We Need to Talk

Friday, April 12, 2013
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For those liberals and progressives, including the president and the Democrat-controlled U.S. Senate, who appear to be unconcerned about our out-of-control national debt, a generational debt imposed upon our children, grandchildren, and future generations, which just blew past $16.8TK trillion, and the increasing costs involved with Obamacare, lets talk about our unfunded congressionally approved mandated liabilities: Social Security $16.3 trillion; prescription drugs $21.5 trillion, and Medicare $85.68 trillion, total $123.5 trillion, or $1.09 million per citizen. (Source: U.S. Debt Clock, real time.) Tell us how we and our children, grandchildren, and future generations are going to pay for the unfunded mandated liabilities, not to mention ObamaCare and the national debt? How are we going to cease being the greatest debtor nation in history? How are we going to survive as a nation and people?


Independent Discussion Guidelines

You might want to call this taxation without representation, and take it from there.

foofighter (anonymous profile)
April 12, 2013 at 6:35 p.m. (Suggest removal)

Sorry, our politicians in Washington can't see past the next election. If the politician can kick the can down the road until after the next election, the problem doesn't exist in their minds.

Botany (anonymous profile)
April 13, 2013 at 7:13 a.m. (Suggest removal)

This letter is an excellent example of Deficit Derangement Syndrome. It's a condition immune to facts, but for those who haven't yet completely succumbed, here's some context from the reality-based world:

pk (anonymous profile)
April 13, 2013 at 7:23 a.m. (Suggest removal)

Since when is Krugman reality-based?

Botany (anonymous profile)
April 13, 2013 at 7:50 a.m. (Suggest removal)

Since he started using facts to back up his arguments.

Here are a couple of other folks who use those pesky realities, which conservatives ignore in their eternal campaign to give aid to the wealthy at the expense of everyone else

pk (anonymous profile)
April 13, 2013 at 7:57 a.m. (Suggest removal)

Don't know if they are still teaching American History in today's public schools, but reading the political thinking that led to the American War for Independence from the British may well be a timely exercise today.

Taxation without Representation should be the rallying cry for every young American who did not vote for this current unsustainable tax burden. They did not create it, did not assent to it, they do not even benefit from it, yet are they stuck with the bills to pay for it materially compromising their own futures.

Read what your Revolutionary fore-bearers did when they were faced with the same untenable situation in Pre-Revolutionary America. Don't Tread on Me is a reasonable response.

You don't need to dismantle America, but you do need to change its direction. Get your new political marching papers from our country's own historical archives.

foofighter (anonymous profile)
April 13, 2013 at 8:16 a.m. (Suggest removal)

This article calls Social Security an "unfunded, mandated, liability". WRONG!!! Social Security is paid for (funded) by employees and employers. It is NOT funded by the government nor does it have anything to do with our debt. It is a program we have individually paid into, not an entitlement. The author of this misleading story needs to get his or her facts straight. And how did somebody's off base comment become a news story??? The editor of The Independent should be more vigilant.

xguy (anonymous profile)
April 13, 2013 at 10:03 a.m. (Suggest removal)

@pk: Thank you!

hodgmo (anonymous profile)
April 13, 2013 at 10:16 a.m. (Suggest removal)

FDR - a chicken in every pot.

DrDan (anonymous profile)
April 13, 2013 at 10:47 a.m. (Suggest removal)

Yeah, we paid into social security, but please don't think it has nothing to do with our debt. That money isn't sitting there waiting for us when we retire. All that's there is a bunch of IOU's that the federal government issued when they raided the social security trust fund (if you really want to call it that) to pay for other things. Please do your research! Of course the government will pay us back. The only question is what the dollar will be worth when they do. All they need to do to ensure that we are paid back is keep the printing presses on overtime.

But again, none of this matters as long as the Fed can keep interest rates down while printing more money. We can keep kicking the can down the road until the next election. It sounds so easy, doesn't it?

Botany (anonymous profile)
April 13, 2013 at 11:22 a.m. (Suggest removal)

"Taxation without representation" is a ridiculous way to frame this. Political decisions always have consequences for people who aren't yet of voting age. For example, raising the tax on cigarettes affects their cost for future generations. It's nonsensical to complain as if every existing policy should be voted on every time another person in the US turns 18. The "untenable situation" so upsetting fooguy turns out to be a result of requiring that people too young to vote wait until they're no longer too young to vote.

And anyone who thinks that current effective tax rates are an "unsustainable burden" should look at the 2 years of returns that Mitt Romney deigned to release.

pk (anonymous profile)
April 13, 2013 at 12:01 p.m. (Suggest removal)

Anytime a later generation wants to change taxes on cigarettes, they can do so and stop paying that tax.

In this situation we are talking about government debts incurred; not taxes imposed. But those government debts presently are getting paid with tax dollars. Sorry I did not make this clearer.

That is where the present generation played no role incurring these debts and will not even benefit from these debt-obligations. This is what needs to stop. Please understand the difference.

The expansion of social security recipients now includes many who paid little or nothing into the system. Likewise the incremental expansion of Medicare recipients to those now under age 65 who receive Medicare for listed chronic conditions is incremental and unfunded expansion.

Mission creep is what to watch out for, that imposes a major debt burden on future generations.

Unfunded public pension liabilities is an even greater future obligation landing on those who did not agree to this drain on their present tax dollars to pay for past services, incurred even before many future tax payers were even born.

The "taxation without representation" issue is expansion of services without under-pining this with the expansions of revenues and buy in by those burdened with these future accruing obligations. Pay attention.

The solution is obviously longer-range thinking and triggering mechanisms that more fairly and equitably balance public program expenses to revenues, which means benefits may decrease in lean times, and do not automatically increase during times of fat.

foofighter (anonymous profile)
April 13, 2013 at 12:57 p.m. (Suggest removal)

Krugman is in the discredited socialist camp, so read him but keep his well-known bias in mind. It is good to read from a wide range of opinions. Add at least Thomas Sowell and Charles Krauthamer to your list.

Even Thomas Friedman can provide context and balance to the discussion as well for the more popular writers. Star Parker and Michelle Malkin are excellent popular writers as well.

