Anonymous on November 12, 2017 at 10:06 pm

    “The potential impact on the economy from twenty, forty million, and more pensioners possibly loosing half of their pension is more crippling than our recent banking crisis.”

    No doubt. Many people don’t see the greater advantage to society as a whole when other people’s retirement is secure.

    “A new national economic impact study finds that the benefits provided by state and local government pension plans have a significant economic footprint: 2.5 million American jobs and $358 billion in economic impact.”
    (Pensionomics: Measuring the Economic Impact of State & Local Pension Plans NIRS 2009)

    And yet, others say, those dollars would have the same multiplier effect if they were spent by the taxpayer who earned them, instead of cycling them through the grubby hands of the greedy pensioners, who virtually stole them through the incestuous cabal with elected government officials.

    “Hope” comes at a price, and “rejoice” is an uphill climb.

    If you follow this blog, do you also follow Leo Kolivakis? He is a supporter of DB pensions, but pragmatic about it.

    http://pensionpulse.blogspot.com/2017/11/the-mother-of-all-us-pension-bailouts.html

    To rephrase Donald President Trump, “Nobody knew pensions could be so complicated.”

    Reply

    • Posted by Tough Love on November 12, 2017 at 10:30 pm

      Quoting ………….

      ““The potential impact on the economy from twenty, forty million, and more pensioners possibly loosing half of their pension is more crippling than our recent banking crisis.””:

      Absolute NONSENSE. It’s a ZERO-sum game.

      Quoting …………

      “No doubt. Many people don’t see the greater advantage to society as a whole when other people’s retirement is secure.”

      “greater advantage to society” my foot ……….. it’s self-interest, plain and simple.

      For every Additional $1 the Public Sector workers get to spend, it’s $1 take AWAY from Taxpayers that THEY cannot spend…… and would spend if not taken from them.

      Quoting ……….

      “And yet, others say, those dollars would have the same multiplier effect if they were spent by the taxpayer who earned them, instead of cycling them through the grubby hands of the greedy pensioners, who virtually stole them through the incestuous cabal with elected government officials. ”

      Yes, “others” say that ….because it is TRUE !

      Reply

  11. Posted by S Moderation on November 13, 2017 at 11:14 am

    You don’t have to agree that DB pensions help fuel the economy, but at least give it a read.

    http://pensionpulse.blogspot.com/2013/10/new-study-on-benefits-of-db-pensions.html

    Reply

    • Posted by Tough Love on November 13, 2017 at 12:40 pm

      It’s NOT that the money Public Sector retirees spend doesn’t “fuel the economy”, but that the SAME amount of “fuel” would be provided by each dollar that stayed in the Taxpayers’ pockets to spend (instead of contributing it to fund excessive Public Sector pensions & benefits).

      Reply

  12. Posted by S Moderation on November 13, 2017 at 1:17 pm

    May be.

    For a couple of years we lived a block away from a Mom and Pop grocery store. The whole family worked long and hard to make a living. (They weren’t scraping by, by the way. The business was very lucrative.) Talking to the owner one day, he mentioned how hard his family worked, and how most of his customers were on welfare or Social Security. Taxpayer money.

    I asked him if they shut down welfare tomorrow, what would happen to his business? Crickets. (Many people on welfare/food stamps/housing subsidies ARE working full time jobs.)

    Social Security and welfare (and pensions) provide a buffering effect during slow business cycles and high unemployment. Without these regular payments, recessions would spiral much lower, with everyone hoarding their money.

    DB pensions…

    “they actually provide predictable monthly benefit on retirement based on the employee’s earnings, years of service and age. This way people don’t have to worry about the wolf market, the scars of 2008 or the new pension poverty. They can enjoy retiring in dignity and security, spending money, contributing to economic activity.”

    (L Kolivakis)

    And it’s money they earned, not a gift from the government.

    Reply

    • Posted by Tough Love on November 13, 2017 at 2:26 pm

      Quoting ………..”DB pensions… “they actually provide predictable monthly benefit on retirement based on the employee’s earnings, years of service and age. This way people don’t have to worry about the wolf market, the scars of 2008 or the new pension poverty. They can enjoy retiring in dignity and security, spending money, contributing to economic activity.””

