As opposed to the elected political leeches who want to use taxes slash the paychecks of people who work for a living? Politicians who aren't even honest enough to represent the true cost of the pensions they're paying up front, instead assuming a 10% return on investment every year forever and let the next council candidate make the unpopular decisions and deal with the crisis when they end up like Stockton and Detroit?
(Or perhaps we can imagine that every single state or municipal pension system can make up the shortfall by taking money from all the billionaires they have lying around. Ha.)
I'll tell you what, though. The "billionaire-financial leech" is spending money that he already has on a cause, and he will never see it again. The politician is spending someone else's money, and as thanks for this, he will earn campaign contributions from the relevant unions. Draw your own conclusions.
John Arnold made money trading - a zero sum game by definition. All of that $4 billion is wealth that was extracted from somebody else.
Probably some of it from pension funds.
He is now using that money to lobby politicians to strip wealth from the working classes. He is paying PR companies to burnish his image for doing so (this article did not come out of nowhere).
What. a. hero.
>Or perhaps we can imagine that every single state or municipal pension system can make up the shortfall by taking money from all the billionaires they have lying around.
Yes, god forbid we should consider raising taxes on the 0.01% and using it to pay pensions for the working classes after they had so much of their money stolen by rapacious oligarchs like him.
Have you actually tried to calculate how much money you could raise if you increased taxes on the richest 0.01%? And have you checked how much money is necessary to pay out pensions in the future?
The top 0.1% have as much as the bottom 90% (which includes housing wealth as well as pension wealth).
So you could raise rather a lot more than you needed, actually.
Raising those taxes will also significantly drag down the cost of property (and consequently rents) which is the main outgoing for lower and middle class families.
I honestly doubt we can raise the marginal tax on income (even just income over $1M a year) to over 50%. Not in the foreseeable future at least as far as the US is concerned.
It's already over 50% in CA (as well as various other places).
39.6% (Fed) + 12.3% (CA) = 51.9%
There are city taxes as well in some places, for example add an additional 1.5% to that if you live in SF.
Thinking about this, I suppose that the fact that you can deduct state taxes on your fed taxes brings this down a bit so maybe it does dip below 50? Not sure about the math. Real close though.
The deduction you can make on your federal taxes for state taxes paid vanishes once you're in AMT land which you almost certainly are if you're in the 39.6% tax bracket.
If you're paying the AMT the 39.6% doesn't apply. The top AMT rate is 28%.
Whether you pay the AMT or not isn't really based on how much money you make. It's based on how many deductions not allowed under the AMT you take (deductibility of state taxes being the biggest one).
That article is discussing wealth (net worth) versus the article you cited which discusses income. No surprise that the lines between rich and poor differ when you measure it different ways.
One question: aside from arguing the specific numbers, it is irrefutably true that a small minority hold the majority of the money, and it is widely reported that the gap is currently growing, not shrinking. Is this a good thing? Do the specific numbers change the outcome or what our course of action should be? Even that Vanity Fair article concludes the situation is bad.
I don't disagree with your numbers, or with the notion that accuracy is important. But just for fun, what, exactly, is the difference in course of action you would take given his numbers versus Vanity Fairs'?
To make my point more clearly, you (and vanity fair, and Wikipedia) say the top 1% is two orders of magnitude larger than its relative size (40x). Some claim, and Vanity Fair doesn't exactly refute that the top 1% are two orders of magnitude larger than its relative size (90x). Crdoconnor appears to have misquoted by one order of magnitude, saying that the unfairness ratio is three orders of magnitude (900x).
So, ignoring crdconnors accidental misquote, and playing devils advocate for a moment, what substantive policy decisions should differ across the line between two orders of magnitude inequality versus three?
The breadth of the tax base necessary to support the pension plans in question (or, for that matter, broad swaths of other social policies on the liberal agenda) is much wider than is implied by misreporting of the degree of inequality.
Put more simply: Just taxing the rich more isn't enough to pay for everything.
"In terms of wealth rather than income, the top 1 percent control 40 percent."
That doesn't seem to contradict anything said up-thread.
If the top 0.1% control 20% of the wealth, the next 0.9% control another 20% of the wealth, and the bottom 90% control 20% of the wealth, then the claim you objected to is true. That would mean the remaining 9%, between the top 1% and the bottom 90%, control the wealth that remains - 40%. I don't think these amounts violate any of the ordering constraints, given the relative size of the groups; in reality there will be variation within the individual groups, but if we assume there isn't the math checks out fine: 20/0.1 > 20/0.9 > 40/9 > 20/90
I'm not saying the original claim was correct - I don't know. Just that what you quoted doesn't refute it.
And that's really the most interesting thing to talk about here. Not what's right and wrong but the degree to which I've properly quoted evidence to support my pov.
Your position that is data matters, as long as we don't pay attention to what it actually means?
You accused someone of being wrong "by an order of magnitude" and the "evidence" you produced did not even demonstrate that it was likely that they were wrong. If the data matters, fucking understand the data.
I'm just not really interested in doing the legwork to provide you with perfectly cited sources. This is Hacker News not the US Congress. You know how to use Google.
In general, evidence provided in discussion is more useful if it's likely to be called out when it is invalid or irrelevant, so I called it out - giving my reasoning.
You might not be wrong. You manifestly don't understand the data. Observe that, learn from it, update your confidence.
"I'm just not really interested in doing the legwork to provide you with perfectly cited sources."
I was not disputing the citations of your sources, and I wasn't demanding perfection. I was demanding that what was provided as evidence that someone was wrong "by an order of magnitude" actually be evidence they were wrong at all.
"This is Hacker News not the US Congress."
Exactly! So we're agreed that we should expect at least a modicum of decency, and respect for argument and informed discussion?
"You know how to use Google."
I do, and I know that it doesn't do a very good job answering these kinds of questions.
I engaged more deeply with your evidence (including the article you drew it from) precisely because I hoped it would inform me in the ways you'd indicated that it should. I was left disappointed.
Unfortunately, you seem quite a bit more interested in rhetoric and posturing than in actually engaging intellectually, so unless your replies are inordinately better than those above I won't be responding further.
Setting the numbers aside for a moment, a wealth tax would definitely have a large effect.
It's a somewhat extreme measure by the standards of modern tax schemes though, and it would cause a much higher number of super wealthy people to expatriate than just raising income and capital gains taxes would.
> The top 0.1% have as much as the bottom 90% (which includes housing wealth as well as pension wealth).