Best bet is to add The Economist and the Wall Street Journal on a routine basis to your wider reading list. Even the Santa Barbara NewsPress offers a surprisingly wide range of political and economic perspectives - so you don't have to go far and even get a few Krugmans thrown in for free.

foofighter (anonymous profile)
April 13, 2013 at 1:05 p.m. (Suggest removal)

How about we cut our addictions on wars be they on nations or substances.

Ken_Volok (anonymous profile)
April 13, 2013 at 1:44 p.m. (Suggest removal)

Milk ran out my nose when I saw Michelle Malkin and the SB News Press mentioned in the same figurative breathe as Paul Krugman and Thomas Friedman.

Being well-read isn't the same as reading broadly. And then there's the matter of synthesizing what you read.

Stick with the Wonkblog for facts and clarity (link provided by PK).

EastBeach (anonymous profile)
April 13, 2013 at 2:02 p.m. (Suggest removal)

Michelle Malkin has issues for which there will never be a political solution.

Ken_Volok (anonymous profile)
April 13, 2013 at 2:21 p.m. (Suggest removal)

It isn't just liberals and progressives. Even self-styled right-wing talk show host Michael Savage bemoaned that G.W. Bush was spending money "like a drunken sailor".

billclausen (anonymous profile)
April 13, 2013 at 4:09 p.m. (Suggest removal)

Michelle Malkin is great. She is a brilliant writer on the right the same way Maureen Dowd savages on the left. Between the two, fair and balanced. You decide.

Michelle being both really cute, young and really smart is still unnerving in misogynist America, and that included misogynist American women too. Cut out her picture and blank out her name so you don't have be unnerved by this; then read her stuff for their amazing content only.

foofighter (anonymous profile)
April 13, 2013 at 6:07 p.m. (Suggest removal)

Sorry if I responded to what you said rather than what you would have said had you said something else.

And I’m glad we agree on the appaling irresponsibilty of Bush and the Republicans for kicking the deficit through the roof by invading two countries and enacting a major new entitlement program without bothering to consult the unborn on how they felt about having to pay for them.

Your comments show that you have no grasp of what words like “discredited” or “socialist” mean, so its not surprising that you get your information from people who are generally empirically wrong, like Krauthammer and the Editorial Board of the Wall Street Journal, or who have no relation to the empirical world at all, like Michelle Malkin, who isn't disliked because Americans are misogynists and she's so darned cute, but because her career is based entirely on flinging terms of abuse from her dictionary of political invective for the pleasure of her ideological playmates.

pk (anonymous profile)
April 13, 2013 at 9:37 p.m. (Suggest removal)

There's a lot of creative writing here.

Ken_Volok (anonymous profile)
April 14, 2013 at 12:24 a.m. (Suggest removal)

Before I get pilloried for any ignorance I may display, let me say that I don't claim to have all the answers, and I am certainly open to constructive criticism.

Every four years the Demopubs/Republicrats cough up new candidates who shine their halos and go in front of the American public. About 90% of the American people seem so concerned about their party's candidate winning that they are willing to overlook the faults of their own party--even to the point where the actions of their party are contrary to that party's stated principles.

Generalized point in this matter include the Republicans' hawking of "Family Values" and "fiscal responsibility" as well as "small government" whilst many of their candidates (to quote Jesse Jackson) have "more than one living wife". Fiscal responsibility?...Then of course, the "small government" thing while they support the Patriot Act and the National Defense Authorization Act and the War on Drugs.

Democrats talk about "progressive" ideas and respecting the working-class while they support the three points above and regulate business so badly that opening a small business is often impossible. Then there is the never-ending support of foreign despots, supported by both parties.

Every once-in-a-while maverick...or rogue (depending on your viewpoint) candidates such as Kucinich, or Paul, or whoever comes along but people get freaked out about it and follow whatever the media tells them to do and elect the same ideas represented by different faces. (I think of the old joke back in '72 "Nixxon, but it's still the same old gas" based on the Exxon ad popular at that time)

The biggest fear I have is our loss of freedoms. We have the biggest per capita prison population according to what I hear, and that alone should make one wonder, yet we're fed this line about how we're the greatest country in the world. Even if we are, we can do better--MUCH better. The problem is, like someone in an abusive relationship, most Americans are so scared of what will happen if they leave the abusive political relationship with their so-called representatives that they'd rather stick with the status quo as it grinds us down while arguing with other bloggers about the perceived virtues of their ideologies.

billclausen (anonymous profile)
April 14, 2013 at 4:07 a.m. (Suggest removal)

EB - You're right that Krugman doesn't belong in any rational discussion of economic policy.

Botany (anonymous profile)
April 14, 2013 at 6:48 a.m. (Suggest removal)

Krugman as proof of a sound economic argument? Seriously?
Wow! The current Dem hilarity that we have solely a revenue problem and not a debt problem is especially funny since Obama railed against Bush and his out of control deficit. Yea, he really did, over and over and over...and now magically out of control debt is a benefit? I assume all of you supporting massive taxation without accountability were yelling at your TV's while Obama was excoriating Bush for what you now advocate.

italiansurg (anonymous profile)
April 14, 2013 at 7:35 a.m. (Suggest removal)


Please provide the sourced quotes where Dems say that we have "solely" a revenue problem and not a debt problem, that "out of control" debt is a benefit, and that they support "massive taxation without accountability."

pk (anonymous profile)
April 14, 2013 at 7:41 a.m. (Suggest removal)

ps. To make your trolling easier, since the most prominent Democrat is the President, just cite the places where he's proposing massive taxation and ignoring other ways to handle the debt, a debt he says he doesn't care whether it's out of control.

pk (anonymous profile)
April 14, 2013 at 8:13 a.m. (Suggest removal)

Coffee ran out my nose hearing Krugman and Thos. Sowell mentioned in one sentence, not to mention comparing Maureen Dowd with Michelle Malkin... sigh... but it shows how desperate the critics are, they don't have anyone, and at least Dowd is funny and sensitive, ironic and pensive, knows some history, pounds both sides. David Brooks is the old Republican best pundit, like his Friday oped in the NYTimes.
Taxes are low here compared to Europe, AND citizens have a much weaker safety net. Obama's as Republican as Bush '41, and he's trying to rebalance entitlement spending while spending down some of the debt. A HUGE amount of this debt came under Bush '43 in his stupid neo-con Republican wars, which I never supported and was ridiculed for (those views then).