      True, but that has absolutely NOTING to do with the last thread …… i.e., your ABSURD position that …” DB pensions help fuel the economy” …. because it would exist in the SAME amount if the money to fund those excessive pensions stayed in the Taxpayers’ pockets.

      Reply

      • Posted by S Moderation on November 13, 2017 at 4:05 pm

        “absolutely NOTING to do with the last thread”?

        It’s all in the timing. Recession hits, people are laid off (or fear being laid off), they cut back on discretionary spending, maybe even dip into savings, and eventually into IRAs and 401(k)s. That drives unemployment even higher, and also reduces their retirement security. It’s a vicious circle. Even visciouser (yourdictionary dot com) If not for those wise and noble pensioners who are able to continue “spending money, contributing to economic activity.” In the best of times, in the worst of times.

        also, for lifetime incomes, see Milton Friedman’s Smoothing Consumption and Peak Earnings…

        “Another way to look at it is that a person is going to earn a certain amount of money in his lifetime. The idea is to smooth the spending over a career based off of these expectations, as opposed to bouncing wildly around as raises and salary increases come.”

        ” Thus, precautions are made so that the near-retiree’s lifestyle does not change too much the day he retires.”

        What better than a DB pension to smooth income over one’s lifetime? Deferred compensation, receiving less during working years in order to get a comfortable income in retirement. Plus the obvious advantage of pooling longevity risk and pooling asset risk.

        A win/win if I ever saw one.

        SMH

        Reply

        • Posted by Tough Love on November 13, 2017 at 6:07 pm

          All nonsense, all irrelevant, and just MORE of your “entitlement mentality” that Public Sector workers are ‘”special” and deserving of a better deal ……. on the Taxpayers’ Dime.

          No, they’re NOT.

          Reply

        • Posted by Tough Love on November 13, 2017 at 7:29 pm

          SM-Whatever ……..

          Quoting ……………….

          “What better than a DB pension to smooth income over one’s lifetime? Deferred compensation, receiving less during working years in order to get a comfortable income in retirement. Plus the obvious advantage of pooling longevity risk and pooling asset risk. A win/win if I ever saw one.”
          ***********************************************************

          Simply “smoothing” an EQUAL amount of Total Lifetime Compensation EQUAL in amount to that typically granted their Private Sector counterpart would be fair (but still problematic because our self-interested/dumb-ass politicians STILL wouldn’t properly fund it over the working careers of the employees), but that’s certainly NOT the compensation structure we have today.

          Didn’t we just go through this exercise with the NJ Local Policeman? That Policeman’s Lifetime Compensation came out to 1.76 times that of his/her comparably situated Private Sector counterpart.

          That’s NOT “smoothing”. It’s much much much MORE actual compensation $$$$ than necessary, fair to taxpayers, or affordable……… and ludicrously excessive.

          Reply

          • Posted by S Moderation on November 13, 2017 at 8:21 pm

            Did we not go through this a year ago with NJ state truck drivers compared to NJ Teamster drivers?

            Seriously? $4,200 a month at any age with 35 years service for teamsters?

            All pensions are unequal, but some are more unequal than others.

          • Posted by Tough Love on November 13, 2017 at 9:45 pm

            Again, back to the Private-Sector multi employer Union worker, a group that I clearly stated that I was NOT familiar with (their pay, pensions, or benefits),

            So ….. what about the overcompensated NJ Local Police Officer? Nothing to say? Tongue tied ?

          • Posted by S Moderation on November 13, 2017 at 11:46 pm

            Hubris, thy name is Tough Love.

            Because you were “NOT familiar with (their pay, pensions, or benefits)” they don’t count?

            Over the years, it turns out, there is a lot that you are not familiar with. Never seemed to stop you from offering an “opinion”.

            Often in error, never in doubt.

            Sorry, Mr. Love. Your police fallacy is still GIGO. The logic is still warped. Please contact one of your precious PhDs with the appropriate curriculum vitae to confirm or refute your “demonstration”.

            “While we’re waiting”…

            SMH

          • Posted by Tough Love on November 14, 2017 at 12:28 am

            SM-Whatever,

            STILL can’t (or WON’T) answer ………….

            What about the overcompensated NJ Local Police Officer? Nothing to say? Tongue tied ?

