Retirement programs for former federal workers — civilian and military — are growing so fast they now face a multitrillion-dollar shortfall nearly as big as Social Security’s, a USA TODAY analysis shows.
The federal government hasn’t set aside money or created a revenue source similar to Social Security’s payroll tax to help pay for the benefits, so the retirement costs must be paid every year through taxes and borrowing.
But read the whole thing.
The “Greece” sickness is an epidemic?
Pensions need to be outlawed.
Astute Fed watchers have predicted for years that the first to have their pensions hit the deficit tank will be the public service, this is just the precursor to the tanking of the Ponzi scheme known as federal social security/old age pension.
When a government is so poorly run it defaults on what amounts to primary obligations of its social contract – just exactly what the frig good are they? Why keep ‘em? Defund THEIR pensions.
The problem with pensions is that government where never required to treat them the same way the private sector is. The reason pensions have all but died outside the public sector is that they are so expensive to fund that employers can’t pay the pension costs AND the wages.
I think we ought to cover the commitments of the past, but why they continue to grant them is beyond me.
I’d love to see any level of government demand that pensions be removed from future contracts, and should anyone strike, let them walk. A striking public sector union striking over pensions would get ZERO sympathy from the taxpayers.
Do you think Canadians would care if 100,000 bureaucrats walked for a year? If anything it would show Canadians how little they use the government and how useless the bloat is.
Pensions would be a perfect issue to push unions into their own demise. Demand removal of pensions, have the big strike, bring in right to work legislation and invite half the former union members who have missed a couple mortgage payments back to their jobs at 75% salary. 60%+ cost savings and a work force who wants to be there.
Don’t need to outlaw pensions, per se. Just outlaw unfunded pension plans. All pension plans should have a minimum 50% employee contribution, and the money has to be safely invested at market rates. Pension payouts to retirees should not necessarily be at fixed rates, but keyed pro-rata to their share of the fund and its present value.
If the market takes a dump while you are receiving your pension, your payments get cut. If it booms, they get increased.
Do you think Canadians would care if 100,000 bureaucrats walked for a year? If anything it would show Canadians how little they use the government and how useless the bloat is.
Posted by: duffman at October 4, 2011 2:34 PM
Yup, there are entire ministries and dep’ts that could/shopuld disappear overnight.
Ahh no worries.
Obamassiah is the smartest POTUS ever so he’ll figure a way out.
Because smart progressives know everything about everything.
Especially economics.
What killed pensions, besides mismanagement, is the near-zero interest rates of the last 12 years or so.
Back in the 50s and 60s it was straightforward to save for your retirement, even if you did not have a defined benefit plan. All you had to do is start saving young.
With ZIRP there is no way saving 5% of your income will generate enough capital to live on for possibly 20 years. That’s why the whole pension scheme is falling apart.
Retirement is a recent concept. Less than 100 years ago, old people worked as long as they had health, and when that failed, would live with and be cared for by family members. The concept of retiring at 55 to travel and play golf is a luxury of the 20th century we can’t afford no more (except for the very wealthy), and will soon be gone.
Completely unrelated, but here’s a good CBC poll that could go horribly wrong.
http://www.cbc.ca/news/yourcommunity/2011/10/should-per-vote-subsidies-for-political-parties-be-scrapped.html
What duffman says!!!!
I’m thinking there’s only one solution and it’s going to really hurt – hyperinflation and massive currency devaluation. It fits the crisis-management government fundamental: it has to be a crisis before it can be dealt with properly.
Hyperinflation and massive currency devaluation cleans the slate pretty good. Existing agreements are invalidated by the extreme circumstances, pensioners get their buying power wiped out, the young and those with genuinely marketable (absolutely necessary) skills and products emerge from the ashes to go forward earning new dollars – $1000/hr minimum wage? – and the world moves on.
It’s happened before, many times in many countries. During the 90s in the former Soviet Union the people woke up one day and their newspaper told them three zeros has been knocked off their currency. They woke up another day to see pictures of paper money on the newspaper front page with the message “these bills are no good now, throw them away, if you need cash go to your bank.”
We are sooo screwed.
I don’t know if Canada’s simple servant’s and military’s pension plans are separate or just part of the public coffers but I recall a while back they tried to do the general revenue thing (as opposed to a separate fund) and all hell broke loose. All I know is I fulfilled my part of the contract by doing my time, duty and paying what was required and if the government reneges there will be h*ll to pay.
If I sound irate it is because I am heading out to pasture in the next year and intend to collect what was lawfully promised to me.
per ardua ad astra
No one begrudges Pension benefits to our armed forces except perhaps the political wing of the Government. Thats what this is about. Out of control Entitlements for politicians who already make bundles of money on the system.
By allowing these horse thieves golden pensions, unreal salaries, protections normal citizens never see. We have created a new brand of Political class aristocrat. Its our fault for not stopping this before the piggies took over.
The Forces on the other hand put their lives on the line, not limo’s.
Don’t worry. There’s a bond for that.
Given that Social Security alone has more unfunded liability than the whole value of the US economy, it would seem plain that unionized public sector workers ain’t gittin’ their retirement.
Also SS recipients will be receiving -nuttin’-, because that’s what there’s going to be to pay those benefits with.
Cue the rioters in 3,2,1…
Problem being, like MOM said, you can confiscate every dime of income over $200k for every “rich b@st@rd” in the whole USA and not even TOUCH this thing. Not even touch it.
Speaking of rioters, I understand that the hippies getting punched in downtown NYC are all Tides/Ford foundation funded commies, with some George Soros money in there for good measure. I didn’t know you could buy stupid by the pound, but looking at those geniuses, it seems you can. Or at least rent it for the day.
The main problem facing our culture today is that way too many people want something for nothing. Give them some cheap money and they’ll borrow themselves into bankruptcy. What we’re witnessing today is the progressive collapse of the welfare state. What started in Greece and other such “progressive” socialist workers paradises is going to spread like wildfire across the globe. Hippies protesting reality ultimately won’t make a difference.
I could probably find the email, however I am not inclined since I am goofing off, but it displayed with references that the entire governmental pension payouts as expenditures exceed the total income tax revenue. It proposed, with proof, that pension payouts to the majority of workers is just like Social Security – an unfunded liability. It included federal, state, and local.
cal2 and mrs.cal2 are in greece at the moment. its a mess , the finances, the place , the mentality .
constantly having to deviate plans because of strikes.
cal2, careful, don’t take any wooden drachmas.
Ken (Kulak) at 10:03
That’s pretty funny, Ken. There’s probably more than one of our younger readers who don’t know what you’re talking about.
The way things are going, the old wooden nickel may be about to make a comeback. At least then, if you’re good at it, you’ll be able to carve your own money.
BJG,I was wondering if the young whippersnappers would catch on.
My wife has a woodworking shop in the old cow/horse barn, so we are set.