Social Security

Tick, Tick, Tick

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From the Financial Times:

Public pension funds in US states are facing their worst year of losses in history, exacerbating existing funding shortfalls and putting pressure on state governments to shore them up.

In the nine months to the end of September, the average state pension fund lost 14.8 per cent, according to Northern Trust, a fund company. The loss has grown since, as financial markets slumped further in October. The previous highest loss for state funds was 7.9 per cent for the full year in 2002.

In labor-tastic blue states like my native California, public pension funds are the mother of all delayed gratifications, with today's union-label politicians making all tomorrow's promises of money that probably won't be there. And, as mentioned yesterday, the larger of these funds are subject to constant pressure to make the world a better place, rather than make investors grow their money at maximal rates.

[Link via David Frum.]

NEXT: But Then You Came to My Bailout Rescue

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  1. No problem.We’ll just bail them out and make them whole.Private sector workers will gladly sacrifice and work into their 70s to help our public servants retire at 50.

  2. Let’s see…if the pension funds implode, the localities have the option of cranking up taxes or telling their employees to go fuck themselves. I wonder which they will choose?

    Maybe they’ll have to crank taxes so high that people just start executing government employees in the street. We can hope, right?

  3. Not to mention the fact that, in California at least, we’re just starting huge retirement wave

  4. “Public pension funds in US states are facing their worst year of losses in history, exacerbating existing funding shortfalls and putting pressure on state governments to shore them up.”

    It’s not just pension obligations. State and local governments also have huge unfunded liabilites for their retiree health care programs as well.

  5. Now we really need to levy a windfall tax on the oil companies just to see what effect it has on all the pension funds with heavy investment in Exxon. Remember liberals, you asked for it.

  6. We keep trying to squeeze the part of the balloon that’s bulging at the moment. We’re never going to get anywhere by drips and drabs. We’ve got to take on the whole problem at once. Just send everyone a check for $1,000,000.00, then we’ll all be rich! Problem solved.

  7. Public pension funds in US states are facing their worst year of losses in history

    It’s okay, back when the market was doing well I am sure that the actuaries and fund managers recognized that any long-term investment has up and down years. This reality would have helped them avoid giving in to the temptation to assume their investments would gain 15% a year forever, shortchange their contributions and spend the money elsewhere. Right?

  8. You know, perhaps they should invest in old coins… 😉

  9. These losses are for funded obligations. A large percentage (if not the majority) of public & private pensions are under- & un-funded. The recent losses are only acting to exacerbate a much deeper problem. Taxes would have to go to FDR levels to fund all these obligations properly.

    Regards,
    TDL

  10. Get ready for another bailout and more taxes.

  11. No doubt about it, its a ticking time bomb and the sooner we get that Moron Bush out of office, the better off we will be. that is unless of course his little “mini-me” McBush wins next month, then we are all screwed!

    Jiff
    http://www.anonymity.cz.tc

  12. Tick, Tick, Tick

    Ve haff vays to make you Tock!

  13. “No doubt about it, its a ticking time bomb and the sooner we get that Moron Bush out of office, the better off we will be.”

    Explain to me how Bush is responsible for state governments establishing unsustainable pension systems.

  14. Bush, I dunno. But Republican Governor Ridge (prominently mentioned as a possible v.p. choice for McCain) and the Republican-controlled legislature in Penna. rammed through huge pension increases in 2001 for public employees. We’ll see who gets blamed when this bill is due. (Probably whomever is the Republican governor as Democrat Rendell is in his final term and the governor position seems to swing back to the other party every eight years.)

  15. And what about California and all the rest of the states?

    This is a widespread problem across the country.

  16. I’m gonna be raped by the government before I even make it outta college? Maybe I should just drop out of college now and start bumming around. You know . . . ride the rails and sing snappy tunes . . .

  17. I don’t see this as a Republican/Democrat issue. Both parties jacked up the goodies for the bureaucrats when times were flush. The states had oodles of property tax revenue coming in during the housing bubble, and they, like the spoiled children they are, spent every last fucking dime.

    And likewise, I don’t see either party being willing to take on the public employee unions unless the economy truly goes tits up and it becomes a more tempting campaign issue to pitch to unemployed voters.

  18. Explain to me how Bush is responsible for state governments establishing unsustainable pension systems.

    Please do NOT respond to the spam commenters.

  19. Naga,

    Oooh, you’re going to be a hobo? How cool. My generation never had such opportunities.

  20. Oooh, you’re going to be a hobo? How cool. My generation never had such opportunities.

    “Oh, my God! How do hobos fit all their stuff into a bandanna? It doesn’t make sense, man! We’re gonna need, like, a towel or a tablecloth or something! But it’s not gonna look cool! We’re gonna look like assholes!”

  21. Always with the negative waves, Episiarch, always with the negative waves.

  22. Epi-

    It wasn’t sunny in Philly yesterday…

  23. It sure isn’t sunny in CT today.

    “Of course there’s gonna be an explosion! You think I’m not gonna explode?”

  24. I wonder if hobos have secret martial arts skills, involving the stick they carry around with all of their possessions. A quick flick of the wrist, and the bandanna container flies off. Then the hobo is ready for action with his lethal hob? staff.

  25. Kind of like r?nin–samurai without masters.

  26. “Then the hobo is ready for action with his lethal hob? staff.”

    Who needs a staff?

    All I need is a teacup.

  27. BOOO! Registration!

    *Shrugs*

  28. Everybody was hob? fighting.
    Those bums were fast as lightning.
    In fact it was a little bit fright’ning,
    But they fought with expert timing.

  29. I don’t see this as a Republican/Democrat issue.

    Its not. Its a great illustration of why government workers shouldn’t be unionized.

  30. Damned straight. The idea of giving government employees political power beyond the power they already wield is a silly one.

  31. “This reality would have helped them avoid giving in to the temptation to assume their investments would gain 15% a year forever, shortchange their contributions and spend the money elsewhere. Right?”

    I would be laughing at this if the reality weren’t so upsetting.

  32. Its not. Its a great illustration of why government workers shouldn’t be unionized.

    Agree 100%. I almost brought that up in my original post, but figured it was overkill. At least federal workers don’t have strike rights, but I remember growing up that Oregon teachers would regularly strike or threaten to do so every time their contract came up for renegotiation. And the government always caved.

  33. Pro Lib,

    You to know of . . . the hobo ninja?

    “Hobo Ninja. To the homeless he is both a protector and a bogeyman. To those who would abuse the homeless he is the looming shadow of death riding the freight car of justice. From the vicious machinations of The Big Boss and his thugs to the growing threat of the Beggar Brigade and their leader Captain Sweatpants. Hobo Ninja fights for the freedom of the homeless and the forgotten.”

  34. Of course someone has already come up with the hobo ninja. Why do I even bother?

  35. Your ignorance is pardonable, Pro Lib. Though I would give change to bums for a few weeks as penance if I were you.

  36. A bum does not a hobo make. Not unless he rides trains and carries all his stuff on a hob? staff.

  37. Pro Liberate,

    I’m not going into the Yoda speak that says better safe than sorry. Before you bellow anything about not following the herd mentality, I will give you one of my favorite quotes.

    “Deep in the psyche of every sophisticate, is a superstitious peasant.”

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