DrDan (anonymous profile)
April 14, 2013 at 8:27 a.m. (Suggest removal)

C'mon DD, and I am being nice simply because I like you; while I rather enjoy Dowd, and have met her a couple of times in The Bay, even she would not describe herself as fairly as you do. She is an unabashed Progressive and does a good job for her side for the reasons that you state, but she hardly bashes both sides.
For gawd sakes stop using the Euro model. This argumet was kind of cute a couple of decades ago. Dude, it's FAILING there and would have failed completely except for the luck of having the German economy to prop up the rest of em, including my home country. Even in Europe your view is now a tiny minority.
I just read this morning that Mr Hope and Change only paid an 18% adjusted tax rate on hundreds of thousands of dollars. I pay more than that and I have an excellent tax attorney.

italiansurg (anonymous profile)
April 14, 2013 at 8:46 a.m. (Suggest removal)

Pitting Democrat vs Republican against each to assign the most blame, is missing the point entirely.

We have a non-partisan debt obligation that is now foisted on basically a younger DTS generation to keep paying off, but who will not reap any of the present benefits of this wasteful spending.

This blame game is wasting precious time right now, instead of working on solutions. Young people should think about succession from both political parties, if this is all the adults in the room can offer today.

This discussion has devolved into the sandbox. Kudos to the original letter writer, but realize you are not going to get serious responses from the Independent crowd. I suggest you take your concerns where they best resonate, who can roll up their sleeves and manifest the necessary change - the Young America Foundation.

Thank you however for writing your letter. You are on the right track, but with the wrong audience.

foofighter (anonymous profile)
April 14, 2013 at 8:55 a.m. (Suggest removal)

Krugman has devolved from an economist to a partisan politician. Krugman was for going over the fiscal cliff, but only to the extent of forcing the capitulation of the opposition. Most of his commentary these days is reserved for taking cheap shots at conservative politicians.

Botany (anonymous profile)
April 14, 2013 at 8:57 a.m. (Suggest removal)

The better question Mr Volok, is how can we cut our addictions to substances.

foofighter (anonymous profile)
April 14, 2013 at 8:58 a.m. (Suggest removal)

The biggest debts we face are the unfunded pension liabilities promised public employees. (aka baby boomers sucking off the public trough) Blaming Bush II and the neo-cons is merely diversionary. This is the tactic of the public employee unions marching orders.

Whenever anyone gets close to fingering the massive unfunded public pension liabilities we face, out trots on cue Bush II and the neo-cons.

Let yourself continue to get duped by this public employee smokescreen if you want, but young people saddled with this enormous and unsustainable debt don't even know who Bush II was yet are vaguely aware they are stuck with these pension bills come due now on their watch.

Plus young people are becoming vaguely aware the education they got at the hands of these very same teachers now living off their reckless pension promises failed their job number one: actually giving these students an education, instead of a wholesale political indoctrination.

Thank goodness these young people can now vote in increasing numbers to start changing things, and toss out the failed progressive spend and tax agenda.

Baby-boomers created this selfish bubble for themselves, in which they continue shamelessly to live.

But there remains a growing critical mass on both sides of that bubble which will soon strip away this baby-boomer sense of entitlement whereby they always grabbed more of their fair share, while dumping the costs on someone else. First their parents, then the state, and now to succeeding generations.

Keep up the pressure, Mr H.T. Bryan. Don't let the selfish baby boomer bubble stray you from the path you need to be on. They may have volume in numbers, but they are bankrupt on ideas or solutions. Their only game plan is to keep taking, until the day they die.

foofighter (anonymous profile)
April 14, 2013 at 10:19 a.m. (Suggest removal)

"foofighter" offers his sage advice:

- - - "Pitting Democrat vs Republican against each to assign the most blame, is missing the point entirely."

- - - "We have a non-partisan debt obligation that is now foisted on basically a younger DTS generation ..."

- - - "This blame game is wasting precious time right now, instead of working on solutions."

- - - "This discussion has devolved into the sandbox. [snip] but realize you are not going to get serious responses from the Independent crowd."

= = = =

"Foofighter's" solution our fundamental differences and the divisions ........... ?


And here they are:

"As the principal outreach organization of the Conservative Movement, the Foundation introduces thousands of American youth to these principles. [snip]"
- Young America's Foundation: The Conservative Movement Starts Here

That "foo" is one talented ironist.

binky (anonymous profile)
April 14, 2013 at 10:33 a.m. (Suggest removal)

Pay dirt. We got 'em, Mr. Bryan. They are imploding. Move in quickly amidst the shatters. All they have are ad hominum defenses. Victory!

foofighter (anonymous profile)
April 14, 2013 at 10:42 a.m. (Suggest removal)

Foo - Actually, the biggest debts are social security and Medicare obligations. They wouldn't be considered debts if the government had put the money aside and invested it. However, since the government borrowed all the money from the social security trust fund to spend on other things, it has become a debt owed by the government to the future retirees. This debt is hurtling towards us in the pending retirement of the baby boom generation. Once that hits us in full force, there's no stopping the debt from imploding on us.

Botany (anonymous profile)
April 14, 2013 at 10:48 a.m. (Suggest removal)

Need to sort out California entitlement debt and federal entitlement debt. Don't give one a pass in favor of another, since they have so much in common and have similar solutions and blind spots.

Solve one and you solve them all. We have more direct control over the massive California entitlement debt, and fewer options. How we vote for our legislators in the future is one of them.

foofighter (anonymous profile)
April 14, 2013 at 10:57 a.m. (Suggest removal)

The federal government can stop the imploding entitlement debt by printing more money, creating imploding inflation instead. This option is not available for California which makes it the more compelling problem.

Acid test: will baby boomers print that federal money to pay themselves as their last testament of their Me Generation of selfishness?

