Potholes or Pensions
http://www.nj.com/opinion/index.ssf/2015/07/raise_the_gas_tax_to_fun_pensions_the_njea_lets_th.html#incart_river
Yet another low intelligence sick proposal from the NJEA. Anyone agree to send money for roads to pensions?
iJay Silly is the most polite word I would use to describe that plan. We need to cut back government to where employees have 40 hours of real work to do. Wasteful spending needs to stop. Then we can fund the pensions that we are obliged to fund.
maja Of course not. And that is not what the NJEA rep suggested either.
Obviously NJ is not going to vote to divert pothole funds to pensions yet the OP ED author's opinion is of low intelligence also and has little to do with gas taxes or potholes. Out of a series of suggested tax hikes to fund the pension, he cherry-picks the gas tax to try to prove why funding pensions will never happen. Of course any NJian, beyond a teacher, given a dollar would fix the everyday pothole versus funding a teacher's retirement. I haven't seen a teacher in years myself but I see potholes everyday.
But his real bottom line is that he is basically recommending that we don't fund the pension obligation. Worse yet, the author states "They want it to go to people who may have retired to North Carolina and Florida," indicating that pensioners who move out of state are even less worthy than those who remain. I say that statement is downright un-American.
He suggests that raising the gas tax to pay for pensions is robbing Peter to pay Paul. However, RAISING a tax to fund a specific purpose is NOT robbing Peter to pay Paul, it's paying Paul. Peter, the roads department, must fend for itself and raise the revenue appropriately as well if roads require greater budget.
It's a red herring. The bottom line is NJ has a pension obligation, a debt, we are not paying. We have potholes and a road's budget to fix them. They are both obligations, one a debt, the other a yearly expense. But both bills to be paid. The author does not want to pay the pension obligation, his ascertain is that "pensions that cannot be funded" and therefore that we should not "fund pensions that the state plainly cannot afford."
It's also a red herring to say the pensions were a series of bad deals by bad politicians. If your spouse runs up the credit card on useless extravagances that were overpriced, can you skip payments because the sales were a bad deal?
We can pay the debt, we can not pay the debt, or we can negotiate for a better deal on the debt. How we do it, default, deal or raising some taxes/loans to pay it off are the choices.
The author clearly thinks its a bad deal and we shouldn't pay. Especially to those who dared to leave the state upon retirement. But if we default on the debt what happens: basically NJ's credit goes in the toilet and we will never raise another bond. Any large projects will never happen, people and companies will flee the state even faster and we will begin to circle the drain as fast as our our home values. A similar reaction would happen if we mandate those owed the debt take a deal.
NJ is an expensive state. FYI our gas tax is third lowest in the nation, just behind Alaska and Wyoming and less than 1/3rd that of CT and other high-priced gas states. Just saying. But the real problem is HOW we spend our money. Christie has made many cuts. Cuts alone don't cut it especially the good investments he forgoes that included a majority Federal stake like for the schools and the tunnel (which he now supports as Candidate Christie). What we need is to pay lower prices for services, not just cut budgets. IMHO we need to fund our obligations, continue to try to strike a deal to lower them, but most important is to get some politicians who can start spending our money smarter. We have a lot of money in NJ. NJ government just spends too much to do anything. For example, SC and WV use $39K to fix a mile of road, NJ uses $2M. I think we have a problem here, a cost problem that we can replicate across our entire state budget for everything we spend our cash on. We just spend too much money to get things done. The answer is to hire someone who can get us less than $2M per mile and closer to $39K.
The author's suggestion that pensions not be funded is fiscally dangerous, the suggestion that retirees moving out of state are less valuable NJ citizens is ludicrous. The recommendation for a gas tax hike to cover pensions as proof of the evil of pensions is just a red herring as to the author's root problem, solutions, and the effect of doing what the author would like to do: not fund our obligations.
strangerdanger Yep, people get hot and bothered about spending but the real devil is in the details ... costs.