            1.76 TIMES the compensation of the comparably situated Private Sector worker, and that 1.76 TIMES as much is for his/her LIFETIME ……. 25 years working career PLUS and estimated 30 years in retirement….. 55 YEARS of 1.76 TIMES as much.

            Go ahead, tell us WHY that’s supposed to be necessary, fair to Taxpayer, or “affordable”…………. and NOT “ludicrous”.

          • Posted by S Moderation on November 14, 2017 at 12:44 am

            Sorry, Mr. Love. Your police fallacy is still GIGO. The logic is still warped. Please contact one of your precious PhDs with the appropriate curriculum vitae to confirm or refute your “demonstration”.

          • Posted by Anonymous on November 14, 2017 at 1:40 pm

            Moderation-that is a great screen name; like a mantra anybody could use.
            Does it make sense to spar with a volcano, trying to land a “right hook” of unfettered insight? You are better than that.
            I would agree that some truth, in tough love, may be found; “Plus the obvious advantage of pooling longevity risk and pooling asset risk.” But I also reflect on the words of Sherlock Holmes; “I do not dispute your facts, only your erroneous, misguided conclusion.” What is omitted, or lacking in tough love, is fatal.
            Remember, Moderation, that rates are key. If you pay into a fund for thirty years or so, with no interest, you may be lucky to get up to a seven-year retirement (just an illustrative guess). The only way to achieve the lifestyle and longevity desired, is to make interest on your retirement fund. The key is how much is needed, and where to find needed rates? This is where a spewing volcano flames out quickly.
            Consider for a moment, paragraph four, page seven of the 2016 annual CALSTRS report. I choose this as it is simply available data. “This fiscal year’s investment returns of 1.4 percent (net) continued to dip below the actuarially assumed rate of 7.5 percent (net) and emphasize the ongoing importance of implementing risk mitigation strategies within the portfolio.”.
            Do you see the fund needs are a goal of 7.5%, but made just 1.4%? Dismal! Do you truly understand the significance of this? Compound interest work both way. The loss of a 6.4% spread in just a single year, over $215 billion dollars investment portfolio, could take decades to recover.
            Some pensions may offer prudent benefits and others may have exaggerated benefits. I choose to table this discussion for a moment, and simply look at the global financial status, dreadful.
            Moderation, pick a date, today, yesterday, last year, and you may find three groups of rates, low medium, and elevated. Research these rates. Also remember that perceived risk of repayment is directly related to rates. FDIC insured savings accounts may currently pay 1.3% or so, a one year CD about 1.6 or a bit more. These are examples of the safest, and lowest yielding rates.
            Next consider T-bills, current one year rates are in line with savings accounts. You must go to a ten-year T-bill to find a moderate rate of about 2.3%.
            Finally consider top performing stock mutual funds; the Fidelity OTC Portfolio claims a 39% one year return, then a 10 year return of 11.3%. Do you feel safe in a stock fund? I had family wiped out by Bear and Lehman, etc.
            There is considerable, conjecture that we may be near a zenith of a long running bull market. These funds could come down hard. Do you want to be in a stock fund?
            The volcano states that parties pool risk and assets for mutual benefit. But is this not what coal miners, set dressers, truck drivers, and teachers do? Pool together for mutual benefit?
            If you have hundreds of billions to invest, how do you place this in risk, high yielding funds barely at ten billion in assets? Do not fall for the trap, of “too big”. Too big is a catch phrase for unenlightened and unimaginative. Is the endless wonder of space “too big”; is America “too big”, no, and neither are any pensions. We just need a new paradigm of rate management, and reforms.
            Moderation-why waste your time sparing with a volcano, you are better than that. All a volcano does is stink a room with hot gas and cloud a beautiful sky.
            Finally, I disagree with your new statement of all money is fungible. If this were true how would you explain arbitrage in exchange rates? It is my opinion we left fungible when we left the gold standard. (best decision ever). Remember that from 2010 to 2016, the Federal reserve made about $609 billion in income, and sent to Treasury. Can you tell me where this money went? This was the proceeds of investments.
            You are right the government belongs to the taxpayers, and so does the windfall. Suppose the Fed sells assets it owns and makes about a $2 trillion profit. What happens? Do we trust Congress to make the best use? Do we refund about $6.6K to 300 million tax payers? Why not invest in the future of tax payers? Does the taxpayer want to take his money today, and run, or make an investment in the same taxpayers tomorrow? My model is to still benefit taxpayers, just invest in tomorrow.
            My name is Tim Alexander. I am an economist. This is a problem that can be solved. I need your help to do this. Please call.
            Tim Alexander
            805-402-4943
            tim@triunegfs.com

          • Posted by Tough Love on November 14, 2017 at 1:34 am

            Sorry SM-Whatever, you don’t get off that easy.