Even assuming tapping billionaires' wealth is a zero-impact answer, that doesn't necessarily help you if you're in a random municipality which has overpromised on its pension plan. As one example, take San Jose, which is Bay Area but not prime Bay Area (and beginning to see pension problems) and could easily see its richest citizens moving a few cities away to somewhere like Cupertino or Mountain View if it means a 5% savings on income tax. And what of cities like Stockton, CA, which was already bankrupted by its pensions and doesn't exactly have a bevy of billionaires to tap?
I guess you could hope for the day that the federal government decides to send a bunch of its money to your own local government, but the rest of the nation is likely to resent that so they might not approve of the measure.
That's an article about high-tax states like California and NYC. In the case of San Jose you can move literally five miles, work the same job, have the same friends, even shop at the same places that you did before, but have a different tax regime.
I'm pretty sure that people on pensions are in fact not working.
Also, it's the people "who work for a living" who are forced to pay for these pensions. Someone who sat in a cushy DMV job for 30 years working 40 hours a week gets a better retirement than I will ever have? No thanks.
The pensions system for US public workers does seem quite broken to me. Letting politicians with a relatively short term view control investments that have to realise a return in thirty or forty years is a recipe for disaster.
The same can be said for private companies. The difference is that private companies are allowed to weasel out of their obligations and the federal government picks up their pension responsibilities... https://en.wikipedia.org/wiki/Pension_Benefit_Guaranty_Corpo...
Which is one reason that most private companies now offer defined contribution plans rather than defined benefit plans. That way a worker isn't dependent on the foresight, goodwill, or even existence of his past employer for his retirement. It is a far better for everyone involved. And if workers are nervous about investing these contributions into risky instruments they can use them to buy deferred annuities from AAA rated insurance companies and build their own "pensions".
> buy deferred annuities from AAA rated insurance companies and build their own "pensions".
Which, in a post-financial crisis world, also obviously involves relying on government-backing of the insurance companies and bailouts when ratings agencies hand out AAA ratings like candy. Ultimately, only the government can guarantee people a retirement. Which is why I personally think we should say "screw it" and just guarantee everyone a reasonable (livable) payout from social security...
I think you may be conflating AAA rating of a security with AAA rating of a company. It is an easy mistake to make because the rating companies have deliberately conflated the two in order to sell more structured products rating services.
In contrast to the structured products ratings, the corporate ratings have held fairly well. For life insurance subsidiaries, which are the units that sell annuities, there is even further protection. The law requires insurance subsidiaries to be bankruptcy remote from their parents, and regulates the types of risks they can take on.
To take a famous example, even if AIG had been allowed to go bankrupt, it's life insurance subsidiary -- American General Life Insurance Company -- would not necessarily have been insolvent, and indeed retrospective analysis seems to indicate it would have been fine.
I should mention that all this safety comes at a cost, implied return rates for annuities aren't terribly impressive. But that's the nature of the beast, return and risk are proportional.
> And Arnold, a moderate Democrat who believes a rich country like the U.S. should provide a high safety net for its citizens, sees the stakes as being no smaller than the survival of the very governments that provide that net.
Pensions are going to be an issue that deeply divides younger and older liberals. State and local governments face existential crisis. Meeting pension obligations is going to require trading away the future prosperity of these places. What young millenials will want to move somewhere they have to pay high taxes, but get few services in return because all that money is going to paying pension obligations?
It's also going to be a major headwind to the trend of millenials moving back to urban areas. Cities have particularly screwed up their finances. E.g. Georgia pensions are pretty well funded, but Atlanta's is a disaster. As millenials get older and have kids, the cuts to public safety and education that will be necessary to meet pension obligations is going to drive many of them to the suburbs.
When the financial sector is in trouble, they get given virtually unlimited bailout money and they have interest rates set to accommodate their desires.
When municipalities and pension funds are in trouble they are told to go fuck themselves.
Yes, the rich who get their pensions and the poor young people who have to pay for them. Unless we get truly spectacular growth in the next 20 years something is going to break.
- sun-belt city has a lot of young people moving to it, not so many kids, not much infrastructure
- city hires young workers, builds infrastructure, assumes a high return to pension funds
- city has older people over time, more kids, more infrastructure, needs to raise taxes
- taxpayers resist, city assumes even higher return on pension funds, raids pension funds to balance budget
- early hires are ready to retire, pension is broke, taxes go up
- taxpayers move away to new city or suburb, sun-belt city faces rust-belt city dynamics and can't afford pensions
financial market returns have if anything been unusually good the last 30 years regardless of the crisis, volatility, financial sector shenanigans... if you see a true bear market like the 70s God help those new rust belt places.
whatever the problems with the financial sector, there's an unstable dynamic where new growing places have a virtuous cycle, and once you cross a threshold and growth slows, it reverses and you have a vicious cycle of decline.
Many of these cities that have declined and lost tax revenue have done so because the industry they surrounded upped and left to China/Central America.
The industry left for China because, again, the government is placing the interests of financiers over the interests of average Americans.
They do this by following a strong dollar policy (the polar opposite of China's weak yuan policy).
>The industry left for China because, again, the government is placing the interests of financiers over the interests of average Americans.
That's not so much the government as it is the companies doing the moving, it's all about the cost of labor and in developing countries that cost is a small fraction of a developed one, no matter what their currency policy.
The 'strong dollar' is only strong relative to other currencies, and is mostly strong because it is the reserve currency for many and the currency in which oil is being traded.
>That's not so much the government as it is the companies doing the moving,
The companies are doing the moving because the Chinese government pegs its currency very low and the US allows its currency to float very high.
There's nothing at all inevitable about all that ridiculously cheap stuff coming from China or those abandoned factories in Detroit. It's all the result of a set of very deliberate policy choices.
>it's all about the cost of labor and in developing countries that cost is a small fraction of a developed one, no matter what their currency policy.
If labor were all that mattered all of the new factories would be built in the middle of Bangladesh rather than in the Pearl River Delta. Their labor is far cheaper.
Most of the world has lower cost labor. The work goes to China specifically because it has infrastructure of a rich nation but the currency of a poor nation.
Even with that there is no requirement for us to trade with them.
US elites also made a deliberate choice to drop trade barriers with China despite the repressive nature of the country. Again, because it serves the interests of US oligarchs.
