WTF!?! States Declaring Bankruptcy Can Invalidate State Constitutional Terms?

[RocketMan]

We've only seen the beginning of trouble if we don't get adults to address the problem.  The good news is the ship of fools we call congress is actually thinking about what Joe and Martha Sixpack see coming down the road.

Uh...no.  Congress is making some noises along those lines, but it is just that, noise.  I fully expect them to go back to business as usual later this year.  To expect anything else out of them is just naive in my opinion.
The folks that call the shots in Congress have not changed.
Our Dear Leader and the Congress do not have the requisite courage to properly address the issues that beset us.  I doubt the leaders of the various States that are in similar trouble are brave enough to solve their issues, either.
Folks, we are in deep doo-doo.  Hang on tight, it's going to be a very bumpy ride.

[makattak]

How fabulous - 30 years ago someone agreed to take a government job that pays a lot less than private sector equivalents, because of a contract that specified good retirement pay.  Now everyone wants to screw that guy out of what he bargained for.  The "free market" doesn't work if you don't honour your contracts for lifetimes of work, folks.

What happens to labor contracts of a company that goes bankrupt? If someone is going to get screwed, it should be the leeches government workers, not the taxpayers.

Maybe we'll get fewer leeches government workers that way rather than fewer taxpayers.

[makattak]

Also, maybe we'll get truth in government financing of worker cost AND a move to self-financed retirement funds by government workers so they don't get screwed again in the future.

WIN WIN WIN!

[Jamisjockey]

The real question is, what happens when the Federal system is forced into insolvency? 

[Headless Thompson Gunner]

The real question is, what happens when the Federal system is forced into insolvency? 

Inflation.

[makattak]

HYPERinflation.

FTFY

[longeyes]

Inflation, broken promises, coercion.

[dogmush]

What happens to labor contracts of a company that goes bankrupt? If someone is going to get screwed, it should be the leeches government workers, not the taxpayers.

Maybe we'll get fewer leeches government workers that way rather than fewer taxpayers.

Slight thread drift here....on the subject of Armed Polite Soceity:

I work for the government.  In addition to the hours I put into the Army Reserve, I work full time as a Department of the Army civilian.  I have worked for them for almost 10 years now, managing to work myself to lower-middle management. I did it the same way private sector folks do.  I worked extra hours, learned new skills on my own time, and plaid inter-office politics when needed.  I now get paid for 40 of the 52 or so hours a week I work. I have a company backed 401k (TSP account) and a pension.  Yes I know it's the taxpayers money, but the truth is, I work damn hard for my money, and do it using skills lots of folks (even folks on this board) don't have.  And I'll be pretty pissed if someone tries to get the government to default on my contract.  Maybe you want to think about who you're calling names.

And if not, come call me a leech to my face.

[/thread drift]

you may now return to your regularly scheduled doom-saying.

[Headless Thompson Gunner]

The question isn't about whether government employees should get their pensions, it's whether or not they can.  Reality, not morality.

The money just isn't there to fulfill all of the promises that have been made.  So what do we do now?

And this'll sound harsh, but the fact that you worked hard doesn't really enter into the equation.  There are plenty of people who work hard all across the spectrum and still watch as the company/government/whatever goes under and takes the pension promises with it.

Ultimately the buck stops with you.  It's not enough just to secure a promise, you must evaluate whether that promise is realistic, whether it can/will be fulfilled.  An awful lot of the public employee pension promises just weren't realistic, same as many of the UAW contracts from GM.

[makattak]

Slight thread drift here....on the subject of Armed Polite Soceity:

I work for the government.  In addition to the hours I put into the Army Reserve, I work full time as a Department of the Army civilian.  I have worked for them for almost 10 years now, managing to work myself to lower-middle management. I did it the same way private sector folks do.  I worked extra hours, learned new skills on my own time, and plaid inter-office politics when needed.  I now get paid for 40 of the 52 or so hours a week I work. I have a company backed 401k (TSP account) and a pension.  Yes I know it's the taxpayers money, but the truth is, I work damn hard for my money, and do it using skills lots of folks (even folks on this board) don't have.  And I'll be pretty pissed if someone tries to get the government to default on my contract.  Maybe you want to think about who you're calling names.

And if not, come call me a leech to my face.

[/thread drift]

you may now return to your regularly scheduled doom-saying.

I'm sure you work very hard for your money. Not all do. Most are overcompensated:

http://www.cato-at-liberty.org/federal-pay-continues-rapid-ascent/



It's no longer a sacrifice to work for the government. I will often use the term leeches when I speak of those who have been gaming the already generous pension system. I crossed out the leeches that I had originally posted alone, so it was an act of politeness to replace the word I wanted to use for the more polite term. I left my original wording with the edit when I decided to act more politely with a less offensive phrasing.