            The logic is presented as well as all the details yielding the 1.76 TIMES/ Feel free to challenge/question each and every assumption or anything else. Be SPECIFIC, ……….. TELL US…………what’s GIGO (besides your greed and entitlement mentality).

            To REPEAT…………

            NJ Local Police LIFETIME COMPENSATION (the ratio YOU demanded we discuss instead of the 4,01 times Police/Private Sector ratio of pensions alone) is 1.76 TIMES the compensation of the comparably situated Private Sector worker, and that1.76 TIMES as much is for his/her LIFETIME ……. 25 years working career PLUS and estimated 30 years in retirement….. 55 YEARS of 1.76 TIMES as much..

          • Posted by S Moderation on November 14, 2017 at 2:08 am

            “Comparably situated” by your definition only.

            Show

            Me

            The

            Data.

            Send your “demonstration” to a qualified actuary or accountant for verification, then get back to us. You have an unnatural obsession with Bergen County LEOs.

            Also, in your 9:40 pm post, “blunt” should be “rude”, n’est-ce pas?

            SMH

          • Posted by Tough Love on November 14, 2017 at 2:41 am

            Yes SM-Whatever,

            “Comparably situated”, meaning that for calculation purposes the Local NJ Police Officer and the Private Sector worker received the SAME wages, and both retired at age 55 with 25 years if service.

            The latter 2 “assumptions” are NECESSARY to make an apples-to apples pension calculation, and the 1-st assumption (that they both had the SAME wages) is if anything likely OVERSTATING the Private Sector workers’ wages because with education, experience, skills and knowledge comparable to that of a Police Officer, RARELY would such a Private Sector worker be earning $135K after only 5 years (a not unusual wage for NJ Police Officers today).

            1.76 TIMES the compensation for 55 years

            or (what REALLY happens)

            Equal Compensation for the 25 working years, and then the Police Officer gets a pension & benefits 4+ times greater in value upon retirement.

            Not GIGO… just reality, and a monumental RIPOFF of NJ’s Private Sector Taxpayers.

          • Posted by Tough Love on November 14, 2017 at 4:27 am

            SM-Whatever,

            And …..given you are a retired CALIFORNIA Public Sector worker……. why does it “bother” you so much that I am rightfully exposing a HUGE ripoff of NJ’s Private Sector Taxpayers via the ludicrously excessive pension & benefits promised it’s Local Police Officers?

            And responding to you last comment, it’s NOT just our Local Police, it’s ALL of NJ’s State & Local Public Sector workers. It’s just that the financial ripoff by the Police is the greatest* because they get the richest pensions and begin collecting their pensions and retiree healthcare benefits at such a young age.
            ————————————-
            * perhaps excluding Judges, which due to their low headcount is of smaller financial consequence.

          • Posted by S Moderation on November 14, 2017 at 5:05 am

            ” While we’re waiting “…….

            “Of the actuaries and accountants who must read this blog, I can remember no one defending your math. Maybe this is the time for them to come to your rescue, for the sake of truth, which there seems to be so little of in public pensions.”
            ( PatB)

            Or, you could just keep repeating yourself.

          • Posted by Tough Love on November 14, 2017 at 12:53 pm

            SM-Whatever,

            Criticism/questions are encouraged …,,,,as I have stated before.

            But please, from someone without an “agenda”, and more grey-matter than a light-bulb-changer.

          • Posted by S Moderation on November 14, 2017 at 3:41 pm

            Question… “Mr. Love, What are your credentials? 