Andy Loigu I have been reading about these problems since Governor Kean. The only good Governor in my life time was Walter Edge. That was before public employees Unions. Thats the root of the problems. Thank you President Kennedy.
Old Gent Don't forget that Christie-the-presidential-candidate intends to run on the "I never raised taxes in NJ" mantra. That's number one on his list to appeal to conservatives.
The politicians in state government haven't the gumption (b*lls, if you will) to do the right thing, which is to have those who use the roads pay to maintain them. As unpopular as that would be, raising the gas tax from it's ridiculous low level, AND BY LAW DEDICATING IT TO ONLY ROAD REPAIR AND MAINTENANCE, is the only fair way to do it. If you don't drive you don't buy gas, you're not taxed. If you drive hundreds of miles a day AS I DO then you use the roads and pay for their upkeep.
The problem with that is two part:
First, most politicians are afraid to do the right thing (no b*lls) even though it's the only equitable way...and that's because of the second part:
The majority of voters of NJ will oppose ANY increase in taxation because of the state's (and now Christies's) history of fiscal mismanagement. Elected officials fear that their "doing the right thing" will make them un-reelectable.
So unless people in NJ -- elected officials AND voters -- grow a brain....we're screwed.
JerryG Taxpayers pay for there own 401k's with a small contribution from the employer and pay most of the heath care expenses themselves.It is time for NJEA to come to terms with the times.The days of employers pensions are long gone.
whatsup"Taxpayers pay for there own 401k's with a small contribution from the employer"
Nowadays just a few employers contribute to employee's 401K or similar plans or match employee's contribution - and it's "IF" they offer these plans at all.
Lena @whatsup,
You speak as though the entire financial contribution for the PERS comes from the employer alone.
While our governor (wherever he is campaigning today) and his predecessors have failed to make the legally required employer contributions, the employees have been continuously making THEIR required contributions all along. After the most recent agreement with Christie (you know, the one he refuses to honor) teachers have 8.5% of their gross pay deducted for the PERS, plus pay towards their health insurance premium.
People like the author of the article and iJay would have you believe public employees are getting a free ride.
Unlike Christie...who signed an agreement to make up the shortfall and then reneged on his own agreement, and had the nerve to have it declared illegal (one heck of a lawyer, that Christie, huh?)...public employees have never stopped making their contribution.
No JerryG, but the employees get far more out of it than they (and the state) put in. Disproportionately so. If there's no money, there's no money. Where is it going to come from? Bankrupt the state even further? It's unsustainable and needs reform, bottom line. Millionaire's tax? They'll move across the river to NY and then there'll be even less tax base to fund the state.
People put all the blame on Christie, but where was everyone (politicians and union leaders) when the previous 5 governors were shortchanging the pension fund AND increasing benefits? They acted like a 15 yr old with a credit card.
I'll tell you where they were: fat, happy, and ignorant of basic economics.... thinking the golden goose would never stop laying.
I'm all for increasing the gas tax to fix the roads. I don't know why our elected officials can't see this. Increase it while gas is cheap. No way they'll ever do it when gas is over $4 a gallon again.
MeisterNJ JerryG...Bottom line ,if I can just get by paying for my benefits ,retirement and my son's college costs,My tax dollars are supposed to pay for yours?really? maybe if the state paid for my son's college.Just like posted above,Years of failures by political figures and NJEA for ignoring the enevitable.
I would love to know who's getting all these 'upgraded' retirement deals. I've been a firefighter for twenty years and the retirement package has actually decreased. I'll get a much smaller check than I would have due to paying a big chunk of my medical costs. In fact, I'll get a smaller pension check every year as medical keeps going up and there are no cost of living adjustments in my pension now, thanks to Christie.
Everyone here that's spouting off a lot of BS about how public workers are on the gravy train should take five minutes to do some actual research on the topic instead of just parroting all the garbage they get from Fox news or whatever right-wing-nutjob radio station they're listening to.
