patrick.net

MarkInSF says

I’m still waiting for Marcus to explain why it’s O.K. for CA state/local government employees have a retirement plan that guarantees their contributions, and the contributions of their government employers, will double in 10 years at tax payer guaranteed rate of return of 7-8%, when mere taxpayers don’t get to buy into the same plan.

It's hard to respond to an over simplified and false statement. Nothing is guaranteed. I fully expect my contributions to go up, fairly soon, and the state's too. It's a pension fund calstrs, you can research it if you want to understand better.

But the taxpayers aren't guaranteeing as much as you say.

Here's a guarantee. If the managers of the fund were to perform too poorly, and the fund didn't perform well enough for a long enough period of time, our benefits would be reduced. California's perpetual state of extreme deficit pretty much guarantees that.

The real cost of the pension plan, versus social security, is less than you make it out to be. Our pension is a benefit that costs the district and the state a total of maybe 5% of my salary more than if they were instead using social security.

By the way Calstrs has gotten an average rate of return of 7 or 8 percent for the past couple decades. But as I said, nothing is guaranteed.

marcus says

But the taxpayers aren’t guaranteeing as much as you say.

Yes they are. Define "defined benefit". The pension benefits of those nearing retirement, or already there based on assumptions of high investment returns, are already 100% Gold-Plated tax-payer guaranteed. Any additional contributions to the fund for anybody less than 10 years from retirement are almost irrelevant.

It's the younger staff that will bear the brunt of an increase in contributions. The public workers that already took advantage of boom times, and got politicians to lock in 100% tax payer guaranteed gains for them, will be laughing to the bank for decades.

marcus says

By the way Calstrs has gotten an average rate of return of 7 or 8 percent for the past couple decades. But as I said, nothing is guaranteed.

Yeah, well, if I had invested in a home in the Bay Area for the last few decades I could have pulled that off as well. When you have a multi-decade credit inflation, it's hard to not lose. But, do the math. Home prices can't double every 10 years in real terms unless the the economy does as well. Not unless you believe in magic. All investment returns above the growth in the overall economy are zero-sum, and frankly I don't appreciate a class of people that has legislated themselves to be on the positive side of zero.

MarkInSF says

He’s got a Masters degree in Math, so I’m sure he knows the answer, but he’s yet to express his opinion on the matter.

You have too much bias for me to be of any use to you. And I don't have time to pull exaggerated numbers out of my ass to counter yours.
MarkInSF says

All investment returns above the growth in the overall economy are zero-sum

What does that even mean ? Are you saying that if the economy stopped growing that interest rates have to be zero and corporations would no longer be able to pay dividends ? (or that the stock price would not recover from the dividend ?)

MarkInSF says

The pension benefits of those nearing retirement, or already there based on assumptions of high investment returns, are already 100% Gold-Plated tax-payer guaranteed

I'm not convinced of that.

MarkInSF says

I don’t appreciate a class of people that has legislated themselves to be on the positive side of zero

You're like Clarence. Why do you have to frame it compared to what you get. Why can't you just frame it as compensation. Maybe my salary is low enough to justify having a pension benefit that costs the govt 5% more than if it were giving us SS.

AS for the better return in a managed fund than what we would get in Treasuries ? There is a higher risk, but that risk is shared between members, what they pay in, and their possible benefit reductions and the state. And I guarantee there is a limit on how much the state would increase it's contribution, if the fund did really poorly.

Your view an quite an exaggeration.

Everyone has always known the benefits people get in public service jobs, as well as in other govt jobs. You were free to pursue such a career. Why didn't you ?

The honest answer to that would help you to understand.

marcus says

AS for the better return in a managed fund than what we would get in Treasuries ? There is a higher risk, but that risk is shared between members, what they pay in, and their possible benefit reductions and the state. And I guarantee there is a limit on how much the state would increase it’s contribution, if the fund did really poorly.

Risk to members? The is risk all on the taxpayers shoulders. Defined benefit, remember? You may not be convinced of it, but it's a legal reality. Benefits accrued cannot be revoked.

What would you think if the Federal Government announced it was getting rid of Social Security, and instead was opening up a retirement fund everybody was required to contribute to, but was guaranteed to return 7.5%, and you could start drawing benefits at 55? Do you think that's a workable plan?

marcus says

Everyone has always known the benefits people get in public service jobs

Actually, I had no idea until recently. I vaguly knew that cops and firefighers retired earlier than most, but I had no idea that age had recently been lowered by 5 years to 50, and the benefit had been bumped up to 3% x years served, from 2%. Same with the 55 retirement age for many others. I had always assumed it was more like 65 like SS. For public workers in skilled professions, I have no idea why we want them to leave at 55, when they are at the height of their skills.

marcus says

Maybe my salary is low enough to justify having a pension benefit that costs the govt 5% more than if it were giving us SS.

Magical thinking. Only 5% more, but the retirement age is 10 years lower, meaning 10 less years to contribute, and 10 more years to draw benefits. And higher benefits than SS to boot. All for just another 5%!

MarkInSF says

Magical thinking

Okay, so you don't know what that means. I'll call yours, not thinking, or maybe overly emotional thinking.