>The 'strong dollar' is only strong relative to other currencies
Bangladesh is definitely the site of a fairly impressive number of new factories. They don't have the tech expertise yet (that the Chinese do have now) so it will be a while but you can expect that they'll be moving up on the ladder soon enough. Lots of textile, shoes and other lower tech stuff already coming out of Bangladesh (and other countries besides).
Governments can influence their currencies only so much before they too become overstretched and their limits are tripped well below the level at which the developed/not yet developed part would no longer make sense. We're not talking about 10 or 20% here.
The work goes to China because right now for some goods that makes the most sense to companies that have the option to choose. But this does not hold true for all goods and it will not hold true forever.
There is absolutely no requirement for you to trade with them, simply stop buying anything made in China.
As far as the lack of trade barriers goes, wasn't the US the biggest proponent of a free market worldwide?
>Bangladesh is definitely the site of a fairly impressive number of new factories.
I couldn't see jack shit going on when I visited. Just clothing factories. Clothing always migrates to where the labor is cheapest because it is one of the least capital intensive industries and most labor intensive.
Even then it was only in the area around Dhaka (and close to the container port).
North of Dhaka there was basically nothing except poverty (which is pretty much what it's like in most of Central China, too). No infrastructure = no industry.
>Governments can influence their currencies only so much before they too become overstretched
What you meant to say was "governments can push the value of their currencies up only so much before being overstretched". Pushing them down isn't all that hard.
Right?
>As far as the lack of trade barriers goes, wasn't the US the biggest proponent of a free market worldwide?
A) There's no such thing as a free market. It's an economic fairy tale.
B) US oligarchs are big proponents for tearing down trade barriers. Union leaders not so much.
C) Just how much do you think they cared about destroying US industry in the process?
Clothing is how it starts. Not all that long ago Thailand was 'just clothing factories' and now they make a substantial chunk of the tech goodies shipped worldwide.
Not all that long ago, China could make clothing, basic machinery and some consumer goods that were not too capital intensive.
It's an incremental process.
> Just how much do you think they cared about destroying US industry in the process?
Not a whole lot. But then again, that's their prerogative under the system you have in place. If someone wanted to keep the jobs local and to exclusively source their half-fabricates from local producers under exclusive contract stating that they were required to maintain this all the way up their supply chain then such a person might have cornered the market against those willing to sell out your countries manufacturing backbone.
The most likely outcome of such a plan would have been bankruptcy. It's an arms race and everybody that buys 'made in China' stuff because it is slightly cheaper is complicit.
Thailand and South Korea used to be on roughly the same economic level in the 1970s. South Korea embraced protectionism. Thailand did not. One is a developed first world country and the other is a sex tourism destination.
It is indeed an incremental process. An incremental process some countries never begin.
>that's their prerogative
Why is it the prerogative of American elites to set trade policy that benefits them and fucks the rest of us over?
maybe. of course, China is currently pursuing a strong yuan policy. propping up the yuan amid massive capital flight. on current capital flows the yuan is overvalued. if you go to Shanghai you're not going to feel like you're in a super weak currency 3rd world country. you're going to feel like you're in boomtown Chicago of the late 19th century.
you don't want to have free trade and get cheap stuff from China, slap a massive tariff on them, you pay $2,000 for your iPhone, you deal with massive smokestack industries here, and of course become a manufacturing ghetto since you can't export anything if you refuse to import anything.
the flip side of strong dollar is a free lunch and influence since everyone around the world wants dollars. run a closed economy and forget about that.
in fact all of Silicon Valley is a product of globalization. Design in California, manufacture in Pearl River delta, sell globally, create a dominant tech culture and ecosystem, most of profits come back to California.
yeah, Wall Street is a problem, they're doing a few things like Dodd Frank, CFPB etc. to reduce the free lunch Wall Street gets, could do more.
honestly poor muni governance, idiots who refuse to pay taxes for services is a bigger reason pensions are broke.
>you don't want to have free trade and get cheap stuff from China, slap a massive tariff on them, you pay $2,000 for your iPhone, you deal with massive smokestack industries here, and of course become a manufacturing ghetto since you can't export anything if you refuse to import anything.
If my rent dropped by 5% and my smartphone price spiked to $2,000 I'd still come out ahead.
If this policy continues indefinitely eventually the US industrial ecosystem will be destroyed completely. When that happens China will abandon its "keep the yuan low" policy and your smartphone will suddenly cost $2,000 but the US won't have the expertise or the infrastructure to suddenly rebuild all its factories. That will take decades.
Then the US will end up like Argentina - a pale shadow of its former wealth.
If we turned into Argentina, it would be because of financial mismanagement and poisonous politics, not trade. Like rich people who don't want pay for a civilized society, impoverished masses, populism, breakdown of the social contract, violence and political thievery between the groups. I don't know how much you know about Argentina, but it takes generations of economic mismanagement, predatory politics, and violence to transition from a developed country to a developing country.
If a mercantilist trade policy was the only thing keeping the USA wealthy we're not going to stay on top anyway. You don't stay rich by trying to keep the rest of the world poor. That is the attitude that gets you to Argentina politics though.
It would be a shame if the richest country in the world were to say economic and civil liberties are great at home, but we're not going to lead by example and deal that way with the rest of the world.
Cheap yuan policy is history and has been for a few years, people don't seem to have caught up to that yet.
I have to add... trade REALLY has nothing to to do with why your rent is expensive. The chronic shortage of affordable housing is because it doesn't pay to build it or offer it because policy makes it not pay by design (stringent rules on lot size, height limits, number of parking spaces, room size, construction codes, property taxes etc.) because most communities don't want it and want to push it onto the community next door. There's a tendency to try to outlaw poor people resulting in a war on poor people, making it impossible for them to live.
The $15 minimum wage is another example of this 'war on poverty.'
Some countries make an effort to be let hard-working poor people live with dignity if not much wealth. But here they pay 15.3% FICA on the first dollar they earn, and then people rant about the 47% who don't pay taxes and should have 'skin in the game.' And communities are designed with no transportation, housing options for the poor.
Local/city governments assume pension obligations for local workers, the only pensions at the national level are for legislative representatives, judges, and defense department workers (to my knowledge; please correct me if I've left anyone out).
Most people owed pensions are solidly middle class. They are way better off than the young people who will be paying for them.
And blaming the financial sector for the pension crisis is ridiculous. States and municipalities entered into very risky financial arrangements because for years they made very optimistic actuarial assumptions about pension fund growth, and committed to benefits that could not be sustained once population growth plateaued.