Keep in mind: I'll do 25-30 years of service in return for my pension. Politicians do 4-8 years and get a lifelong pension that's a *lot* larger than mine could ever be. Who do you think needs the cuts more? Me, or the millionaire politicians?
The_Bishop so -you put in 25 years and retire(45 or 50 years old)lifespan is now in the 80's,so you should get benefits for 30 to 35 years after you retire at the state expense?with increases?I am sure you had a comfortable salary for years.how about saving you own retirement fund such as a 401k like everyone else.Can you work another job and still receive the benefits?It is simply what has been happening for years,now the money is gone.NJEA does not want it to be a question in nov. elections.Why?Because they will be defeated.People cannot afford the taxes anymore in this state.That is why people are leaving nj.Less people -less taxes collected.Do the math.
So, medical costs are only going up for state workers, The_Bishop? Doesn't affect the rest of us and our retirements?
Every politician is a millionaire?
First of all, everyone who is "anti-public-employee" (and granted that's likely not a fair term, but not sure how else to describe it) seems to forget that public employees are also taxpayers, too. They pay state income tax, they pay state sales tax and, if they own a home, property taxes. People talk like it's TAXPAYERS VS PUBLIC EMPLOYEES.
@whatsup, if when you started your career 25 or 30 years ago, you were told you'd be paying 8.5% of your gross salary into a savings fund AND your employer was legally required to also pay in, can you honestly sit there and maintain you'd have also started a 401k (or the 1985 equivalent - CDs maybe?) and would have invested enough so that you could kiss that mandatory investment away? It's all fine and wonderful to sit here in 2015 and tell people what you think they should have done 30 or more years ago before our politicians on both sides of the aisle screwed things up.
@The_Bishop: Thank you for laying your life on the line for the public for twenty years. Too bad there's a few unappreciative people out there who think running into a burning building while everyone else runs out is a cakewalk.
Very simply the state has failed to meet it obligation!!!! They should have been paying the full portion the entire time... Instead they used the money for other projects and towards other problems.... It's very simple pay up or declare bankruptcy and screw a lot of hardworking middle class families!!!! The teachers, police officers, etc.. did not create this proble the state of New Jersey did!!!!! The last I saw the public employees have made their contributions to date.... So have most if not all the municipalities..... So why can't the state of New Jersey??????
Me.tone There's a number of tangents here.
First the pension obligation is just that, a debt owed. I listed the choices but to not honor the contract is just that. Here's an example of pension default: http://www.washingtonpost.com/wp-dyn/content/article/2005/06/12/AR2005061201367.html
The state is not covered by the pension insurance so basically existing pensioners defaulted upon would sue the state; that would be fun. And in default, NJ's ability to raise funds would be zilch, the effects as I noted above.
Second the deal can be for the state to change for pensions going forward like going to a 401K. We can freeze current ongoing accounts and change the program to 401ks for new hires. But this would not relieve the current obligations.
We have covered this before, pensions and 401Ks are really not much different on the corporate books. No company is beneficent; they offer pension and 401Ks as benefits; you know the benefit to you; the company gets a tax break and pays you less in pension/401K dollars than they would in salary. That's the only reason they do them, it's cheaper than salary. I am lucky to work for a company that offered both initially; then they froze the pension and move to only the 401k.
But the real difference to you is pensions are managed by pro's; 401ks are managed by you. The pro's, on average, have a far better track record of making profit off the asset so, on average, the 401K is less valuable to you.
The problem with pensions for companies is suddenly people are living longer and the company's original forecasts of life expectancy fell short of the current reality putting stress on the "promise." Basically they screwed up on the formula. So 401Ks are a much safer risk for the company; they don't have to guess how long you will live.
