-- Connecting the dots between our economy, government and business --
Summary and audio linked here.
Chicago’s political leadership is floating a pension buyout program as evidence it is seriously addressing the city’s thirty-six-billion-dollar unfunded pension liability, but Mark Glennon, founder of the Illinois policy research organization Wirepoints, said that the proposal moves debt from one column to another rather than reducing it, and that the broader fiscal picture facing the city continues to deteriorate across every measurable dimension. Audio here.
Expect no retraction or apology. This what they do.
The state’s existing buyout program for its own pensions is the precedent for Chicago, which should be a warning: Look out for similar exaggerated claims and shoddy analysis.
Full interview and summary linked here.
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Yes, this is the most disgusting COVID-19 bailout yet. But be patient, Illinois Democrats will stoop lower
What I don’t understand is why the State continues to offer the defined benefit pensions to new employees.
Because the state prefers to exploit them. All new hires since 2010 are in Tier 2, which is grossly unfair to them. They are required to fund, on their own, not just their own, entire pension but an additional amount to subsidize the Tier 1 fat cats. The entire unfunded pension liability is for work already performed by Tier 1s.
I know quite a bit about Tier 2 (-: The funny thing is that since the CPI has been so low (argue about that all you want), the increase in the maximum Tier 2 salary, or the % on which the final pension is (the basis number) was 119k as of last year. As you know, this is much less than the SSA top number which is near 138k at this point. But Tier 1, apart from the unrestricted Tier 1 (hires before 2004 I believe with no maximum cap) is 280k as of 2019. You can see that if… Read more »
“I would argue it’s safe to say that the USD will be inflated to a minimum of 1/3 its current value by 2040.” If one assumes an average inflation rate over 20 years of 5.6% the result is 2.97357135153, meaning that a dollar now would be worth roughly a third of its current spending value at that time. So, do you think it likely that inflation will average 5.6% over the next 20 years? I don’t find that an impossibility given current federal government spending and the likely inflationary result eventually. A few low-inflation years may be followed by loss… Read more »
Many municipalities (not to mention state government) are already living hand-to-mouth or borrowing money to meet current expenses. Full contributions to already underfunded systems can’t be made if municipal government responsibilities are to be met. Paying full pensions and health care out of the systems points to empty buckets in a few years or less. Many workers are also living hand-to-mouth and have virtually no liquid assets from which to pay more taxes. “The Virus” has pushed intractable problems becoming even harder to fix. I don’t know how we plan for inflation and deflation at the same time. Home values… Read more »
Yes, if you notice, inflation or deflation has been sector specific, even in America for decades. The most inflated sectors have been health care, housing, and universities. These are quite obvious. Technology, good weather, and lack of calamities for decades has also created deflationary pressures on consumer goods and food. To a certain extent, oil prices too. Expect these all to flip flop given the future policy directions. Mostly, the middle class will get hurt the most as a general rule — as always in progressive/leftist paradigms, where power trickles up. So what will we see? Higher energy and food… Read more »
Yes, this is a whole new ballgame.While it is true that other world currencies/countries are also going to be printing money, there hasn’t been a time in the world in which most of the world was at 0% interest rates, or negative, and these are the advanced economies, including our own, which is currently the world reserve currency. That enables us to get away with a few things for now, but there are always prices to pay, tradeoffs, unintended consequences — or all of the above. Note that the purchasing power since 1980 of the USD has decreased by a… Read more »
Mark. Don’t forget there are still Tier 1 employees hired before 2010 that have not retired yet. If you were hired in say 2005 or 2009 you are Tier 1 and still get all the perks that Tier 2 do not get. You could work till 2025 or 2035 as long as you are 55 and still get those outrageous pensions for another 30+ years or at least till 2065. I think my numbers are close. All depends on what age you were when hired and done before Dec 2010.
Right.
What about everyone else’s retirement savings would part of this payment cover us too? Hey how come no government workers got laid off like so many private workers? Would part of this payment cover unemployment? Surely you’re not saying the state would actually use the money to perpetuate a constitutionally protected Ponzi scam or something totally unrelated to the virus impact?
These lowlife scum have no shame nor morals
Jeez, I’m actually crying into my whiskey as I read this. I need another hit off my disposable vape just to process this; and I think I’ll eat another gummy, or three gummies, just so I don’t kill myself.