But only the younger generations are left to pay off California's unfunded pension obligations. Squeezed in the middle - they can use inflated cash to pay these off, yet are stuck living their lives in the resultant inflated economy.

Solve these issues now: convert all public pension plans to defined contribution plans along with a Social Security floor and ceiling on any public pension plan offerings.

Fairness in its finest form. Non-public workers have SS plus self-funded IRA or 401K plans. Public workers should get nothing more.

foofighter (anonymous profile)
April 14, 2013 at 11:18 a.m. (Suggest removal)

Instead of facts (e.g., prove empirically that Krugman is wrong and his critics are right, and show that Democrats support exploding deficits and want to handle them solely by massive tax increases), we get diatribes against those who actually remember which president was in office when the economy collapsed, along with attacks on public employees and their unions, teachers, and baby boomers, together with complaints about "ad hominum" defenses from someone who seems to believe he can achieve victory by using attacks that are fact-free and nothing but ad hominem.

pk (anonymous profile)
April 14, 2013 at 11:23 a.m. (Suggest removal)

No attacks on public employees or their unions. Just the promises made to them, by elected officials that were endorsed for election by these very same public employee union beneficiaries, that are not sustainable.

Voters who allowed this to continue are the only ones 100% at fault. Paying civil service workers well is good for everyone concerned. That is not the issue. Incurring long-term debt liability and sticking that debt on future generations was the wrong turn.

Stay focused and haul in your straw dogs. We have a chance to change this direction, and we must. We start with public pension reform.

foofighter (anonymous profile)
April 14, 2013 at 11:37 a.m. (Suggest removal)

Unfortunately for all of us, Krugman won't be proven wrong until the Fed can't keep interest rates at 0 anymore. As of now, Obama and Bernanke have been very successful in kicking the can down the road. When that will happen, I wish I knew. The Fed has a horrific balance sheet that's currently being expanded at a rate of $85B per month. They can't possibly unwind that without severe consequences. The one thing we can all be certain of is that is will end very badly. Unfortunately, we will never know when that will happen until it arrives.

Botany (anonymous profile)
April 14, 2013 at 11:40 a.m. (Suggest removal)

BTW: the pension you save today by necessary reform may be your own. You do have a vested interest in solving this problem.

foofighter (anonymous profile)
April 14, 2013 at 11:40 a.m. (Suggest removal)

We got into this mess incrementally, and we will get out incrementally. Take the first steps and the rest will follow.

A good question to pose for all new government legislation increasing our debt burden: does this program foster more dependency on government or more independence from government?

Do you support candidates who promise to take this position? Or do you support those endorsed by the very beneficiaries of more public debt like SB has been electing for too long?

Williams, Jackson and Capps are all tools of the public employee unions. Yet you let them dazzle you with their ersatz pro-environment and anti-war window dressing. Think harder next time and follow the money that is far more interested in getting them elected than you and the snail darters.

foofighter (anonymous profile)
April 14, 2013 at 11:46 a.m. (Suggest removal)

The Foos all think we are broke and the sky is falling. There is plenty of money in this country, unfortunately it is held by those who already have enough and keep taking and taking and hoarding and those who think we need to fight wars. It is 2013, not the 1700's. It did not take an army to take down bin laden. Yes they are all to blame. The dems are the party of reagan and the gop is the party of stupid. Some choice¡

spacey (anonymous profile)
April 14, 2013 at 12:20 p.m. (Suggest removal)

Ahhhh yes, (1) private wealth distribution, (2) Bush Derangement Syndrome, and keeping up the (3) anti-business class warfare argument.

Okay, that is on the table and will be evaluated for its merits and drawbacks, along with (4) conversion of public pension plans to defined contribution plans.


foofighter (anonymous profile)
April 14, 2013 at 12:26 p.m. (Suggest removal)

You're right spaced, there's plenty of money. All we need to do is print it!

Botany (anonymous profile)
April 14, 2013 at 12:30 p.m. (Suggest removal)

From Intellectual Takeout (1999 was the watershed year):

"This shortfall has grown so large because elected officials preferred the hidden cost of higher retirement benefits to the visible cost of higher wages.

For instance, a recent report from the Reason Foundation noted that thanks to a 1999 pension bill radically increasing benefits, 'there are 9,111 state and local government retirees in California, such as police officers, firefighters and prison guards, who receive pensions of at least $100,000 a year (through CalPERS), and an additional 3,065 retired teachers and school administrators who receive pensions of over $100,000 a year (through CalSTRS).'

As a California pension recipient told Forbes last year, 'It’s just taxpayers’ money, so nobody cares.' "

This current mess is less than 20 years old. It can be undone. Had we started earlier and withdrawn those unsustainable pension promises, we would be far closer to fiscal soundness today.

Not a moment to waste turning this around. Support good pay and defined contribution pension plans only for public workers.

Then we can start working on the public employee health insurance devouring monster next.

foofighter (anonymous profile)
April 14, 2013 at 12:39 p.m. (Suggest removal)

Hold a Republican president responsible for the effects of his policies? Deranged. Hold a Democratic president responsible for the effects of a Republican president’s policies? Fair and bipartisan. Evaluate a liberal economist’s judgment based on current facts? Can’t do it, facts might chage. Evaluate a conservative columnist’s judgment based on current facts? Must be correct, so facts, even of past failure, don’t matter. Challenged for comments on a particular topic? As the argument goes on, keep throwing in additional conservative flash cards, relevant or otherwise. Claim that history can do no other than prove you correct. Declare victory.

pk (anonymous profile)
April 14, 2013 at 2:24 p.m. (Suggest removal)

Or, you can just sit around and do nothing. That is a good alternative. The only thing the blame game does is expose the lack of other solutions or options.

As if we today are supposed to be responsible for slavery in the US. Or that we today are supposed to be responsible for denying women the vote. Or that young Germans are supposed to be held responsible for WWII.

All of us are responsible for learning from the mistakes of prior generations; but we still have the responsibility for going forward to right wrongs and hand over a better situation for those following after us.