401Ks did not even exist a few decades ago, only a change in the tax law made them possible. If we changed the tax law, say to allow companies to keep 10% of the profits off the pension, tax free, watch how fast they would shift back from 401s to pensions. It's all a matter of where the tax break money is are so if the company could recognize additional profit from a well-managed pension, they would win and so would you. It's a win, win.
The rest is politics but like I said, good luck escaping the current state pension obligation. Going forward, beyond Union contracts, changing from pensions to 401Ks is as easy as it was for companies. And then state workers can get less benefits just like the rest of us stupid knuckleheads knuckled under to. Or we could change the pension tax law to allow financially savvy companies to profit from pensions and then the rest of us could profit too. Those savvy companies would be the ones we would die to work for. Gotta love a win-win.
Typical iJay post of a sensational headline from a source that claims the teachers union have a crazy idea. Turns out that's just some sad writer twisting comments if another article, much like iJay does.
Btownguy JerryG,
Supporting pension reform does not mean you're unappreciative of firefighters, police, teachers, etc. Not at all. I appreciate them very much. It's the system and the mismanagement of money that I don't appreciated.
' if when you started your career 25 or 30 years ago, you were told you'd be paying 8.5% of your gross salary into a savings fund AND your employer was legally required to also pay in, can you honestly sit there and maintain you'd have also started a 401k (or the 1985 equivalent - CDs maybe?) and would have invested enough so that you could kiss that mandatory investment away?'
So, by that logic, you trust in the government, that noted institution with such a fantastic record of money management, to provide for your retirement? So, actually, yes, you could foresee the need to do your own retirement saving. Well, not so much me, I was still playing with legos 30 years ago.
I've been saving for my retirement since I started working. I've had an IRA since I was a teenager. I for one, was taught that I shouldn't count on one dime from SS, something I've been paying into for 25 years.
LOL, if you offered the pension to every worker in NJ (pay 8.5%) everyone would join as the payout is excessive. So, I don't believe public workers are getting a free ride, but I do believe they are getting an excessive ride; as in excessive compensation. This is as true as the Sun coming up every day folks...
GreenerPastures I don't recall the teachers, road crew, public unions et al. standing up and saying they had a fair enough package, we don't need any more unfair concessions. It was the gold rush and more was always better especially if they're stupid enough to give to us. Well it appears that fairness has come back to bite them in the butt.
One-Eyed Poacher One-Eyed,
So if your boss offered you a raise, or increased your vacation time, you'd say "That's okay Boss, I make enough money already?"
To those here that are trying to explain why the pensions should be paid I thank you. But you are trying to reason with people that have the automatic response of "Public workers have to many benefits and make too much money and have more than I do". No matter whether what is explained to those against the pensions, they will always say its too much. They will never want to hear that those missed pension payments by the State and local Government, went to make less of a tax bill on the taxpayers of the state. Our pensions used to pay state bills. They will never see it is right to pay these obligations. They were a contract signed with every Public Worker when they started work years ago.
boobalaa stranger danger you are losing it:
"But the real difference to you is pensions are managed by pro's; 401ks are managed by you. The pro's, on average, have a far better track record of making profit off the asset so, on average, the 401K is less valuable to you. "
I don't think the NJ pension fund beat the S&P 500 but incurred more fees. There are plenty of mutual funds that will provide a long term appreciation equivalent or more than what the "pros" have done for NJ pensions. In fact, mutual funds are run by "pros" and often better than the "pros" NJ is using.
I have never seen such a logic-less argument, I am laughing at this "difference" you state. The real difference is that pensions are based upon unrealistic returns and funding by the taxpayers...
Read this article Mr. G.
http://neatoday.org/2012/03/23/why-a-401k-is-no-replacement-for-a-pension/
Pensions give more PERIOD.
boobala, I do think the pensions that people have earned should be paid, and I've said as much previously. A deal is a deal. Even with the double dippers, excessive paid vacation, and sick time. It was the deal they had at the time. And they will get theirs. No politicians have said otherwise unless I've missed something.