Investing in those risky assets was a gambit to get the kind of returns they needed to stay solvent. That gambit failed, but financial companies didn't create the underfunding that led to the need to invest in risky assets in the first place.
You and crdoconnor are eloquently demonstrating the damage debt does to discourse.
Whatever your political slant, in this case it looks like class warfare, it can be turned against itself when debt starts limiting the degrees of freedom political action can take. Conservatives will do the same thing -- for them the argument will be something like "if we can't fund the national defense/LE, why do we need a government in the first place?"
Long term, this debt problem, whether local or national, is some nasty, radioactive stuff.
>Most people owed pensions are solidly middle class.
The middle class is gone.
>They are way better off than the young people who will be paying for them.
As opposed to the oligarchs who are trying to leech wealth from both groups?
>And blaming the financial sector for the pension crisis is ridiculous.
Did you read the link? What happened to Detroit was looting and fraud. Plain and simple.
>States and municipalities entered into very risky financial arrangements because for years they made very optimistic actuarial assumptions about pension fund growth
Optimistic == We assumed that interest rates would not be dropped to zero to bail out the financial sector. This was a reasonable actuarial assumption pre-2008 and it should have been a reasonable actuarial assumption post-2008.
>Investing in those risky assets
Investing in those risky assets largely happened after the government decided to drop interest rates to zero in order to bail out the banks. Much of it was also driven by un-prosecuted fraud.
Except when financial firms skim off of personal accounts with excessive fees. Or the fact that Social Security exists as a form of social insurance in the event you're unable to save enough or lose all of your retirement funds.
Your idea of only individual retirement accounts is a terrible one.
I don't disagree with you. My thesis is, it would be a terrible idea to switch pension systems like social security to individual accounts you're responsible for and could liquidate. That is not how insurance works!
> Pensions are an issue that divides rich and poor.
I am not rich, but I am young. And I despise the fact that I'm paying for retirement programs and pensions for people who just happened to be born at the right time with the right job.
It's fundamentally unjust that we're forced, by law, to pay for benefits we will never receive.
This is going to sound impolite, but I can't think of another way to put it: you've been had, you've fallen for the big con at work here, when you say you despise retirement programs and pensions.
I'm young-ish, I have no pension, I work for myself, and I'm definitely not well-off by any stretch. I have no horse in the pension game, except that I'm largely in the same boat as you (I'm guessing).
The difference is, I look at the people with pensions and I don't think, "oh those pension-holding fat cats". I look at them and think, what happened to the rest of us?
Why is it only the people whose decent standard of living was locked in by law or extensive contracts, why are they the only ones who definitely get to retire now?
There is a big con going on here, but it's not those folks with pensions, it's that the rest of us are now reduced to fighting over scraps.
Most of the private economy switched to individual retirement accounts (401Ks/IRAs) so that you don't have to depend on the ability of a private company that may or may not exists 40 years from now (when you retire) and you can instead depend on yourself.
Except, it obviously isn't working out in practice. People can't save enough, and it's not just down to a personal failing--it's systemic.
People can't save enough because our wages have been separated from our productivity--and kept down--for the last four decades. That's bigger than the individualistic "every man for himself" type of advice that "save some money" sounds like.
Besides, the realistic view suggests that something bigger is wrong, and something better should be done, when simplistic advice like that isn't working.
"People can't save enough" Saving has not been a problem for me and my family. Of course, I've forgone many purchases that others consider essential and we always look for bargains, use coupons, never carry a credit-card balance, etc. And if I feel my wage has "been separated from our productivity" I'm free to demand more or move on.
Pensions are a fundamentally stupid system. You shouldn't be depending on an employer to fulfill a defined benefit. Even if everything works perfectly (ie. the employer remains solvent and doesn't raid its pension fund), it provides a HUGE disincentive against pursuing job opportunities or entrepreneurship.
The solution is that everyone should be saving for themselves. I fail to see the "con" in people saving for their own retirement.
The con is that pensioners can use the threat of violence to force me to simultaneously save for my own retirement and pay for theirs when they never saved a penny.
Even if defined benefit pensions still existed, I would never get one as I have precisely 0 interest in working for the same employer 10+ years. I don't see why I should be forced to pay for people who are lifers.
Pensions are a fundamentally stupid system? Great, I can get behind that. So is employer-supplied health care. Let's replace them both with a real national pension system and a real national health care system.
You're right, people shouldn't have to depend on an employer for retirement (or health care)--that should be up to our government to provide us.
As for "violence," I have no idea what you're talking about, unless you're actually suggesting that the pensioners are wheeling their walkers up to you and shaking you down. Remember, taxation isn't violence.
The pensions seem great because they are too good to be true. [1] Many of the public pensions put people in the top quarter of household incomes. So at a time in your life when you aren’t working, your kids are through college, and your house should be paid off, you get a paycheck larger than most Americans. We can’t all be in the top 25% of incomes, nor should we when we aren’t working and the money comes from the government, but that’s the problem with the public pension system. I agree the majority of us are getting screwed, but there are multiple factors: runaway defense spending, never ending bank bailouts, etc, which also include public pensions.
>I am not rich, but I am young. And I despise the fact that I'm paying for retirement programs and pensions for people who just happened to be born at the right time with the right job.
>
>It's fundamentally unjust that we're forced, by law, to pay for benefits we will never receive.
This is the attitude American oligarchs have been trying to inculcate among the young. This was notably the goal of Pete Peterson's "the can kicks back" astroturfing campaign as well as Stan Druckenmiller's college campus campaigns, and even this neat piece of astroturf: http://www.quickmeme.com/Baby-Boomer-Dad/?upcoming
The idea is to keep young and old divided so that they will not form a cohesive political bloc that will not fight for each other's interests. The young will be complicit in strip-mining the pensions of the old. The old will be complicit in the absurd ramp up of student debt and the removal of pension rights from the young.
And you described the real crux of the problem—crony capitalism. The rich financial sector gets bailed out because they are politically connected. The public unions get bailed out with fabulous pensions because they are politically connected. And everyone without a political connection gets the shaft. Politicians take on more debt and kick the can down the road because the kids can’t vote.
The battle isn’t between pensions and the financial sector. That is infighting. The real battle is between the people paying into government and those getting money from the government.
actually the battle is between idiots who don't want to pay taxes and promote crappy weak governments, and everyone who benefits from having decent government and is willing to pay the price for living in a civilized society. if you're not willing to pay that price then you're the free rider.