            Answer… “None of your business”

            Fair enough. I believe you have implied you were employed in the financial industry somehow.
            For all we know (or care), you might be employed in the financial industry, in the capacity of janitor. Fifteen dollars an hour and complimentary computer access.

            Not that there’s anything wrong with that. With a little training, you, too could be a light-bulb-changer.

          • Posted by Tough Love on November 14, 2017 at 4:08 pm

            Yes, my work-history is in Financial Services … in a position that would without question be considered a “Professional”. …. no janitorial or light-bulb changing responsibilities on my resume ………… not that there’s anything wrong with being a Public Sector janitor or light-bulb-changer unless you believe that being such makes you an authority on the many complicated nuances of Public Sector pension funding and design.

          • Posted by Tough Love on November 14, 2017 at 7:55 pm

            Timothy J. Alexander,

            I read you long post above. My thoughts follow, but as an aside, even if you are writing in say WORD and then pasting it on BURY, you might consider putting any lost paragraph-breaks back in.

            (1) Quoting …… “What is omitted, or lacking in tough love, is fatal.” I’m assuming that refers to my commentary and is not a personal attack. If so, how about telling me what you believe is omitted or lacking, and we can debate that.

            (2) Quoting ……….. “Some pensions may offer prudent benefits and others may have exaggerated benefits. I choose to table this discussion for a moment…..,” and later ….. ” Is the endless wonder of space “too big”; is America “too big”, no, and neither are any pensions.”

            Which pensions were you referring to when you stated that pensions are not “too big”, and to what are you comparing them to conclude that they are not too big ? ALL DB pensions? Public Sector pensions? Private Sector pensions? I have demonstrated numerous times (with details/formulas/assumptions shown) that Public Sector pensions are ROUTINELY 2, 4, even 6 times (for Safety workers with COLA-increased pensions) greater in value upon retirement than those typically granted (comparably experienced, educated, skilled, and knowledgeable) private Sector workers who retire at the SAME age, with the SAME wages, and the SAME years of service.

            Why NOT address that? Isn’t the now multiples-greater Public (than comparable Private) Sector pensions & benefits a HUGE injustice to Taxpayers now called upon to pay for all but the 10% to 20% of Total Plan costs now paid for with the employees’ own contributions (INCLUDING all the investment earnings thereon)? And isn’t THAT the ROOT CAUSE of the pension mess infecting Americas States & Cities ….. grossly excessive “generosity”? Seems like your AVOIDING discussing what is the MOST IMPORTANT issue that needs to be addressed.

            (3) Quoting …….. “You are right the government belongs to the taxpayers, and so does the windfall. Suppose the Fed sells assets it owns and makes about a $2 trillion profit. What happens? Do we trust Congress to make the best use? Do we refund about $6.6K to 300 million tax payers? Why not invest in the future of tax payers? Does the taxpayer want to take his money today, and run, or make an investment in the same taxpayers tomorrow? My model is to still benefit taxpayers, just invest in tomorrow.”

            Here we agree, as long as “belonging to the Taxpayers” and “invest in the future of tax payers” means ALL Taxpayers, not just Public Sector workers.

    • Posted by Anonymous on November 13, 2017 at 2:57 pm

      S Moderation-Very well said. What I think it comes down to is can we proved from out excess.

      Reply

    • SMD,, what you say may be true that pensions, welfare, SS, etc help in down times, but come on nobody but nobody in this day and age should be able to retire at 55-58 years of age except cops and firefighters who work in the worst inner cities. If one chooses to retire before SS age then no pension until age 65 and pay for your own healthcare…..

      Reply

      • Posted by Tough Love on November 14, 2017 at 12:11 pm

        Well said………… but with pensions that start at age 65 EQUAL in generosity to those typically granted Private Sector workers by their employers.

        The VERY material overcompensation of Public Sector workers (via ludicrously excessive pensions and benefits) must end.

        Reply

      • Posted by S Moderation on November 14, 2017 at 12:30 pm

        I’ve heard that before. Cops and firefighters (and NYC sanitation workers) can often retire after 20 years with half pay (and health care for life). Also the U.S. military.

        “Retiring” at age forty +/- makes it relatively feasible to begin a second career. Finding a new career at 55-58 would be much more difficult, I would think. Either way, the early retirement keeps the average age lower, which I think is the goal. It’s a “young man’s job”, except for those who have the desire and ability to promote to management or technical jobs.