I just think there needs to be reform going forward or there won't be enough for anyone, including the retirees. It's an untenable system and is going to bankrupt the state. Projections for 2016 have the pension/healthcare liability at 23% of the total state budget. It will only get worse if nothing is done.
I drive Rt 80 daily, and I must say that I'm fairly impressed at the speed and accuracy of the paving projects that have been ongoing throughout the state. The paving is being laid down quickly and, for the most part, accurately, with minimal disruptions to commuter traffic. Now all we need to do is find a way to keep the roads from self destructing in the winter time.
How much we're spending I don't know, but I'd guess it's a quite a bundle...
justintime iJay and his anti-union anti-public-employee rants continue on and on...conveniently ignoring the fact that a contract is a contract. Ignoring the fact that it's NOT the employees that have reneged on the deal; it's been politicians of both sides going back to the days of Christie Whitman who have stolen from the fund to pay for other things, including the infamous Homestead Rebate program, which was nothing more than a political scam to get votes.
Our current governor is just another one in a long line of governors who have raided these funds for every purpose OTHER than the one for which they were intended. The taxpaying public employees (yes iJay, they pay taxes too) have had their money that they trusted the state to wisely invest for them stolen.
Stop drinking the Christie Kool-Aid, and stop treating what these people earned over the years through their contributions as some kind of benevolent gift from the state.
And you keep ignoring that the compensation level and unjustified COLA increases were EXCESSIVE FROM DAY ONE. You need to wake up or more than likely you know all of this already; so stop insulting the intelligence of the other forum readers...
iJay,
It takes two to tango. Whether or not we may think the benefits IN A SIGNED CONTRACT are excessive, BOTH SIDES signed those contracts. No one held a gun to the heads of the school boards or town managers (or for that matter, Christie) when those agreements were signed.
You keep ignoring that...so stop insulting my intelligence and that of the folks here who agree with me with your "I hate public employees they are the spawn of the devil" attitude.
Christie didn't just sign off on a new agreement, or declare how he had finally fixed this whole problem once and for all, he specifically made making the payments in return for the paybacks a cornerstone of the deal. And then he completely reneged. What he got in the deal wasn't really all that stellar to begin with so his negotiating skills need real work. But worse than that the failure to live up to the agreement has put NJ's credit rating in the dump so all the debt is costing way more or is impossible to get. So now how do you get someone to come back to the table and give up even more for even less in return knowing it's all in bad faith anyway?
iJay - Your compensation level and unjustified salary increases are EXCESSIVE FROM DAY ONE. You're proposing we not only stop paying you, but we take away your house and assets you used your wages on. You don't buy that argument any more than anyone else.
GC what some of you probably believe - and funny to boot: https://youtu.be/dkHqPFbxmOU
5catmom The root of National and New Jersey money problems is buying peoples votes with the peoples own money, leaving winners and losers, Only one, has a printing press. Just like Atlantic City. The house wins till the house tumbles and it's everyone for them selves. We progressed to the poor house.and wind up depending on inflation to bail us out.
Man, I tell you what, OldGent knows what he's talking about in ALL these threads, he's seen it all, and he gets to the simple crux of the problem, instead of getting weighed down in all the party vs party/union vs non/ BS.
JeffersonRepub Vous with the post of the thread: "Why didn't any of you geniuses get in on the gravy train?" heh, heh.
"they will always say its too much." I think, on average, the total package for govt. employees is marginally better than private market workers; lower salary and higher benefits, much higher. However, it's not like govt. employees robbed us, private workers just are making less, especially in benefits than they used to. Private workers are the ones who really got robbed in salary/benefits and many have the response to make others as miserable as they are :>(
At this point I feel we need to meet our pension obligation or settle out of court. And, going forward, NJ should structure public worker salary/benefit packages to be competitive with the private market. Might not be right, hate to see pensions go away, but seems to be the way of the world. However, don't lose sight of the fact that private workers continue to make less money and less benefits everyday. That's the real fly in the ointment here, private market non-union workers have no bargaining rights and they are losing ground.