Move along. Or as the kids say today, get over it. The only way we can make life better tomorrow is to terminate defined-benefit public pensions today. Step one. Then you can figure out how to save the rest of the world.

foofighter (anonymous profile)
April 14, 2013 at 2:44 p.m. (Suggest removal)

Let's assume much of the objection here is coming from someone planning on, or currently getting a public pension, whose generosity was substantially enhanced post-1999 when the inherently unsustainable benefits started accruing.

How can they take themselves out of the present argument to reduce public pension obligations for future workers, and those not already vested in the post 1999 largesse?

We are stuck with only part of the mess we created - those guaranteed the post-1999 payouts. But we have new workers coming on board who should not be granted those mistaken and unsustainable public pension benefits. That is where the action is.

With state unemployment as high as it is and far too many college grads going begging for jobs that use their higher education skills, there is no shortage of people looking for public sector jobs.

This state is losing its private industry base with every new job killing regulation that gets passed, so public sector employment will soon be one of the only choices if someone is looking for a job.

The post-1999 pension offerings are not necessary to attract people to work for the government and they are not sustainable. They have to be terminated for all new workers.

And those who did happen to win the post 1999 Ponzi Pension lottery getting these unsustainable public pension perks need to either think about sharing them with their colleagues, or living in a two-tier workplace where they might have to suffer resentment and envy from their fellow, less endowed workers. Not pretty, but there is no other choice.

foofighter (anonymous profile)
April 14, 2013 at 2:55 p.m. (Suggest removal)

They paid into their pensions. They entered into an agreement in which they were to be compensated. What don't people understand?
Want to alter agreements with future employees (and complain you can't good people)? Go ahead but the pensioners are not living high on the hog, only a very few- probably one percent.

Ken_Volok (anonymous profile)
April 14, 2013 at 3:01 p.m. (Suggest removal)

Average CalSTRS pension is $53,000 a year for life, for teachers who only worked 9 months a year.

Unfortunately, teachers did not pay enough into this system to sustain this level of payout. So today's and tomorrow's taxapayer's will have to make up the pension difference every year, out of the state's general operating funds. (ie: Tax dollars)

This is the issue - using more and more present tax dollars to pay for past services that were insufficiently funded when they were accrued. This is what is behind the annual requests for higher sales taxes, higher property taxes and higher parcel taxes - to pay these very generous government worker salaries and benefits.

This is the public debt burden future generations will be asked to pay, yet never assented to. It does not have to happen this way. It can become a "pay as you go" system, just by changing public pensions to defined-contribution plans, like workers in private industry get.

Average teacher salary during the nine month working year plus benefits in SB is $99,000 a year, also paid out of the state's general operating funds. (i.e.:tax dollars)

Is this a sufficient salary from which to self-fund their own additional retirement accounts to supplement a switch to a defined contribution plan, similar to the private industry 401K plans?

How does the CalSTRS pension (average $53,000 a year payout for life) compare to the one you are getting, if you also have a BA and an additional one year professional certificate? Are you also making $99,000 a year for only working 9 months out of that year?

Volok, we already know your wife is a teacher so please disclose your conflict of interest when you respond.

foofighter (anonymous profile)
April 14, 2013 at 3:27 p.m. (Suggest removal)

"All of us are responsible for learning from the mistakes of prior generations," unless they derive from the economic policies promoted by conservatives, which can never be considered mistakes, even when they prove disastrously wrong, and always should be trusted to point the way out of the mess they caused. Anyway, just dismiss all that stuff and any other factual arguments about the issues at hand, because pensions. So be bipartisan, which means, sign up for the conservative cause, and regardless of where the argument begins, end up complaining about public pensions.

pk (anonymous profile)
April 14, 2013 at 3:32 p.m. (Suggest removal)

All of us are responsible for learning from the mistakes of prior generations. What we do with that knowledge of course is another whole matter. pk, you are going to have to move past blame and straw dogs.

Defined-benefit public pensions are unsustainable in their current form. They need to be changed to defined-contribution pension plans for the good of all concerned. We have learned this lesson from their prior promises, past performance and present mismanagement.


foofighter (anonymous profile)
April 14, 2013 at 4:11 p.m. (Suggest removal)

conversion of public pensions to 401(k)s? Keep dreaming foo, what a ripoff of the workers! On the other hand, I am on record for obliging public pension folks to pay in, to pay in more (as UC pension plan requires; my spouse will get one, disclosure), and to CAP public pensions at $90,000.
you also need "to move past blame and straw dogs", foo, and your tired rant that all these pensions are out of money isn't fully correct.
Hey, foo, disclose YOUR personal interests in this, eh, before lecturing others to do so.

DrDan (anonymous profile)
April 14, 2013 at 4:22 p.m. (Suggest removal)


"foofighter" works for the Young America's Foundation or the News-Press or one of their entourage (Ebenstein, Steepleton, Weisenberger, et. al.).


.... public pensions.

binky (anonymous profile)
April 14, 2013 at 4:34 p.m. (Suggest removal)

KV-"They paid into their pensions. They entered into an agreement in which they were to be compensated. What don't people understand?"

What you're failing to acknowledge is the corruption between the public employee unions and the politicians. Government officials are supposed to represent the taxpayer in the relationship between the government and it's employees. The problem with public employee unions is that they seek to influence the politicians in these negotiations at the expense of the taxpayer. The donate money and good will and encourage their members to vote for politicians that will sacrifice the taxpayer's interest to benefit the unions. That is why unions have no business in public service. But you don't need to take it from me, take it from the great Democratic icon, FDR.

Botany (anonymous profile)
April 14, 2013 at 4:35 p.m. (Suggest removal)

The current unsustainability of public pensions per CalPERS and CalSTRS took off after 1999. Prison guards jumped in first to be followed by the California teachers unions, then health care worker unions, SEIU ....etc, etc ...etc. Whoosh, it all happened pretty fast.

This came about because it soon became was with mandatory public employee union membership and direct payment of union dues from state coffers directly to the union bosses.

The now mandated public employee union members did not even have to see this amount or write a check, just taken off the top and sent to the union bosses. Boom, boom, boom these things all came together very quickly in the subsequent years since 1999.

That is when things really got crazy as the public employee unions amassed huge war chests and took over the California legislature getting union friendly candidate elected and mounting politics of personal destruction campaigns against anyone who opposed them. With their friendly legislature they started locking in every public employee benefit and protection they could.

