Reply With Quote
This is where I put in the obligatory "Bush's deficit budgets are stupid".
We should have spent the last few years paying down our debt, not increasing it.
You think your taxes are high now? Just wait.
Basically, a lot of promises won't be kept concerning retirement pensions, from private to public government people have been promised far more than has been paid for.The Gathering Pensions Storm By David Wyss
Mon Jun 5, 8:08 AM ET
The baby boom generation has been described as a pig going through a python. The problem is that the pig is getting close to the end of the python. Many baby boomers are facing retirement without adequate savings of their own. Together with Medicare trust funds that will be exhausted and inadequately funded corporate and government pensions, you have the makings of a potential crisis.
The problem for financial markets is twofold: First, the underfunding in corporate and other pension funds will cause individual firms great hardship, making those with high legacy costs uncompe ive. Second, the underfunding at the state and federal government levels will cause tax hikes, which will alter regional and international compe iveness. We currently estimate that U.S. corporate pensions are underfunded by about $140 billion. Add the cost of other postemployment benefits and the deficit doubles. State pensions are underfunded by $284 billion.
Disturbing as those numbers are, the federal underfunding situation dwarfs the state and private ones. Social Security has a $4.6 trillion shortfall (based on present discounted value of the next 75 years), and the federal civilian and military employee programs are underfunded by $4.5 trillion.
Underfunded Boomers.
The underlying problem is demographics. The postwar baby boom was a phenomenon throughout the industrial world, and those babies born in the late 1940s and 1950s are approaching retirement. The leading edge of the baby boom is now turning 60, and we can expect the ratio of retirees to workers to rise. Those who are now paying into pensions will start collecting benefits, and there isn't enough money in the pot to pay the pensions promised.
The problem arose because companies, and especially governments, were willing to use pensions as part of employee compensation but discovered that they could get away with underfunding those pensions. In the corporate sector, legal changes (primarily the Employee Retirement Income Security Act of 1974) forced them to fund pension programs (though not always fully). Retiree health care and other postemployment benefits don't have to be funded at all, and as a result are virtually unfunded at many companies and by most states.
The fact of life, however, is that everything retirees consume in retirement must come out of current consumption. An increased ratio of retirees to workers requires that an increased share of production go to nonworking adults. This must be done either through taxation, asset sales, or interpersonal transfers. That means retirees have to be supported by the government, using the wealth they built up over their working lives, or their families.
Longer Sunsets.
This situation exists throughout the industrial world and in those developing countries that have managed to cut back on birth rates. People are living longer and having fewer children. It is mild in the U.S. compared with Europe and Japan, whose birth rates have been lower and where immigration is not increasing the working-age population.
European and Japanese fertility rates (number of children born per woman over her lifetime) are all well below 2, implying long-term population decline. The U.S. birth rate is just above 2, implying essential stability (excluding immigration). High fertility rates in Latin America, Africa, and the Middle East are still keeping world population growing at an unsustainable level, but developing Asia is approaching zero population growth.
The other side of the shifting demographics is that we are living longer. Average life expectancy in the U.S. is now 77.9 years, up from 77.2 years in 2003. The U.S. has one of the lowest life expectancies of the major industrial countries; Japan, at 81.8 years, has the highest.
And not only are we living longer, but we are retiring earlier. The average retirement age in the U.S. is just below 62, up a little over the last 15 years but well below levels of a generation ago. European retirement ages are generally earlier, with France near 58 years. Longer life expectancy, extended education, and earlier retirement mean that most Americans will work barely half of their lives, and Europeans even less.
Asset Stretch.
A lot of nonsense is written about "the good old days" when everybody supposedly retired with a gold watch and a livable pension. The old days were never that good. When Social Security was proposed in the U.S. in 1933, the retirement age was set at 65 -- and average life expectancy was 63. Most people were not expected to live to collect, and historically most people worked until very near their death. Extended retirements are an invention of the last 50 years, and since life expectancy has increased and retirement ages have crept lower, people expect to spend more and more of their life in retirement [see BW Online, 6/1/06, "The Golden Years -- At Work?""].
Moreover, in "the good old days" most people never had a private pension. Even firms that had pension programs based them on seniority at retirement, so individuals who changed jobs frequently found themselves with little or no pension accrued. It was not unusual to see workers fired in their late 50s or even early 60s so that firms could avoid paying their pensions.
Today's system deals with some of these issues by allowing everyone to plan for their own retirement and by making pensions vest early. However, it creates a problem by forcing everyone to plan for their own retirement. Today's preretirement cohort -- the people now in the 55-64 age bracket -- have more assets than at any previous time, both in absolute terms and relative to their annual income. However, they also have more years to live in retirement, and thus often need more money than they have.
(Note: This article was condensed from Standard & Poor's CreditWeek, June 7, 2006, and is also available on RatingsDirect.com.)
I do not expect any retirement benefits other than what my wife and I can save for ourselves, and neither should anybody else.
This is where I put in the obligatory "Bush's deficit budgets are stupid".
We should have spent the last few years paying down our debt, not increasing it.
Having been told by the Repug that the reducing the deficit would be necessarily painful, we see the Repugs cutting medicare/medicaid/cancer research/whatever which help truly needy, while eliminating the Estate Tax paid only by the Super Super Rich (basically 18 business dynasties that have bought enough congressmen to get what they want), tax cuts that will increase the deficit much more than the cuts will decrease it.
Last edited by boutons_; 06-05-2006 at 12:52 PM.