Ijay: Nope, I am pretty sure I am right. You are correct re unrealistic returns, I said as much when I noted the age/formula/estimate gone wrong in many pension funds. Not only did many pensions face that but the 401K replacement relieves the corporation from even having to run those financials. I would also add that the shift from pension to 401K allows many corporations to play some "smoke n mirrors" games like profit sharing that usually end up meaning less benefit to the worker than the original pension. And yes, there are mutual funds that beat pension returns. However, on average, like I said, pension managers have a better return than 401K individual investors, on average. Remember, a 401K is not just mutuals, on average. Most investors diversity.
I never calculate fees, just the bottom line so not sure about what you said there. I saw that comment from a NJEA financial wizard but no explanation. Nor do I expect the pension fund managers to beat the S&P500 without incurring too much risk. Yet I think they did since the bottom line tells another story. NJ Pension fiscal is like July so year 2014 ends July 2015. I think in 2012 it returned 14%, 2013 - 16.9% and for this year, 2014, 7.3% Projection metrics are for 7.9% so 2014 ending 7/15 fell a bit short. Five year average ending 2014 is 12.4%.
S&P average 2005 - 2014 = 9%, 1928 -2014 = 12%
Your link tells the history of 401Ks, I might try that later but pretty sure it's actually a longer-winded piece that agrees with info I have posted earlier.
Hope that clarifies.
JerryG you are a fool.
Do you approve of the feudal contract during feudalism in medieval times?
I call a spade a spade. If something is BS I call it out (as many of you know). The pensions were shady contracts along with shady Cadillac medical benefits because negotiators new they could not get more money in the front door (salary increases) rather in the backdoor through excessive pensions with crazy legislation that the taxpayer has to fund any deficiency and free Cadillac healthcare for life.
Wake up!
So let's do some math:
In order for a private employee to give themselves a $50k/yr "pension" using their 401k they would need to accumulate $1.25million in their 401k at retirement. I've seen a lot of 401ks but never one that big.
So to do that an $80k/yr employee has to contribute 6% a year With employer contributing 3% for 25yrs and have a 12% return EVERY Year. Doable but not guaranteed. Bump that up to 8.5% contribution with company matching half so $10k a year then only need a 10%return every year.
But still that is not guaranteed and if have a bad year like 2008 right before you were ready to retire you would have a huge problem. So yes public employees have to contribute now but they are still getting more out of their contributions then private employers while taking no risk.
Darwin Darwin, I don't know about other public employees but public school teachers have always had to contribute. In addition some, including me, put money (unmatched by anyone) into 403b.......... While I worked at least half my salary went to taxes, my share of pension, social security, and my 403b. I am comfortable now because I was very careful through the years I worked.
Darwin mentioned just to get a 50k pension it is difficult with a 401k. When you add the retiree medical worth 10-20k per year it is even better or harder to attain on the private sector...
5catmom, I am sure you will agree that if you had worked for a private school you would be in such worse shape, correct?
403b are completely different then pensions. You'd be surprised how many teacher clients I have that don't do a 403b. You were smart.
IJay for many years I directed private non- profit childcare centers............for lousy salary, decent medical benefits, and a trivial pension from one...........But that's not what I chose to do for my entire career. I chose to return to the classroom, in public school, get my masters degree and then 30 additional credits, participate in more after school hours committees, arrive and leave well before or after the kids were there. We make choices based on many different expectations and commitments. Mine worked for me and I worked hard for it.
Two points: Police and Firefighters contribute 10% of their salary into the pension fund as of the 'new deal'.