I imagine very few people believe there should be no taxes. The question is more where those taxes go: wall street bailouts, wars in foreign countries, unaffordable pension systems, and how much is available, which clearly isn’t enough based upon the ever increasing national debt. It doesn’t seem to be ‘idiots’ vs. everyone, but more likely generation vs. generation. And having spent over a decade in the military with multiple deployments I can relate to idea of ‘free riders’ not ‘paying the price’, but again regarding taxes, I think most people are likely willing to contribute their share when it’s a fair amount and used responsibly. Determining what’s fair and how to use it is the challenge.
fair enough. the benefits of having a strong democratic government are so ridiculous that even if a massive chunk of it goes to waste you're still better off living in the country with a strong government than living in Somalia. and a shockingly large percentage of people in the US act as if the government is the enemy and cause of everything that's messed up. and a lot of time it's the same folks who think the government should be doing more surveillance, cops aren't using their authority enough, US should be world's policeman and invade/bomb more countries. go figure. everybody thinks the government should keep the other guy in line, tax the other guy, and give them the benefits and the services.
Don't get me wrong: I think income inequality is a huge problem. But how is Chicago promising teachers way more benefits than it can pay for a result of income inequality?
Lots of ways: Chicago's ability to pay (lack of political power to tax the rich), the dependence on deferred wealth (lack of real savings amongst teachers), politicians who don't have to respond to middle class people and can continually raid their pension funds.
Chicago is not a country. It's a city. It can't simply "tax the rich". If it does so, the rich will leave the city. When rich people claim they'll leave the country over small increases in taxes, we rightly mock them for making idle threats. But rich people don't even have to threaten to leave a city with unreasonable taxes. We know they can easily leave.
Someone upthread suggested that Detroit was an example of how unfunded pension liabilities were the product of looting and corruption. I submit that Detroit is a better example of how artificially provoked demographic shifts can kill a city. However corrupt Detroit is, nobody can argue that it was better off after "white flight".
Not sure; but health care has been one of the main avenues of wealth transfer in the US. Health costs grow faster than inflation, outcomes barely budge or worsen. The fact that people are being given more in health benefits means little if they are also paying their doctor twice as much for the same result.
My money says that sometime in the next 20 years, voters ask themselves "If I am paying in taxes as much as I think reasonable, and a huge chunk of that is going for promises made by people long out of office, I am being taxed, but where is my representation? Who can I elect, what can I do as a voter to ensure that funds go towards things I feel are in the best interests of society"
Not sure this is a liberal/conservative thing, although I'm sure it will be framed as such. At the end of the day, it is possible that the overall debt situation forces voters to either walk away from the debt -- or walk away from representative democracy. The two may not work together.
Of course, like everyone else I'm wrong about most every sort of prediction, but I note that Jefferson, observing revolutionary France, was quite concerned that inter-generational debt was quite capable of strangling any sort of revolutionary activity or peaceful refactoring of the way government works. I doubt his observations are any less accurate now than when he made them.
Pension reform makes me laugh. "Oh yeah, this is a massive contract we signed, we want to renege on it."
No corporation would stand by this in terms of major signed projects or debts without a massive fight. If renegotiation was required for payment to occur, either in the form of bankruptcy or reduced rates, then it would be a crushing asset grab, with no quarter given. The person who took on a contract they could not afford rightly should be squeezed to crap.
But because it's poor people, they are the ones who have to make the sacrifice when someone wants to renege on their contract?
Sure, with a company you can liquidate it and creditors can seize whatever assets are available. How are you going to do that with a city or a state? Is the city of Atlanta supposed to close up shop and hand over whatever assets it has to pensioners? Then what? Atlanta just continues on with no city government to provide public services?
There's a limited amount a city or state can raise taxes. If they're too high, wealthy people will just leave. It's not hard to move if you have money. It does screw over the poor people left behind who now have high taxes and no tax base to pay for government services.
Reducing the pension burden is exactly Arnold and others are trying to do. The result of that is that some people are not going to get the pensions they thought they were. That sucks, but it's better than dissolving the government altogether.
"Raise taxes and meet your obligations" And watch revenue and job generating companies move to locations with lower overhead making the situation even worse. It's not so simple as just raising taxes. For every action, there's an equal and opposite reaction.
Private industry has largely solved their pension problems by eliminating pensions and instead making contributions to an employee controlled 401(k) plan or similar. This eliminates some of the problems that come with pension plans, but at the cost of requiring some personal responsibility on the part of the individual employee.
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[ 3.3 ms ] story [ 99.4 ms ] thread(Or perhaps we can imagine that every single state or municipal pension system can make up the shortfall by taking money from all the billionaires they have lying around. Ha.)
I'll tell you what, though. The "billionaire-financial leech" is spending money that he already has on a cause, and he will never see it again. The politician is spending someone else's money, and as thanks for this, he will earn campaign contributions from the relevant unions. Draw your own conclusions.
Probably some of it from pension funds.
He is now using that money to lobby politicians to strip wealth from the working classes. He is paying PR companies to burnish his image for doing so (this article did not come out of nowhere).
What. a. hero.
>Or perhaps we can imagine that every single state or municipal pension system can make up the shortfall by taking money from all the billionaires they have lying around.
Yes, god forbid we should consider raising taxes on the 0.01% and using it to pay pensions for the working classes after they had so much of their money stolen by rapacious oligarchs like him.
So you could raise rather a lot more than you needed, actually.
Raising those taxes will also significantly drag down the cost of property (and consequently rents) which is the main outgoing for lower and middle class families.
39.6% (Fed) + 12.3% (CA) = 51.9%
There are city taxes as well in some places, for example add an additional 1.5% to that if you live in SF.
Thinking about this, I suppose that the fact that you can deduct state taxes on your fed taxes brings this down a bit so maybe it does dip below 50? Not sure about the math. Real close though.
Whether you pay the AMT or not isn't really based on how much money you make. It's based on how many deductions not allowed under the AMT you take (deductibility of state taxes being the biggest one).
False.
Some claim that the top 1% have as much as the bottom 90% but even that claim is disputed.
http://www.vanityfair.com/news/2011/05/top-one-percent-20110...
That article is discussing wealth (net worth) versus the article you cited which discusses income. No surprise that the lines between rich and poor differ when you measure it different ways.
I found that via: https://en.m.wikipedia.org/wiki/Wealth_inequality_in_the_Uni...
One question: aside from arguing the specific numbers, it is irrefutably true that a small minority hold the majority of the money, and it is widely reported that the gap is currently growing, not shrinking. Is this a good thing? Do the specific numbers change the outcome or what our course of action should be? Even that Vanity Fair article concludes the situation is bad.