        55-58 is not that young. According to Gallup, the average age of retirement for ALL American workers has been about 60 for the last decade or more. It was lower than that in the 1990s. It has increased in the last 5 years or so due mainly to the Great Recession.
        ====================
        “no pension until age 65 and pay for your own healthcare…”?

        I’m not a safety (or sanitation) worker, but I don’t see that happening. Even many of the most ardent pension reformers seem to carve out police from “the rest of us”, by retaining DB pensions for them while demanding DC pensions for all others. As a rule, I think, in recognition of the earlier retirement, safety workers often contribute a higher percentage of pay than non-safety workers. And one of the current trends is to increase those contributions even further.

        Just so you’ll know, if the “average” retirement age for all workers in California is 64, there are already a lot of workers retiring at 55-58, not just safety workers.

        https://www.google.com/search?q=average+retirement+age+by+state&oq=average+retirement+age+by+state&aqs=chrome..69i57j0l3.24232j1j7&client=tablet-android-google&sourceid=chrome-mobile&ie=UTF-8#imgrc=e4_7mjlKiTMxbM:

        Reply

        • Posted by Tough Love on November 14, 2017 at 2:09 pm

          Quoting …..

          “As a rule, I think, in recognition of the earlier retirement, safety workers often contribute a higher percentage of pay than non-safety workers”

          Yes they do, historically, Safety-workers contribute about 3% of pay more than non-safety.

          And for that extra 3% of pay they TYPICALLY get a pension with an INCREMENTAL (i.e., ADDITIONAL) value upon retirement that has a level annual incremental cost of about 20% of pay.

          Their greater contribution pays for a very SMALL share of their MUCH higher pensions, and the Taxpayers are just being suckered to a much GREATER extent for Safety than for non-Safety workers.

          Reply

          • Posted by S Moderation on November 14, 2017 at 4:02 pm

            “historically” ?

            “TYPICALLY” ?

            Money is still fungible, what difference if a cop in California’s Central Valley makes $80,000 a year and contributes $8,000, or he makes $72,000 and the employer contributes both employer and employee shares?

            It’s complicated. We’re it simple, even a janitor could do it.

            SMH

          • Posted by S Moderation on November 14, 2017 at 4:16 pm

            Which is yet another reason, by the way, that…

            “You cannot compare pensions outside the context of total compensation.”

          • Posted by Tough Love on November 14, 2017 at 4:17 pm

            No it’s not complicated ……….. either way, it would all be counted in the Ratio of the Police Officers Lifetime Income (while work and while in retirement) to that of the comparably-situated Private Sector worker’s Lifetime income

            You know, like the one I demonstrated already …… showing a 1.76 Ratio for a NJ Local Police Officer vs the Private Sector worker.

          • Posted by Tough Love on November 14, 2017 at 4:21 pm

            Quoting SM-Whatever …………

            ““You cannot compare pensions outside the context of total compensation.””

            Yes, JUST like i did …… giving the Local NJ Police Office 1.76 times the compensation in each of the 55 years while working and in retirement.

            **************************************

            And now that that DIDN’T work out the way you wanted (because of the resultant 1.76 times multiple), what next in the SM-Whatever portfolio of BS ?

          • Posted by S Moderation on November 14, 2017 at 7:34 pm

            ” what next in the SM-Whatever portfolio…? ”

            DATA, Dude, data.

            Your demonstration contains data which may (may not) be true for the specific parameters you specified, but how on Earth did you arrive at an answer to two decimal places with data that was “TYPICAL” or “historical”? Or “the 10% to 20% of Total Pension Plan costs actually paid for by the Officer’s own pension contributions …”

            Your assumptions affect the outcome, as in working more than 25 years, or retiring at an age different than 55. What ages do NJ police actually retire, and with how many years service? And private sector pay? There was a discussion on Jack Dean’s Facebook page (Californians for Pension Reform) about transparency in public AND private salaries and benefits. People are stunned by the salaries listed on Transparent California for public workers. If TC were to collate the salaries of private sector workers into the list, sorted highest to lowest, the first public sector worker would be more than a hundred pages down. And many private workers would show much higher salaries than for similar public workers.