Second point: Stop talking about the public worker's pension systems as if they're one large entity. There are several: PFRS (Police and Firefighter Retirement System) which is around 77% funded and climbing. We contribute 10% of our salary every payday, and it's non-optional. There's the PERS (Public Employee's Retirement System) which is in worse shape, because it's loaded down with political flunkies and politicians and they contribute less. They're around 72% funded. There's the TPAF (Teacher's Pension and Annuity Fund). TPAF is in bad shape, but I don't have any numbers for it off the top of my head. There's the State Police pension system, and a handful more.
New Jersey pensioners are NOT getting something for nothing. The state’s average pension benefit is among the least generous in the country – PERS ranks 95th in generosity out of the country’s 100 largest pension systems, according to a joint analysis by Keystone Research and New Jersey Policy Perspective. A NJ Spotlight study shows government workers in New Jersey pay more for health insurance than anywhere else in the country.
Ok, partially answering my question but I see your personal position and do not disagree with it. Others who cannot let go of a system that is unsustainable is the issue, but human nature generally is not to give up things, at least to "strangers" (that is what it would be to not take as much from the faceless taxpayer).
Some non-profits compensate quite well as far as total compensation, but obviously not all.
Darwin:
Having run that "math" a few times, I have to admit I never ran the yearly deposit side. Probably is something they should teach kids in High School......... I have run the no-pension live-off your assets like 401Ks and yes, the totals were daunting. Especially if you target $100K and not $50K...... Toss in a shrinking Social Security or no security and poof, you implode.
But I do question your $50K requiring $1.25M. The thing about a pension is after you and your spouse depart, the pension is gone. A 401K might does not have to be. Makes a difference.
At $50K a year and bearing no interest on the asset, a $1.25M 401K lasts 25 years or to age 90 starting at age 65 before the 401K hits the end point of a pension: $0.
To do $50K a year, the 401K needs a 4% return on the 401K assets and at age 90, the 401K would still be worth $1.25M. 4% is pretty conservative so I think a good number given fluctuations. I start at 3% myself but run a few scenarios because I am wordy and nerdy :>)
So truth is somewhere in between draining with the 401K generating interest while you also begin to drain it gradually over your retirement.
I think to generate $50K a year in that method would require a good amount less than $1.25M given you drain the 401K slowly and return a moderate amount of interest on the asset. Right?
iJay,
When your arguments are indefensible a sure sign of immaturity is to fall back on being insulting to people who hold a different opinion than you do.
JerryG aka "fool"
iJay - I think the combination of 5catmom and The_Bishop have already done that. (in particular quoting an outside research company showing the contract is no where near feudal levels)
To do $50K a year, the 401K needs a 4% return on the 401K assets and at age 90, the 401K would still be worth $1.25M. 4% is pretty conservative so I think a good number given fluctuations. I start at 3% myself but run a few scenarios because I am wordy and nerdy :>)
Correct SD. To guarantee the $50k/yr you would need $1.25million. At worst case scenario getting 0% return that 1.25mil would last 25yrs. Run out of money at age 90 Or if you throw that into a Variable Annuity you could get a gauranteed rate of 4% which means you
could live off the 50k annual interest and keep your principle the same. So in that case yes a 401k would be better because it would be passed on to not only the spouse but to the kids. But that's getting the same income every year, no cost of inflation adjustments.
And yes when you increase the yearly pension amount to $80k or $100k the amount needed in a 401k is ridiculous.
iJay,
Since you have fallen to the point of insulting people personally, I have no desire to debate with you.
Refer to GC's comment above.