"In terms of wealth rather than income, the top 1 percent control 40 percent."
> Do the specific numbers change the outcome or what our course of action should be?
Of course the data matters! Especially when (as crdoconnor did) you report data that is incorrect by an order of magnitude!
Jesus.
To make my point more clearly, you (and vanity fair, and Wikipedia) say the top 1% is two orders of magnitude larger than its relative size (40x). Some claim, and Vanity Fair doesn't exactly refute that the top 1% are two orders of magnitude larger than its relative size (90x). Crdoconnor appears to have misquoted by one order of magnitude, saying that the unfairness ratio is three orders of magnitude (900x).
So, ignoring crdconnors accidental misquote, and playing devils advocate for a moment, what substantive policy decisions should differ across the line between two orders of magnitude inequality versus three?
Put more simply: Just taxing the rich more isn't enough to pay for everything.
That doesn't seem to contradict anything said up-thread.
If the top 0.1% control 20% of the wealth, the next 0.9% control another 20% of the wealth, and the bottom 90% control 20% of the wealth, then the claim you objected to is true. That would mean the remaining 9%, between the top 1% and the bottom 90%, control the wealth that remains - 40%. I don't think these amounts violate any of the ordering constraints, given the relative size of the groups; in reality there will be variation within the individual groups, but if we assume there isn't the math checks out fine: 20/0.1 > 20/0.9 > 40/9 > 20/90
I'm not saying the original claim was correct - I don't know. Just that what you quoted doesn't refute it.
Really?
You accused someone of being wrong "by an order of magnitude" and the "evidence" you produced did not even demonstrate that it was likely that they were wrong. If the data matters, fucking understand the data.
I'm just not really interested in doing the legwork to provide you with perfectly cited sources. This is Hacker News not the US Congress. You know how to use Google.
You might not be wrong. You manifestly don't understand the data. Observe that, learn from it, update your confidence.
"I'm just not really interested in doing the legwork to provide you with perfectly cited sources."
I was not disputing the citations of your sources, and I wasn't demanding perfection. I was demanding that what was provided as evidence that someone was wrong "by an order of magnitude" actually be evidence they were wrong at all.
"This is Hacker News not the US Congress."
Exactly! So we're agreed that we should expect at least a modicum of decency, and respect for argument and informed discussion?
"You know how to use Google."
I do, and I know that it doesn't do a very good job answering these kinds of questions.
I engaged more deeply with your evidence (including the article you drew it from) precisely because I hoped it would inform me in the ways you'd indicated that it should. I was left disappointed.
Unfortunately, you seem quite a bit more interested in rhetoric and posturing than in actually engaging intellectually, so unless your replies are inordinately better than those above I won't be responding further.
It's a somewhat extreme measure by the standards of modern tax schemes though, and it would cause a much higher number of super wealthy people to expatriate than just raising income and capital gains taxes would.
Even assuming tapping billionaires' wealth is a zero-impact answer, that doesn't necessarily help you if you're in a random municipality which has overpromised on its pension plan. As one example, take San Jose, which is Bay Area but not prime Bay Area (and beginning to see pension problems) and could easily see its richest citizens moving a few cities away to somewhere like Cupertino or Mountain View if it means a 5% savings on income tax. And what of cities like Stockton, CA, which was already bankrupted by its pensions and doesn't exactly have a bevy of billionaires to tap?
I guess you could hope for the day that the federal government decides to send a bunch of its money to your own local government, but the rest of the nation is likely to resent that so they might not approve of the measure.
The richest citzens always make this threat but they don't actually follow through on it:
http://www.npr.org/sections/money/2011/04/29/135813061/studi...
Apparently if you tell a lie big enough and keep repeating it, people will eventually come to believe it.
And that still doesn't help Stockton.
I'm pretty sure that people on pensions are in fact not working.
Also, it's the people "who work for a living" who are forced to pay for these pensions. Someone who sat in a cushy DMV job for 30 years working 40 hours a week gets a better retirement than I will ever have? No thanks.
Which, in a post-financial crisis world, also obviously involves relying on government-backing of the insurance companies and bailouts when ratings agencies hand out AAA ratings like candy. Ultimately, only the government can guarantee people a retirement. Which is why I personally think we should say "screw it" and just guarantee everyone a reasonable (livable) payout from social security...
In contrast to the structured products ratings, the corporate ratings have held fairly well. For life insurance subsidiaries, which are the units that sell annuities, there is even further protection. The law requires insurance subsidiaries to be bankruptcy remote from their parents, and regulates the types of risks they can take on.
To take a famous example, even if AIG had been allowed to go bankrupt, it's life insurance subsidiary -- American General Life Insurance Company -- would not necessarily have been insolvent, and indeed retrospective analysis seems to indicate it would have been fine.
I should mention that all this safety comes at a cost, implied return rates for annuities aren't terribly impressive. But that's the nature of the beast, return and risk are proportional.
Pensions are going to be an issue that deeply divides younger and older liberals. State and local governments face existential crisis. Meeting pension obligations is going to require trading away the future prosperity of these places. What young millenials will want to move somewhere they have to pay high taxes, but get few services in return because all that money is going to paying pension obligations?
It's also going to be a major headwind to the trend of millenials moving back to urban areas. Cities have particularly screwed up their finances. E.g. Georgia pensions are pretty well funded, but Atlanta's is a disaster. As millenials get older and have kids, the cuts to public safety and education that will be necessary to meet pension obligations is going to drive many of them to the suburbs.
Pensions are an issue that divides rich and poor. This guy is rich. We are not. This article seems to be about him trying to destroy our pensions.
The so called existential crises were created by the financial sector he hailed from. They did not appear out of thin air. For example:
https://www.wsws.org/en/articles/2014/01/14/swap-j14.html
When the financial sector is in trouble, they get given virtually unlimited bailout money and they have interest rates set to accommodate their desires.
When municipalities and pension funds are in trouble they are told to go fuck themselves.