            Mary Pat Campbell…
            Transparent California has some nice records.

            John Mcxxx’s 2016 pension was $126K – he retired in 2007. I don’t know how many years of service he had.

            Jim Bxxxxx’s was $110K, and he also got a DROP payout of $19K when he retired. I don’t know what year he retired, but he had just over 37 years of service.

            David A. Hxxx has a pension of $104K for 32 years of service. Again, I don’t know when he retired.

            I’m not quoting these to get snippy about the $100K club – after all, I make more money than that and I don’t think that these are necessarily excessive amounts.

            If they were pre-paid for.
            =============================
            “In God we trust. All others must bring data.” – W. Edwards Deming,

            “All others must bring data, and logic.” S Moderation
            =============================
            ” after all, I make more money than that and I don’t think that these are necessarily excessive amounts.”

            Dot, dot, dot… “If they were pre-paid for.”

          • Posted by S Moderation on November 14, 2017 at 7:45 pm

            “John Mcxxx’s 2016 pension was $126K ”

            DANG!!!

            That’s more than I make in a month!!!

          • Posted by Tough Love on November 14, 2017 at 8:18 pm

            Quoting SM-Whatever…………

            “Or “the 10% to 20% of Total Pension Plan costs actually paid for by the Officer’s own pension contributions …””

            Yea, I demonstrated that too.

            Sometimes Elected Officials that support pension reform don’t do it correctly, but I do, adjusting for the time value of money.

            Gov. Christie, in one of his fights with a Teacher, claimed that she paid for only 3% or 5% (can’t remember which) of her pension. He did that by dividing the mathematical sum of all of her pension contributions by the mathematical sum of her expected pension payments (based on her life expectancy).

            That was wrong and materially understated the share of her pension that was paid for by her own contributions. Specifically, you need to use a common point in time for comparing contribution to the value of the pension, the logical point being the date of retirement. The employee contribution must be accumulated with an assumed (or actual, if available) investment return, and the stream of expected future pension payments must be discounted to the date of retirement.

            Had Christie done that, his 3% (or 5%) would have been about 15%. While it varies with Plan generosity and the %-of-pay employee contributions, in the employees typically pay for 10% to 20% of the total cost of their VERY generous pensions.

            And for what it’s worth, it VERY easy to set up an Excel Spreadsheet to do this using ACTUAL annual employee contributions, and assuming the Plan Participant will live to the year of average life expectancy.
            ************************************************************

            Quoting …………. “Your assumptions affect the outcome, as in working more than 25 years, or retiring at an age different than 55. ”

            Sure I could pick a different Service-duration/retirement-age combination, but it still must be the SAME for both the Public and Private Sector workers to make an apples-to-apples Public/Private Sector pension comparison.

        • Posted by S Moderation on November 14, 2017 at 7:47 pm

          “John Mcxxx’s 2016 pension was $126K ”

          DANG!!!

          That’s more than I make in a month!!!

          Reply

  13. Posted by Anonymous on November 13, 2017 at 2:58 pm

    Thought Love-Thank you again for your comments.
    From your tone, I note a rather hard, us/them position. As a young man, I saw the world in absolutes, yes and no, black and white, good and evil, etc.
    I was blessed with the opportunity to look out my window, free of preconceptions. Instead of talking down to my neighbor, I began to talk to, my neighbor. This was the start of my advanced education.
    I reflect on grey. Without it, how could we appreciate the genius of the works of Ansel Adams? Grey is necessary to life.
    May I make a suggestion. Take a moment, stop banging your fist, open your window, and look out. No matter where you live, every city, county, and state is affected; as are public and, private pensions.
    If I cannot sway you to simply look at your neighbor, and I cannot give you pause to reflect with an economic consequence of a pending disaster larger than the banking crisis, what then? My purpose in life is not to change any persons’ mind, but to encourage factual reflections, and, to propose working solutions.
    May I close with two questions, what is your pension and how do you know it is secure? My best estimate is that within about two years, without intervention, Social Security will have massive changes.

    Reply

    • Posted by Tough Love on November 13, 2017 at 7:06 pm

      I think you would have made a great Preacher. I’m so convinced as to an Economist.