Further, although Federal pay is still too much, the greater problem lies with the state workers. My ire is directed most at them.

[dogmush]

HTG,

Not really.  Not at a federal level, anyways.  The money for the pensions exists.  This, like cutting cops first, is a media tactic designed to stir up and factionize the taxpayer so we don't actually look at where money goes.  But I would be willing to talk about  debts vs. income and worthwhile projects.  I do realize the need to cut back on .gov money spending.  

I was objecting to Mak's name calling.


As far as company backed promises, if a .gov is so insolvent that it can't pay it's contractual promises, then we need to seriously consider dismantling said .gov.  If the Federal Government of the United States ceases to exist, I'll understand where my pension went.  If, however, my pension dissappears, and we still have federal Pell grants, and the NEA, well, that's BS.  And that's where states are at.  They're threatening to cut pensions and cops and schools, because they don't want to cut a myriad of other stupid programs.

[Seenterman]

If someone is going to get screwed, it should be the leeches government workers, not the taxpayers.

Is this how we feel about all gov. workers? That their nothing but leaches that deserve to be screwed out of their pensions because of politicians?

I'm guessing no one hear would complain about the 55 y.o. fire fighter about to retire being told he's unable because the state already spend his pension money or the cop who got shot losing his pension from his city, because he's just a leach that didn't deserve that money anyway.

 

So because you work for the government means you deserve nothing after 20 years of hard work if some politicians played fast and loose with taxpayer money? What the hell, private CEO's got millions of dollars in "bonuses" after taxpayers had to bail them out of insolvency.

So work for the state gov. = get no money if it fails.
Work for private enterprise, fail miserably = BILLIONS UPON BILLIONS of dollars from the FedGov

I know no one was for the bailouts on this board but doesn't this seem a bit wrong? 

[Headless Thompson Gunner]

Not really.  Not at a federal level, anyways.  The money for the pensions exists.  

Say what?!  The Federal government is flat broke!  It has to borrow more than a trillion dollars every year just to break even.  This is possible presently, but it will not remain possible indefinitely.  There will come a point where FedGov cannot borrow to make up the difference any longer, and when that happens promises of all sorts will go unfulfilled. 

I fail to see how the promises made to pensioners are any different from the myriad of other promises that will go empty.

[makattak]

Is this how we feel about all gov. workers? That their nothing but leaches that deserve to be screwed out of their pensions because of politicians?

I'm guessing no one hear would complain about the 55 y.o. fire fighter about to retire being told he's unable because the state already spend his pension money or the cop who got shot losing his pension from his city, because he's just a leach that didn't deserve that money anyway.

 

So because you work for the government means you deserve nothing after 20 years of hard work if some politicians played fast and loose with taxpayer money? What the hell, private CEO's got millions of dollars in "bonuses" after taxpayers had to bail them out of insolvency.

So work for the state gov. = get no money if it fails.
Work for private enterprise, fail miserably = BILLIONS UPON BILLIONS of dollars from the FedGov

I know no one was for the bailouts on this board but doesn't this seem a bit wrong?  

Government bailing out private companies is wrong.

Doesn't mean we should bail out the failing government pensions, too.

If it makes you feel better, I think all politician pensions should be recinded as well. Those involved in the scam should bear the brunt of the consequences.

You don't have to worry, I'm sure the taxpayer is getting screwed no matter how this is resolved. (And if we decide just to ignore, total Weimar-style collapse will be the resolution.)

[roo_ster]

The total liabilities of the Fed.gov is in the tens of trillions, IIRC.

We're talking gov't worker pensions, SS, etc.

To be blunt about it:
It ain't gonna happen.

Either fed.gov will renege or it will inflate the currency so that the promised dollars will be on the check, but they are worth 1/10th what they used to be.

We can talk morality all day long, but the actuarial tables are what future gov't pensioners need to get angry at.  If you bet on the gov't pension being there and playing a vital role in your retirement, you bet wrong.

As for state gov't pensions, if they were valued the same way the private sector values pensions, all would be underfunded.  They, too, are never going to pay out what they promised.

Ditto for social security.

Say what?!  The Federal government is flat broke!  It has to borrow more than a trillion dollars every year just to break even.  This is possible presently, but it will not remain possible indefinitely.  There will come a point where FedGov cannot borrow to make up the difference any longer, and when that happens promises of all sorts will go unfulfilled. 

I fail to see how the promises made to pensioners are any different from the myriad of other promises that will go empty.

If the market decided it no longer wants to buy treasuries or will only buy them at 2-3-4-5X current rates, the party will have stopped.