You wonder why politics have gotten so nasty lately, here is your explanation. And this is being done with your own money as all of this is just the exchange of your tax dollars to the forces that are now dedicated to extracting more and more of your tax dollars.

We all played a role because we voted for these people to do this to us. Now we have to undo it.

So stop yammering about taking away vested interests. That is not the argument. Vesting at this unsustainable level has been going on since 1999 - less than 20 years. We have a chance to undo this.

Everything since 1999 was passed by willing voters who did not see the connections, but now those same voters are alarmed when the bills are now coming due and it seems there is no end in sight.

So we do have to dismantle the wrong turns exacted over these past few years that threw the state budget and public services badly out of balance. This is doable. The rulings from the Stockton bankruptcy case will speed this on its way.

Change is happening and the more voters know, the faster this will come about.

foofighter (anonymous profile)
April 14, 2013 at 5:21 p.m. (Suggest removal)

foo is Lanny or Scott or yeah, whoever, sure a lot of very rehearsed data in the stream...sigh

DrDan (anonymous profile)
April 14, 2013 at 6:25 p.m. (Suggest removal)

Are public pensions no longer sustainable as foofighter insists?

Here's some info I dug up last December while pouring through the annual reports for a number of companies and public pensions ....

One way to assess the health of a pension is to look at its "funded status", a measure of current assets vs current & future obligations. Funded status these days appears as a line item in the pension's annual report.

Here's a look at the latest funded status of pensions for local/state public pensions and some commerical companies (some doing busines in our area). Higher % is better:

AT&T, 82%
Exxon Mobil, 63%
General Electric, 70%
Proctor & Gamble, 59%
ATK, 71%
Catepillar, 68%
Lockheed Martin, 67%
Raytheon, 72%

ATK is Alliant Tech in Goleta, CALSTRS is the CA teachers pension, CALPERS/PERF is the CA state pension (PERF is their largest plan), Raytheon and Lockheed are in Goleta, and SBCERS is the SB County pension.

Based on my (painful) review of annual reports, I don't see much difference between the health of these selected public & private sector pensions (although CALPERS is exceeding the average).

EastBeach (anonymous profile)
April 14, 2013 at 6:39 p.m. (Suggest removal)

CALPERS is above average for now, but just wait. It's a time bomb waiting to go off. The numbers that EB just gave don't include the Stockton bankruptcy.

If Los Angeles and other cities declare bankruptcy as well, CALPERS is in a serious hole. This is only going to get worse over time.

Botany (anonymous profile)
April 14, 2013 at 6:49 p.m. (Suggest removal)

It's the economy, stupid!

The truth of the matter is pension plans, both public and private, have been suffering because of the poor investment climate of this century. This is from last year prior to the recent runup we've had in the markets:

Over the past 15 years, the S&P 500 rose at an annual rate of less than 5 percent, even with dividends reinvested. There hasn't been such a poor 15-year investment period since 1945. Bonds have also done poorly during the last 15 years, though not as bad as equities.

If you want to blame someone, blame the investment banks, lack of regulation in the financial markets, and all the politicians who didn't learn anything from the 2007 recession (or who are still in the pockets of the financial engineers).

EastBeach (anonymous profile)
April 14, 2013 at 6:50 p.m. (Suggest removal)

bring back Glass-Steagall, let Sen E. Warren in Senate help regulate the banks, ... EB's correct that it isn't just pension plans that are the problem, far from it.
poor infrastructure, poor public education, poor public transportation, way-too-expensive health plans...there is LOTS of work ahead. Let's prime the economy with renewed gov't spending, not so much worrying about ooh, the debt crisis.

DrDan (anonymous profile)
April 14, 2013 at 7:18 p.m. (Suggest removal)

@Botany - Stockton's bankruptcy just happened last week, so any impact on CALPERS funding levels is obviously not included in last year's annual report.

Also not included would be the huge rise in the markets over the last year. Based on my reviews, most of these pensions have larger equity positions than you'd expect (which is worrisome).

BTW, if the California Public Policy Center, sponsor of the "Unionwatch" website, is really non-partisan as it claims, then pigs have finally sprouted wings. That site has a politically-driven agenda obvous to anyone who read it. At least the Heritage Foundation plays it straight and tells you what they really want.

EastBeach (anonymous profile)
April 14, 2013 at 7:27 p.m. (Suggest removal)

I wish Elizabeth Warren were President.

Ken_Volok (anonymous profile)
April 14, 2013 at 7:46 p.m. (Suggest removal)

Stockton only went into bankruptcy last week. Sorting out the issues will probably take years before conclusion about CalPERS obligations and sanctity of of the Stockton municipal employees contracts are settled.

The markets rose and the state pension funds bragged they did recoup their immediate investment losses, but this still does not affect their massive unfunded liabilities which allegedly reach into the multi-bliiions if not trillions.

The pension funds recent departure into social engineering investments betrays their fundamental fiduciary obligations to their recipients, and puts their entire status in jeopardy as protected fiduciary funds. This may trip them up in the Stockton bankruptcy case.

They are still promising close to 8% returns in their actuarial analyses and not getting close to that to sustain the level of promised payoffs. And many of their "green" investments have also failed. The recent corruption and conflict of interest charges against these fund board of directors is equally disturbing if they are to retain their fiduciary protections as qualified pension funds.

And why should they care if win or lose on their investments because they know they can fall back on the taxpayers to make up any deficiencies when it comes time to make the defined benefit payouts to their pensioners. This is about as sweet as it gets, if it did not leave taxpayers on the hook so these special pension rights get fully funded at our expense.

Gobbling up hundreds of thousands of dollars and even millions of dollars of local entity budgets lately to make up the failed pension pay-out deficiencies is the unsettled problem that neither the state legislators, the governor nor the pension funds have faced. The Stockton bankruptcy will be forcing their hand when this settles out. There are plenty of very curious people following this case.

The entire state public pension Ponzi scheme needs restructuring for the pension recipients as well as state taxpayers. It is a justice issue. Fixed income people on social security stuck with paying for increasingly lavish public employee pensions is just one of the ticking bombs out there. The young people like this original letter writer is also reaching a critical mass of backlash as well.