I was talking about the cost, the difference in the cost. You want to compare the difference in what I get vs social security. A government program that is way different. How long do you pay in to get full benefits with social security ? How much is it tied to income, or what you paid in. MY pension doesn't include disability, that SS pays. What does social security pay toward your children if you die after paying in just a few years ?

The difference between what the state and the district pays in, and what it would be with social security, WHICH IS THE COST TO THE STATE, was my magical statement.

If you want to say it actually costs more, because of risk, which I say is shared with members and is finite, you say it's all on the state, and is infinite, okay. I can't go on, with this. There is a political movement right now targeting the ignorant and resentful against unions and teachers, and you feel the need to do your part in "educating," these people. Have fun, I'm going to let you do your thing. I can't read this emotional bs anymore.

I'm not sure where this definition is from, but I got it from the link below.

ressentiment (is french but used in psychology):

Ressentiment is a sense of resentment and hostility directed at that which one identifies as the cause of one’s frustration, an assignation of blame for one’s frustration. The sense of weakness or inferiority and perhaps jealousy in the face of the “cause” generates a rejecting/justifying value system, or morality, which attacks or denies the perceived source of one’s frustration. The ego creates an enemy in order to insulate itself from culpability.

http://trueslant.com/juliansanchez/2009/12/16/the-politics-of-ressentiment/?source=patrick.net#socialvotestarget

"the hate filled rant from Troy "

Troy has some biases, and I don't always agree with him, but he backs up what he says nearly always with research, tables, graphs, etc. Much better than some on this site.

I won't even go into Fox "News" and other "reprting"...

MarkInSF says

Clarence 13X says

No one should be able to put in 8.5%, have the state put in another 8.5% and the fed put in another 2% then retire at 55 on my tax dollars….n

I’m still waiting for Marcus to explain why it’s O.K. for CA state/local government employees have a retirement plan that guarantees their contributions, and the contributions of their government employers, will double in 10 years at tax payer guaranteed rate of return of 7-8%, when mere taxpayers don’t get to buy into the same plan. Or how how they can even make such a guarantee with a straight face.
He’s got a Masters degree in Math, so I’m sure he knows the answer, but he’s yet to express his opinion on the matter.

Apparently Marcus has put me on the ignore list according to his post in another thread. But he seems to be against anyone with an opposing view so much so that he only wants to communicate with those of like or similar viewpoints. Althought he had no prior knowledge of my voting record he has proclaimed on several other threads that I am watching Fox News too much to be able to make a educated statement.

I voted for Obama, and Obama is also for the same education reforms that I am supporting on Studentfirst.org.

If the state cannot afford to pay pensions then the plans must be cut to what is affordable. Period.

marcus says

If you want to say it actually costs more, because of risk, which I say is shared with members and is finite, you say it’s all on the state, and is infinite, okay.

To say it actually cost more is a statement of fact. That's why the pension funds are "underfunded" and will be requiring large contributions from the general funds of state and local governments. I have no idea where you are getting this "infinite" quote from me. All I am claiming is that your retirement benefits cannot be paid for with the contributions of you, and your government employer made without the assumption of high investment returns.

The $141-billion California State Teachers' Retirement System on Thursday reduced its long-term assumed annual rate of return on investments from 8% to 7.75%

http://latimesblogs.latimes.com/money_co/2010/12/calstrs-cuts-estimated-rate-of-return.html

And yes, that IS taxpayer guaranteed. Because your benefits are DEFINED, and do not go down a single penny if the fund does not perform as expected. If those returns don't happen, then who's going to pay? It's certainly not anybody that is has retired, or is soon to retire.

I've posed the question in many forms, but you keep dodging it. Are you for a retirement system that guarantees 7-8% returns for ALL Americans, and not just for employees of state and local governments?

True illustration of a government "worker:"

I happen to know a building inspector for a small suburban city (under 35,000) where for the last 8 years, there has been very little new construction projects (including additions). This inspector also had a side line business performing FHA compliance inspections (on city time) and was himself a sub-contracting home builder (also on city time). While visiting with his neighbors last night, my wife & were told the inspector retired recently and bragged to them that he received a check for over $40,000 for unused sick leave. As a side note, the inspector’s wife was also a lifelong "worker" for the court system. While employed there, she also managed to be a real estate broker and an interior decorator. She is now retired, enjoying the fruits of her no doubt extensive government labor.

I'm posting this as a microcosm illustration as to how government REALLY works. These people typically imagine themselves to be part of an elite that are entitled to get away with just about anything, and in most cases, they do primarily because they are protected by their union.
Getting rid of a bad government worker is about as easy as climbing a mountain with a 100 Lb. weight on your back.

Nomograph says

RayAMerica may be bitter after he lost his government job because, in his own words, he was “extremely lazy and ran a corrupt department.”

I heard said once that when your enemies resort to lies you know you've won. Thanks Nomo! I feel like Charlie Sheen ..... WINNING!!

RayAmerica says

I feel like Charlie Sheen ….. WINNING!!

Most people aim a little higher than Charlie Sheen for role models.

YMMV.