- sun-belt city has a lot of young people moving to it, not so many kids, not much infrastructure
- city hires young workers, builds infrastructure, assumes a high return to pension funds
- city has older people over time, more kids, more infrastructure, needs to raise taxes
- taxpayers resist, city assumes even higher return on pension funds, raids pension funds to balance budget
- early hires are ready to retire, pension is broke, taxes go up
- taxpayers move away to new city or suburb, sun-belt city faces rust-belt city dynamics and can't afford pensions
financial market returns have if anything been unusually good the last 30 years regardless of the crisis, volatility, financial sector shenanigans... if you see a true bear market like the 70s God help those new rust belt places.
whatever the problems with the financial sector, there's an unstable dynamic where new growing places have a virtuous cycle, and once you cross a threshold and growth slows, it reverses and you have a vicious cycle of decline.
The industry left for China because, again, the government is placing the interests of financiers over the interests of average Americans.
They do this by following a strong dollar policy (the polar opposite of China's weak yuan policy).
That's not so much the government as it is the companies doing the moving, it's all about the cost of labor and in developing countries that cost is a small fraction of a developed one, no matter what their currency policy.
The 'strong dollar' is only strong relative to other currencies, and is mostly strong because it is the reserve currency for many and the currency in which oil is being traded.
The companies are doing the moving because the Chinese government pegs its currency very low and the US allows its currency to float very high.
There's nothing at all inevitable about all that ridiculously cheap stuff coming from China or those abandoned factories in Detroit. It's all the result of a set of very deliberate policy choices.
>it's all about the cost of labor and in developing countries that cost is a small fraction of a developed one, no matter what their currency policy.
If labor were all that mattered all of the new factories would be built in the middle of Bangladesh rather than in the Pearl River Delta. Their labor is far cheaper.
Most of the world has lower cost labor. The work goes to China specifically because it has infrastructure of a rich nation but the currency of a poor nation.
Even with that there is no requirement for us to trade with them.
US elites also made a deliberate choice to drop trade barriers with China despite the repressive nature of the country. Again, because it serves the interests of US oligarchs.
>The 'strong dollar' is only strong relative to other currencies
What exactly did you think I meant by strong?
Governments can influence their currencies only so much before they too become overstretched and their limits are tripped well below the level at which the developed/not yet developed part would no longer make sense. We're not talking about 10 or 20% here.
The work goes to China because right now for some goods that makes the most sense to companies that have the option to choose. But this does not hold true for all goods and it will not hold true forever.
There is absolutely no requirement for you to trade with them, simply stop buying anything made in China.
As far as the lack of trade barriers goes, wasn't the US the biggest proponent of a free market worldwide?
I couldn't see jack shit going on when I visited. Just clothing factories. Clothing always migrates to where the labor is cheapest because it is one of the least capital intensive industries and most labor intensive.
Even then it was only in the area around Dhaka (and close to the container port).
North of Dhaka there was basically nothing except poverty (which is pretty much what it's like in most of Central China, too). No infrastructure = no industry.
>Governments can influence their currencies only so much before they too become overstretched
What you meant to say was "governments can push the value of their currencies up only so much before being overstretched". Pushing them down isn't all that hard.
Right?
>As far as the lack of trade barriers goes, wasn't the US the biggest proponent of a free market worldwide?
A) There's no such thing as a free market. It's an economic fairy tale.
B) US oligarchs are big proponents for tearing down trade barriers. Union leaders not so much.
C) Just how much do you think they cared about destroying US industry in the process?
Not all that long ago, China could make clothing, basic machinery and some consumer goods that were not too capital intensive.
It's an incremental process.
> Just how much do you think they cared about destroying US industry in the process?
Not a whole lot. But then again, that's their prerogative under the system you have in place. If someone wanted to keep the jobs local and to exclusively source their half-fabricates from local producers under exclusive contract stating that they were required to maintain this all the way up their supply chain then such a person might have cornered the market against those willing to sell out your countries manufacturing backbone.
The most likely outcome of such a plan would have been bankruptcy. It's an arms race and everybody that buys 'made in China' stuff because it is slightly cheaper is complicit.
It is indeed an incremental process. An incremental process some countries never begin.
>that's their prerogative
Why is it the prerogative of American elites to set trade policy that benefits them and fucks the rest of us over?
you don't want to have free trade and get cheap stuff from China, slap a massive tariff on them, you pay $2,000 for your iPhone, you deal with massive smokestack industries here, and of course become a manufacturing ghetto since you can't export anything if you refuse to import anything.
the flip side of strong dollar is a free lunch and influence since everyone around the world wants dollars. run a closed economy and forget about that.
in fact all of Silicon Valley is a product of globalization. Design in California, manufacture in Pearl River delta, sell globally, create a dominant tech culture and ecosystem, most of profits come back to California.
yeah, Wall Street is a problem, they're doing a few things like Dodd Frank, CFPB etc. to reduce the free lunch Wall Street gets, could do more.
honestly poor muni governance, idiots who refuse to pay taxes for services is a bigger reason pensions are broke.
If my rent dropped by 5% and my smartphone price spiked to $2,000 I'd still come out ahead.
If this policy continues indefinitely eventually the US industrial ecosystem will be destroyed completely. When that happens China will abandon its "keep the yuan low" policy and your smartphone will suddenly cost $2,000 but the US won't have the expertise or the infrastructure to suddenly rebuild all its factories. That will take decades.
Then the US will end up like Argentina - a pale shadow of its former wealth.
If a mercantilist trade policy was the only thing keeping the USA wealthy we're not going to stay on top anyway. You don't stay rich by trying to keep the rest of the world poor. That is the attitude that gets you to Argentina politics though.
It would be a shame if the richest country in the world were to say economic and civil liberties are great at home, but we're not going to lead by example and deal that way with the rest of the world.
Cheap yuan policy is history and has been for a few years, people don't seem to have caught up to that yet.
The $15 minimum wage is another example of this 'war on poverty.'
Some countries make an effort to be let hard-working poor people live with dignity if not much wealth. But here they pay 15.3% FICA on the first dollar they earn, and then people rant about the 47% who don't pay taxes and should have 'skin in the game.' And communities are designed with no transportation, housing options for the poor.
This is US-centric.
And blaming the financial sector for the pension crisis is ridiculous. States and municipalities entered into very risky financial arrangements because for years they made very optimistic actuarial assumptions about pension fund growth, and committed to benefits that could not be sustained once population growth plateaued.
Investing in those risky assets was a gambit to get the kind of returns they needed to stay solvent. That gambit failed, but financial companies didn't create the underfunding that led to the need to invest in risky assets in the first place.
Whatever your political slant, in this case it looks like class warfare, it can be turned against itself when debt starts limiting the degrees of freedom political action can take. Conservatives will do the same thing -- for them the argument will be something like "if we can't fund the national defense/LE, why do we need a government in the first place?"