Most of this can be solved simply by converting to defined contribution plans like 401K. Done, no more up and down trauma. No more robbing present workers to pay past workers. Everyone knows during their working career how they have to save for what kind of retirement lifestyle they want to enjoy. There is no other way.

foofighter (anonymous profile)
April 14, 2013 at 8:37 p.m. (Suggest removal)

Private companies that have pension funding deficits do not go to the taxpayers to make up their deficiencies. Public pension plans do.

Those stats you just posted about CalPERS and CalStRS should be alarming you. THIRTY PERCENT underfunded and you think this is okay?

Tell that to the folks on fixed incomes or students who have to pay tuition of those dependent upon present government services. Nope, can't do it because we have to make up THIRTY PERCENT" revenues to pay former government employees who are no longer working. They get the money instead.

Who is feeding you this garbage.

foofighter (anonymous profile)
April 14, 2013 at 8:47 p.m. (Suggest removal)

Indeed private companies do come to the taxpayers: AIG, all the major banks, the auto industry, all come crying to the taxpayers but won't give the same taxpayers any breaks or even a fair game.

Ken_Volok (anonymous profile)
April 15, 2013 at 1:04 a.m. (Suggest removal)

Foo Fighter could be Dave Grohl, Nate Mendel, Taylor Hawkins,Chris Shiflett, or Pat Smear. They are all Foo Fighters.

billclausen (anonymous profile)
April 15, 2013 at 4:05 a.m. (Suggest removal)

foo, there are LOTS of other ways, versus your statement" Most of this can be solved simply by converting to defined contribution plans like 401K" -- too bad it's not that simple. And the pension scene isn't as dire as you indicate.
As EB and others have stated, "if you want to blame someone, blame the investment banks, lack of regulation in the financial markets, and all the politicians..." The solution isn't nearly as simple as your 401K idea, which besides being immoral (it robs workers who have already paid into the defined-benefits program for YEARS), it will not win in the courts, whatever the Stockton ruling.
Foo, yo ah foo when writing "Private companies that have pension funding deficits do not go to the taxpayers to make up their deficiencies. Public pension plans do." DUH! that is the definition of a public pension, ya foo!
Anyway, only 15% of American workers are no in guaranteed defined-benefits plans so why are you so worried?? Oh yes, gotta protect the 1%, your game is obvious, foo.

DrDan (anonymous profile)
April 15, 2013 at 6:13 a.m. (Suggest removal)

Stay focused. Do private companies have in their pension contracts the automatic right to have tax payers make up any pension plan investment deficiencies?

Using the singular AIG or the GM debacle is not germane to the present condition of state public employee pension funds. Built into the public worker pension plan's fundamental structure is the automatic ability to put the state taxpayers on the hook for additional money, any time and any amount.

When it comes to CalPERS and CalSTRS, no fiscal meltdown or crisis is needed; any failed promise or poor investment strategy they choose to embark upon is automatically covered by the taxpayers.

The arrangement must be reformed so that pension recipients can be more securely covered and present state needs will not be cannibalized in the future to pay for past worker's pensions.

There is nothing wrong with this. Just do it. Convert defined-benefit plans to defined-contribution plans, like 401K plans which are now the standard in private industry.

Just read about the city budget in today's NewsPress:

"While the fiscal condition of the General Fund has greatly improved, some challenges lay ahead, including -----****continued increase in retirement costs****----- and significantly underfunded capital needs."

Nothing could be clearer: growing obligation to past city workers is devouring the city's ability to take care of present needs. City pensions plans need to be reformed so we are not paying for past performance in the face to greater and greater present needs.

foofighter (anonymous profile)
April 15, 2013 at 8:57 a.m. (Suggest removal)

BTW: the above quote in the SB NewsPress was from Robert Samario, City of Santa Barbara Finance Director.

foofighter (anonymous profile)
April 15, 2013 at 9 a.m. (Suggest removal)

yeh, foo, you try to "Stay focused."
I've already responded to your question, "Do private companies have in their pension contracts the automatic right to have tax payers make up any pension plan investment deficiencies? "
Answer is in "the definition of a public pension" -- it's part of the government(s), whatever layer. You are a capitalist and free market fundamentalist, why would anyone who has worked many years give up his/her right to the defined benefit public pension, for the reduced money of 401(K)?! That's nonsensical and it won't happen, and no worries re Stockton.

DrDan (anonymous profile)
April 15, 2013 at 11:16 a.m. (Suggest removal)

Stay focused. No one is asking at this time those vested in the prior system to give up anything. That dog don't hunt no more.

However, the unanswered question looming with Stockton is if there is no money, there is no money.

Liquidating Stockton, selling off its assets and reverting the former city to the county will provide only one time money. Then what? Who pays CalPERS for the next decades until the last vested pension beneficiary dies?

What terms will the County take on the City of Stockton's if it is liquidated now failed pension obligations. Or will the "taxpayers" automatically get stuck with bills they did not create.

Or will Stockton's pensions even be called pensions, instead of an imprudent Ponzi scheme deserving no protections at all. The Stockton bankruptcy is a long way from getting settled but it will be precedence for all the other jurisdictions teetering on the edges themselves.

I would recommend a Plan B for all those now planning on their public defined-contribution plans. Return of capital may be all one can expect to get, if the pension promises do get thrown out in the Stockton case.

Look at it this way, if SS beneficiaries and secure investments are at a zero rate of growth today for most private pensioners, should taxpayers be asked to pay public employee pensioners a much higher rate of return, out of their own fixed and stagnant income pockets?

Or should young people now stuck in minimum wage jobs be also asked to make these additional payments too just for the benefit of defined-benefit public pensioners? This is a justice and equity issue.

All of this trickling out of schools and cities who are losing present services because of increasing public pension demands for past workers, these are the taxpayers on the hook I am speaking about. How much more of present services should we sacrifice to support failed public pension obligations we did have any role in making?

Over-promising started in 1999 - the go-go stock market years, and the bills are now due in the stagnant economy years. This is an inherent mis-match and needs to be remedied, so this never happens in the future.