      Unlike an Attorney (who need to pass a Bar Exam to be admitted to practice) or an Accountant that has the recognized CPA credential, or a Doctor who has to obtain an MD (or OD) degree and then pass a difficult Board examination, the term Economist is far more vague, and I’m sure some use it w/o substantive “credentials”.

      Would you please share with us your academic (not work-related) credentials. Do you have a PHD? If so, for what University. If not, what degree do you have and from what University?

      Do you currently teach at the University level? Are you a Tenured Professor, or simply and instructor or “adjunct”. At which University?

      Most established/recognized-as-such Economists have had many scholarly papers published in Professional journals ……. and freely make their bios available with a link to such papers. Please provide such.

      Thank you.

      Reply

    • Posted by Tough Love on November 13, 2017 at 7:40 pm

      Timothy J. Alexander,

      While we’re waiting for your academic credentials and listing of published papers, would you respond to the question I asked you in an earlier comment, specifically ………..

      “Why SHOULD we (Private Sector taxpayers) fully fund Public Sector pensions (multiples richer than those granted comparably situated private Sector workers) when the granting of those ludicrously excessive pensions was CLEARLY a result of collusion between the Public Sector Unions and our self-interested Elected Officials, with the former BUYING the favorable votes of the latter with campaign contributors and election support.

      I don’t consider the refusal of Taxpayers to do so (i,e fully fund the Plans) and any resultant reduction in pensions a “failure”, but an eminently justifiable reduction.”

      Reply

      • Posted by Anonymous on November 13, 2017 at 8:54 pm

        Tough Love-I am an economist, nothing more, if you find something other, perhaps your subconscious is illustrating an internal lack???
        You asked me questions, but I asked two first. Answer mine and I will answer yours.
        And enough of clogging this blog. You have my email and phone. Use either-I do not bite. It is about 6:00 pm in LA. I leave in about 45, then available tomorrow morning.

        Reply

        • Posted by Tough Love on November 13, 2017 at 9:40 pm

          Quoting …..

          “I am an economist, nothing more”

          To me, an Economist generally means someone with a PHD in Economics from a well-respected University with Dozens of papers published in Professional Journals.

          Saying that one is an Economist (w/o the above) doesn’t cut it.

          Yes, I’m blunt………. the result of reading TONS on Public Sector Union/workers BS….for 10+ years.

          Reply

  14. Posted by S Moderation on November 13, 2017 at 8:35 pm

    Mr. Love,

    What are your credentials? In what “profession” is it acceptable to incite citizens to abrogate lawful taxes on the unsubstantiated charge of collusion and/or the “opinion” that pensions are “ludicrously excessive”?

    Reply

  15. Posted by Anonymous on November 13, 2017 at 8:54 pm

    …and remember, I am not proposing using taxes. I wish people would leave taxes out of my work.

    Reply

    • Posted by S Moderation on November 14, 2017 at 1:12 pm

      That’s not going to happen, Mr. Alexander. All money is fungible, but any money the government has can only come from one place, ultimately… The taxpayer. If there is a windfall, it belongs to the taxpayer, to be refunded (LOL) or redirected to other government needs, not just pensioners.

      The line is long. One recurring theme I see in social media is “Not one thin dime to illegal immigrants until ALL homeless veterans are taken care off. And you could use the same sentence substituting any number of special interest groups. I don’t recall ever seeing pensioners, especially public pensioners, in the second half of that sentence.

      Reply

  16. Posted by Anonymous on November 14, 2017 at 11:28 pm

    Now that we have solved that, what’s the status on United Mineworkers Pension bailout? I get the feeling they would pass it in a New York minute, if it weren’t for the precedent it would set for the other multi-employer unions. And then Kentucky, then New Jersey, then Illinois. Like dominos.

    Reply

    • Posted by Tough Love on November 15, 2017 at 1:21 am

      I don’t believe they will give them much (if any) help on pensions. Healthcare is a bit different …… visions of people dying because of a lack of healthcare is not what Politicians want to see.

      Don’t fill the pensions and they eat hamburgers instead of Sirloin…. not big deal.

      Reply

  17. […] Alexander’s first blog here elicited 80 comments. Here is his second and the start of a […]

    Reply

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: