Don't Worry About the Mule, Just Load the Wagon

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Originally Posted by gugi

As far as corporations being part of the social contract - that was probably the exception than the rule as in the previous gilded age they weren't. It seems to me that it's fundamentally darwinian and at a certain period of time the power balance was better.
Or may be I'm just too young and from what I've seen corporations have never been concerned with what is moral, only with what is legal and only in terms of calculating the cost/benefit to breaking the law or not. Those with deep pockets can simply buy the law instead, cf. http://www.gpo.gov/fdsys/pkg/CPRT-11...3HPRT91668.pdf

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Yes, perhaps the "social contract" was really a shame all along to keep peace and things moving along until the pretense of having one no longer served any purpose for corporations. After all they now have millions of workers that will to do your job for far, far less cost in other parts of the world. That is now that they have access to them without import penalties thanks to Globalization. There is no need to pretend any more and workers just have to be competitive after all.

Bob

But the money has to come from somewhere. It either comes from the contributions being set aside while working, or you put it on the card and have the debt-collectors get it from your grandchildren.

Yes, the cost of living has increased but the money that's being put aside has been growing during all those years with the economy rather than being buried in the back yard.

Alternatively you can think of say 10% of the current GDP should go to pensions - it's getting collected as taxes and that's it. You pay your 10% while you work and when you retire you get paid from the 10% that the current workers pay. That's perfectly sustainable, when the economy grows and the prices grow people get more money, when it contracts they get less.

What is not sustainable however is to pay 10% while you work and after you retire to make the current workers pay 12% just to get what you want. When they retire they make the then workers pay 15% and it snowballs until it's no longer possible, the young working people revolt and start voting and the last generation of retirees in that process get ends up holding the bag and end up living in misery, everybody after them who's paid into the system doesn't get anything back and there's a new social contract drawn up. Could involve some blood too, not just voting - the longer it is kept on the unsustainable path the worse.

It really is not rocket science, just elementary school math at its core.

Well pension money was also invested so it did grow substantially. Invested in secure stocks. Back when real estate always went up and profits from tha in paid interest was sort of tied into your benefits. Homw owners sort of paid into your pension in a round about way. Like anything else thrown into the market the pigs feast on it until it is all gone and becomes paper and nothing more. The 401k was one of the biggest mistakes people fell for. Clinton was another. Sorry, just referring to his repeal in 1999 of the Glass-Steagall Act. It all sounds like a good idea at the time but it turns out to be more like taking your savings to Vegas to double them.

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Originally Posted by gugi

But the money has to come from somewhere. It either comes from the contributions being set aside while working, or you put it on the card and have the debt-collectors get it from your grandchildren.

Yes, the cost of living has increased but the money that's being put aside has been growing during all those years with the economy rather than being buried in the back yard.

Alternatively you can think of say 10% of the current GDP should go to pensions - it's getting collected as taxes and that's it. You pay your 10% while you work and when you retire you get paid from the 10% that the current workers pay. That's perfectly sustainable, when the economy grows and the prices grow people get more money, when it contracts they get less.

What is not sustainable however is to pay 10% while you work and after you retire to make the current workers pay 12% just to get what you want. When they retire they make the then workers pay 15% and it snowballs until it's no longer possible, the young working people revolt and start voting and the last generation of retirees in that process get ends up holding the bag and end up living in misery, everybody after them who's paid into the system doesn't get anything back and there's a new social contract drawn up. Could involve some blood too, not just voting - the longer it is kept on the unsustainable path the worse.

It really is not rocket science, just elementary school math at its core.

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Yes, I think everyone understands that or at least should by now. If you remember one thing about these pension plans or schemes, if you will, is that they were put together and managed by people with letters after their name. By that I mean well educated professionals who where trusted with a fiduciary duty to ensure the safety and viability of these pensions going forward for the less educated and aware masses. Being one of the masses, it sure do look like that trust was misplaced at the very least. Can't change that now, just have to be more competitive dontcha know. Hard not to be a bit jaded, a bit bitter and just a little pregnant after all that.

Bob

Yeah those are enormous pools of money, so they're extremely attractive.

I think this country needs to have a frank discussion about what level of support its safety net should offer along with the associated costs, i.e. how much support it is prepared to give to somebody for just being a human being regardless of merit. Then tax that and anything more is based on what everybody earns for themselves on their own. If they don't save anything for retirement, invest their retirement savings in a pension fund that goes bust, or work for a company that goes bankrupt along with any pensions, then all they get is that minimum support.

I mean that's in a sense what safety net is supposed to be, but it seems that many people want it to give them either at least what they've put in, or a moderate living standard. If people want moderate living standard when they retire they should be prepared to give up the necessary portions of their earnings while they work. If they aren't then the safety net should be something to allow them life in poverty instead of extreme poverty.

Here is one thing I would change. If you retire and have the means to support yourself after your working days are up then you don't get that measly little SS check every month. It is for those who can't or failed along the way. I know a lot of people who are well off and still love to get that check even though they don't need it. Makes the BMW payment every month. That is wrong. The country need a change alright but like I said many times before, it is going to take a disaster to bring it on. The BBs are stacked and I am just waiting for something to jar the table.

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Originally Posted by BobH

Being one of the masses, it sure do look like that trust was misplaced at the very least. Can't change that now, just have to be more competitive dontcha know. Hard not to be a bit jaded, a bit bitter and just a little pregnant after all that.

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Some attempts were made to change that, but just few days ago Congress started reverting those measures and the taxpayers are again on the hook for bailing out banks when their trades on derivatives and similar financial instruments turn bad. Of course when they turn good the bulk of profits go to the banks, not to the taxpayers.
And not even a whiff of the outrage and finger pointing from 2008/2009 - the big supposedly polarizing story in the news is that US will start normalizing relations with a small neighboring island.

To me this is a prime example of manufacturing contention over something moderately relevant while an issue of enormous significance is being glossed over.

My family is all union and from the trades. Some unions invested wisely and are funded other unions didnt do right by their members. Carpenters union is good. Electricians not so much. And family that started trucking companies and put away money for their OTR drivers is under funded.
When you have a front row seat to watch it all unfold it is painful to bear. Money doesnt grow on trees to fix it.
Less people paying into the remaining jobs at lower wages. Something has to give, an its going to be the little people who gave.
City of Detroit goes bankrupt and the first thing they go after is the Art and the pensions.
Daddy Warbucks always protects the art for rich folk and the rank and file took a cut. Lets save the Original Howdy Doody and sacrifice the fireman who put in 30years. Its messed up real bad.

My view is pragmatic. I am going to work as long as I can and then hope not to have a long slow decline. Even my father fails to understand the quantum shift in the 20 years since he retired. The defined pension plan that so generously pays him is a unicorn these days. Instead, if you are lucky, you have a 401K with employer matching payments that some fund manager is scooping out all the profits on.

Me, I gambled on my own business and buying some commercial property. Social Security is going the way of the dodo if Rand Paul gets his way and my business isn't worth much to sell. I'm facing a grim future.

Folks become complacent. They think what happened in the past is gone and as time goes on things get rosier and rosier. They need to learn that as soon as you let your guard down the evil ones are just waiting to devour you. That is exactly what is happening now and the sad part is a large segment of the population who are most affected don't seem to care.

Many of these pension plans are in the shape they are in because the companies simply stopped contributing years ago. Now they wring their hands and say it's insolvent, not our fault. it must be the stock market crash or something.

Once the republicans take over I'm sure they will have the answers to fix everything.