In a defined-contribution plan the recipient can gamble in the go-go years. but the present taxpayer is no longer on the hook if those gambles fail.

foofighter (anonymous profile)
April 15, 2013 at 11:51 a.m. (Suggest removal)

stay focused, foo, your long message is completely unconvincing, over-rehearsed, and anyone who would accept a 401(k) over his/her guaranteed pension is obviously a financial idiot. You plan to stick it to the young, as I read this. And you want to scare people by saying, oh, it will in the end be between "the schools" (the kids) and paying these old folks' defined benefit pension. Shame on you.

DrDan (anonymous profile)
April 15, 2013 at 6:03 p.m. (Suggest removal)

Dr Dan, you lost me. I can't figure out what you just said.

Others are working on this who have sorted it all out. And Stockton's bankruptcy will bring a lot more of these issues to a head.

In honor of Maggie Thatcher, we actually ran out of spending other people's money. This was forecast when the big public pension promises were first put on the table back in 1999.

That time has now come 14 years later and those pension promises are now due to be paid out, and CalPERS failed to meet their investment expectations to support those 14 year old promises. Do they (1) turn this into a FIFO Ponzi scheme or (2) is there a way to save the whole thing for everyone, or (3) pack up the tent because as public pensions as they are now set up, simply will not be able to meet their projected goals.

This is not a new issue or one that can be insulted or attacked away. It is actuarial certainty. What is new with the Stockton case is legally how much wiggle room is there when as in Stockton's case, they actually did run out of spending other people's money.

Too early to say how this will all play out, but it is now in play.

foofighter (anonymous profile)
April 15, 2013 at 7:53 p.m. (Suggest removal)

@KV - Wall Street is afraid of EIlizabeth Warren.

EastBeach (anonymous profile)
April 15, 2013 at 10:38 p.m. (Suggest removal)

I recognize the ranting and semantics now. I bet foofighter and Oblati are the same person.

EastBeach (anonymous profile)
April 15, 2013 at 10:52 p.m. (Suggest removal)

ahhh, you nailed it, EB!
and foo, STAY FOCUSED brother; keep waiting on Stockton so your vision of ripping off young employees can come to fruition...NOT!

DrDan (anonymous profile)
April 16, 2013 at 5:14 a.m. (Suggest removal)

Today's NewsPress letters claims "Teachers earned their pensions". Let's take a look at the math that attempts to support that statement.

Pew Charitable Trusts claims the average CalSTRS pension per teacher is $53,000 a year - or $1000 a week for life. Did teachers put the investment equivalent of $10000 a week into their retirement funds to now justify this return on their investment?

Or did CalSTRS inflate the rates of promised returns to justify this $1000 a week payout for the rest of the teacher's life?

The difference between (1) the money coming in (the teachers alleged share from their approx $15,000 health insurance and pension benefits package on top of the average $67,000 a year salaries) and (2) CalSTRS failed investment strategies is the massive "unfunded liability" we keep hearing about.

California taxpayers are required to make up any difference between the money taken in during teacher's 9 month working years and any short-falls CalSTRS has, when it comes time to pay back the $1000 a week to those same teachers for the rest of their non-working lives.

Since this letter writer also feels compelled to tack on the ubiquitous "fat cat investment banker" diatribe at the end of this very nice buzz word letter, you can be certain this line of reasoning comes from the teacher union interests.

The letter writers interest is not to make his case with any sound fiscal analysis , but to deflect scrutiny of CalSTRS failings and establish blame somewhere else.

CalSTRS pension reform which is best for all concerned means converting all non-vested pension plans to defined-contribution plans which are the 401K standards in the private workplace.

And hold our noses while we finish paying off the unsustainable defined-benefit plans now paying out $1000 a week to retired teachers, who only put in a small fraction of that amount into CalSTRS from their 9 month compensation package.

The responsibility for a secure retirement for a very select group of heavily lobbied public employees should not be borne solely by the taxpayers, who rarely get $1000 a week in retirement themselves.

Nor should taxpayers be continually dunned to make up the investment deficiencies of CalPERS whose former directors and CEOs are currently under investigation for wrong-doings while at the same time drawing the cloak of secrecy even tighter around their growing string of failed investment policies.

It behooves all voters and taxpayer to pay far more attention to this ongoing war foisted upon them by the almighty powerful teacher union lobby, and the darkly sinister doings of the CalSTRS pension fund.

(CalPERS, the retirement fund for non-teaching public workers suffers similar unfunded liability deficiencies)

Californians ask for public employee pension reform now.

foofighter (anonymous profile)
April 16, 2013 at 7:49 a.m. (Suggest removal)

Correction in second paragraph:

Did teachers put in the investment equivalent of $1000 a week (not $10000) for 52 weeks out of their 9 month year compensation package to merit now getting $1000 a week pension for life?

foofighter (anonymous profile)
April 16, 2013 at 8:21 a.m. (Suggest removal)

The intangible benefit converting all non-vested public pension plans to defined-contribution pension plans (like 401K plans) is theses employee's reinvestment in the US economy as makers, rather than just takers.

foofighter (anonymous profile)
April 16, 2013 at 8:38 a.m. (Suggest removal)

The irony of the teachers unions bashing Wall Street and corporate America is of course ironic when CalSTRS depends so heavily on maximizing returns from exactly those same sources in order to support their generous teacher pension payout promises.

Trying to have it both ways: intellectually disinvesting in the US economy and caring less about actual returns in lieu of questionable social programming, while passing off any resultant investment losses to the California taxpayers is an inherent corruption of the CalSTRS (and CalPERS) fiduciary pension plans.

foofighter (anonymous profile)
April 16, 2013 at 8:58 a.m. (Suggest removal)

like the rest of your tendentious screed, this also makes no sense " theses employee's reinvestment ...".

DrDan (anonymous profile)
April 16, 2013 at 9:06 a.m. (Suggest removal)

"Sorry if I responded to what you said rather than what you would have said had you said something else." _pk

Submitted for consideration as Independent Online Comment of the Year, 2013.

equus_posteriori (anonymous profile)
April 16, 2013 at 12:46 p.m. (Suggest removal)

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