They're not going to raise taxes to save these programs. They will let them go into default instead.
Agreed.
No one under the age of 40 today paying Social Security tax will ever see a dime of it.
Nor will we see a refund check. It will be money promised to only the baby-boomers on the backs of their own children.
Thanks, you ing losers.
All the above post. If I am not wrong Bush has been prodding Congress to do
something about all this for the past years. But the dimm-o-craps wont have
any part of it........So pick up your pen and paper and write your fine dimm-o-craps
and ask them to do something about it. Don't blame Bush.
Congress has virtually rubber stamped Bush's budgets.
This is one thing where the problem is irrefutably Bush's.
Then there is the unfunded pension liabilities that companies are carrying for now but will be foisted on the federal government.
Bush and his GOP Congress pushed through a Medicare prescription-drug benefit with no mechanism to pay for it.
It was the Republican-led Congress that killed Bush's attempts at Social Security reform.
Nobody has even paid attention to Medicare.
There's plenty of blame to go around, not just the "dimm-o-craps." Pretty much our entire legislative branch has vacated its responsibility to the American people.
Your article said corporate pensions are underfunded by just $140 billion. Over 30 years, that works out to $16/year for each citizen, and that's assuming the government would pay full benefits, which it won't. That's nothing to lose sleep over.
Really, who blocked all his plans to look over Social Security? Who told
everyone that the Republicans have been trying to "starve it to death"?
Republican led Congress. lllllooooooo. Harry Reid and Nancy Pelosi and
the filibuster card.
The government will pay a lot of that. Corporations pay for a type of insurance guaranteed by the government that covers defaulted pensions, kind of like the insurance that covers your bank accounts.
Corporations will claim to be too poor to cover the pension funds, while at the same time handing their failed CEO's $100M+ severance packages. (sighs)
Notice that he said "the ENTIRE" legislative branch. That includes the corrupted democrats.
NOW will you admit the Republicans in congress might not be blameless when it comes to being fiscally irresponsible?
Yeah, that makes a lot of sense. "You Republicans better pass that prescription drug package or we'll filibuster it!"
xray would be awesome as House Speaker.
Nancy Pelosi: "We need a comprehensive bill for nationalized healthcare at taxpayer expense."
xray: "No way, you stupid dimm-o-crap."
Nancy Pelosi: "Oh yeah? Fine, we won't let you pass a bill for nationalized health care! We'll filibuster it if you try!"
xray: "No way I'm going to let a dimm-o-crap stand in my way! I'm in the majority! I'm going to pass nationalized health care and you're going to like it!"
Nancy Pelosi: "Oh, please don't throw me in that thar briar patch, Mr. Speaker."
I will give you points on this one. Bush pushed for the dumb plan. And
the republicans went along with it. It was a plan no one ask for, wasn't
really wanted by many, but for some reason Bush had to have it.
The problem with the so called Bush budgets was that by the time all
the ear marks got added and other pork barrel projects it was completely
out of kilter. Why Bush want use his veto power, I have no idea. He has
not vetoed one bill his whole time in office. It has to be some kind of
record. Not one he can be proud of though.
Fiscal conservatism or even basic fiscal responsibility are no longer tenets of the Republican Party. Unfortunately, neither are they tenets of the Democratic Party. The electorate has no choices to get our financial house in any kind of order. The train simply will go off the tracks at some point, and we will end up like Argentina, defaulting on debt, and suffering the economic consequences.The problem with the so called Bush budgets was that by the time all
the ear marks got added and other pork barrel projects it was completely
out of kilter. Why Bush want use his veto power, I have no idea. He has
not vetoed one bill his whole time in office. It has to be some kind of
record. Not one he can be proud of though.
If you're lucky, you won't live long enough to see it happen.
I'm going to keep an eye on it and hopefully pull a Joseph Kennedy right before things so south.
Despite repeated attempts to hide the obvious, even the government is having trouble hiding the slowing of the economy
CNNWASHINGTON (Reuters) - Federal Reserve Chairman Ben Bernanke said Monday the Fed needed to be vigilant to make sure inflation stays under control even as the U.S. economy starts to shift to a slower pace of growth.
"It is reasonably clear that the U.S. economy is entering a period of transition," Bernanke told a group of bankers. "The anticipated moderation of economic growth seems now to be under way."
Despite forecasts of easing growth, the U.S. central bank chief expressed concern over core inflation, saying the pace of increase in non-food, non-energy prices measured over both the past three and past six months was at levels that "if sustained" would be at or above the upper end of the range he views as consistent with price stability.
"These are unwelcome developments," Bernanke said
You could say that the economy is already teetering on recession if you exclude government jobs from the latest new-jobs report (>75,000).
Remember ES, the government can always print more money. They will
not default like a state or city who does not have that power. It may
cheapen the dollar and inflation will soar. But there will be no default.
If it costs $10,000 to buy a loaf of bread I hardly see how that's any better than defaulting.
^^No argument there ES. But technically it isn't defaulting. If you remember
back after the WWI in Germany it took a wheelbarrow full of money just to buy
that loaf of bread. Part of what caused the rise of Hitler.
Well, that's comforting.
^^Yeah, thought that would make your day. Of course we got FDR, who wasn't
a Hitler, but did some things bordering on what Hitler did. You know like lock up
all the Japanese and a few other little things like that.
There are currently 1 users browsing this thread. (0 members and 1 guests)
Posting Permissions