Long term, this debt problem, whether local or national, is some nasty, radioactive stuff.
The middle class is gone.
>They are way better off than the young people who will be paying for them.
As opposed to the oligarchs who are trying to leech wealth from both groups?
>And blaming the financial sector for the pension crisis is ridiculous.
Did you read the link? What happened to Detroit was looting and fraud. Plain and simple.
>States and municipalities entered into very risky financial arrangements because for years they made very optimistic actuarial assumptions about pension fund growth
Optimistic == We assumed that interest rates would not be dropped to zero to bail out the financial sector. This was a reasonable actuarial assumption pre-2008 and it should have been a reasonable actuarial assumption post-2008.
>Investing in those risky assets
Investing in those risky assets largely happened after the government decided to drop interest rates to zero in order to bail out the banks. Much of it was also driven by un-prosecuted fraud.
That's the problem, isn't it. If you can use debt or a surplus to game the system, everyone loses at someone else's benefit.
If you want to force companies to support retirement, force them to pay into employee's retirement accounts.
The benefit of individual accounts is that they're a lot harder to raid or defund.
Your idea of only individual retirement accounts is a terrible one.
Uh, then choose a different financial firm? I have $100k+ in my brokerage and pay about $10 a year in fees...
I am not rich, but I am young. And I despise the fact that I'm paying for retirement programs and pensions for people who just happened to be born at the right time with the right job.
It's fundamentally unjust that we're forced, by law, to pay for benefits we will never receive.
I'm young-ish, I have no pension, I work for myself, and I'm definitely not well-off by any stretch. I have no horse in the pension game, except that I'm largely in the same boat as you (I'm guessing).
The difference is, I look at the people with pensions and I don't think, "oh those pension-holding fat cats". I look at them and think, what happened to the rest of us?
Why is it only the people whose decent standard of living was locked in by law or extensive contracts, why are they the only ones who definitely get to retire now?
There is a big con going on here, but it's not those folks with pensions, it's that the rest of us are now reduced to fighting over scraps.
Most of the private economy switched to individual retirement accounts (401Ks/IRAs) so that you don't have to depend on the ability of a private company that may or may not exists 40 years from now (when you retire) and you can instead depend on yourself.
Save some money. It's simple. You'll be fine.
Except, it obviously isn't working out in practice. People can't save enough, and it's not just down to a personal failing--it's systemic.
People can't save enough because our wages have been separated from our productivity--and kept down--for the last four decades. That's bigger than the individualistic "every man for himself" type of advice that "save some money" sounds like.
Besides, the realistic view suggests that something bigger is wrong, and something better should be done, when simplistic advice like that isn't working.
I was talking about you. Personally. Frondo.
You're right: that is rather impolite.
> what happened to the rest of us?
Pensions are a fundamentally stupid system. You shouldn't be depending on an employer to fulfill a defined benefit. Even if everything works perfectly (ie. the employer remains solvent and doesn't raid its pension fund), it provides a HUGE disincentive against pursuing job opportunities or entrepreneurship.
The solution is that everyone should be saving for themselves. I fail to see the "con" in people saving for their own retirement.
The con is that pensioners can use the threat of violence to force me to simultaneously save for my own retirement and pay for theirs when they never saved a penny.
Even if defined benefit pensions still existed, I would never get one as I have precisely 0 interest in working for the same employer 10+ years. I don't see why I should be forced to pay for people who are lifers.
You're right, people shouldn't have to depend on an employer for retirement (or health care)--that should be up to our government to provide us.
As for "violence," I have no idea what you're talking about, unless you're actually suggesting that the pensioners are wheeling their walkers up to you and shaking you down. Remember, taxation isn't violence.
http://calcoastnews.com/2014/12/slo-countys-six-figure-pensi...
This is the attitude American oligarchs have been trying to inculcate among the young. This was notably the goal of Pete Peterson's "the can kicks back" astroturfing campaign as well as Stan Druckenmiller's college campus campaigns, and even this neat piece of astroturf: http://www.quickmeme.com/Baby-Boomer-Dad/?upcoming
The idea is to keep young and old divided so that they will not form a cohesive political bloc that will not fight for each other's interests. The young will be complicit in strip-mining the pensions of the old. The old will be complicit in the absurd ramp up of student debt and the removal of pension rights from the young.
Embrace reason.
I have not yet read the good book Atlas Shrugged but I'll be sure to check it out based on your recommendation. Gotta go.
You're delusional. Where did I ever recommend reading Atlas Shrugged? Ayn Rand is nuts.
Personal attacks are not allowed on Hacker News, regardless of how off-base someone else may be.
The battle isn’t between pensions and the financial sector. That is infighting. The real battle is between the people paying into government and those getting money from the government.
It doesn't make sense to me to worry about the knock-on effects of this loss (like unfunded pension liabilities) when this problem is still in place.
Someone upthread suggested that Detroit was an example of how unfunded pension liabilities were the product of looting and corruption. I submit that Detroit is a better example of how artificially provoked demographic shifts can kill a city. However corrupt Detroit is, nobody can argue that it was better off after "white flight".
Does real median family income include non-cash compensation, particularly healthcare?
Literally? To Steal, from Websters: "to take (the property of another or others) without permission or right, especially secretly or by force"
Not sure this is a liberal/conservative thing, although I'm sure it will be framed as such. At the end of the day, it is possible that the overall debt situation forces voters to either walk away from the debt -- or walk away from representative democracy. The two may not work together.
Of course, like everyone else I'm wrong about most every sort of prediction, but I note that Jefferson, observing revolutionary France, was quite concerned that inter-generational debt was quite capable of strangling any sort of revolutionary activity or peaceful refactoring of the way government works. I doubt his observations are any less accurate now than when he made them.
No corporation would stand by this in terms of major signed projects or debts without a massive fight. If renegotiation was required for payment to occur, either in the form of bankruptcy or reduced rates, then it would be a crushing asset grab, with no quarter given. The person who took on a contract they could not afford rightly should be squeezed to crap.
But because it's poor people, they are the ones who have to make the sacrifice when someone wants to renege on their contract?
Hilarious.
You mean steal money from other people to pay for promises they had no say in making.
That's what's fundamentally unjust about government pensions: I'm being forced to pay for promises made before I was even old enough to vote.
Reducing the pension burden is exactly Arnold and others are trying to do. The result of that is that some people are not going to get the pensions they thought they were. That sucks, but it's better than dissolving the government altogether.