Also, Darwin, I understand that you were using 25 years of payments to compare it to retirement standards for the public sector, but the reality is that most private sector workers will be paying in for 40 years or so, so you don't really need a ridiculous rate of return to hit that target, whether it's $1.25M or higher.
ianimal Correct iaminal. I was comparing apples to apples. A public worker only needs to work 25 yrs to collect a full pension, for a private worker they need to high rate of return every year for 25 years to give themselves that same pension. Or work 40yrs. Still proves the same point
Put aside the puerile mudslinging for a moment. The state has accrued a debt. We live in a civilized society governed by rule of law. The fact is, the law at some point must be followed, otherwise there would be a breakdown in the order that civilization depends upon. The lawlessness that Christie has demonstrated is unprecedented in the modern era. Some facts are needed to ground the debate in reality:
The pension "crisis" is a political crisis, not an economic crisis. Once Christie leaves and the need to have a dead horse to flog for political gain removed, the long term problem regarding pensions will be quietly repaired, the state will make the back payments and life will move on. Will taxes be higher in the future? Yes, that is a certainty, for a number of reasons, the least of which would be funding the pension system. We are in the last stages of the Reagan era trickle down, tax cutting mania. Watch over the long term (10-20 years) not only will pensions be funded, but Social Security will be strengthened, expanded and yes, defense spending will be reduced to help pay for it, along with a hike in taxes.
Get used to it conservatives, the tax cutting, supply side trickle down Reaganomics of the last 35 years is in its death throes. Bernie Sanders is drawing huge crowds for a reason. It is over. There will now be a restructuring of the American economy to reinforce some equity into the system. Cons, your days are numbered. As the choir that sings your anthems shrinks, who will you turn to for solace
"The pension "crisis" is a political crisis, not an economic crisis"
Really? Maybe today, but what about the future? Could it be that the benefits promised in the past, lawfully I agree, should have been known to be unsustainable in the long run because of the "liberal" growth assumptions made by those who implemented the laws? Could it be possible that a tad bit of conservatism might have saved us from being in the position we're in today? To a liberal - no. There will always be a source of funds, the tax payer, and that's enough for them, right?
"Watch over the long term (10-20 years) not only will pensions be funded, but Social Security will be strengthened, expanded and yes, defense spending will be reduced to help pay for it, along with a hike in taxes."
Ah, still with the liberal assumptions. What about the effect of raising interest rates? We're approaching 10 years of ZIRP - have you calculated that into your assumptions? Or are your assumptions based on the immensly immoral option of defaulting on the trillions of dollars of debt that are on the books today? And also to your point, will the increase in debt, necessitated by your outlook, be a further burden or will you routinely dismiss that as a foolish conservative view? No, in 10-15 years the problem will be transferred somewhere else and hidden by more debt. That's the way it's been for 30 years and that's how it will continue until the debt becomes too much of a burden (which is must).
Maybe stop blaming conservatives and take a little liberal blame yourself for continually asking for things and assuming that forcibly taking them from someone else is always an option?
My view is well know - I don't favor R's or D's because BOTH are the cause of our current predicament. For a great many years now, both having jumped on the debt train and liberally abusing the privilege of power. The ONLY answer IMO is a conservative one, for if it isn't we will ALL be wallowing in our sorrow (all except for the 1% that is) because all of the "solutions" proposed are always about more, more, more. Trends can be a real bitch...
We need to pay the contractually obligated debt but future contracts with occupational employees need to free of the pers - its literally crippling New Jersey. They have access to a matching 403B plan - as in the public sector public employees need to manage their retirement
skippy No such thing as full pensions for teachers..not sure of the current formula but mine was years worked over 55. Or 5/11ths
Of course the "blame" can be shared by both parties.
There are two points: the first being pay your debts or default/renegotiate the debt. You just can't say, it was a bad deal so we're not paying. Default/renegotiation also has ramifications outside the debt itself like being able to raise capital in the future which could affect the entire NJ economy.
The second is benefits going forward and there, sad to say, it seems that making public worker salary/benefit packages competitive with the private market is the way to go.
Again the sad part of all this is that the private worker salary/benefit package has decreased over the years causing much of this disparity between private/public packages as private workers accept lower returns in the face of higher corporate returns and grossly higher upper level salary/benefit packages.
But the debt is a debt and must be dealt with unfortunately at the expense of many who were not even there to run it up.
Agreed. Old contacts must be honored. But going forward all new public employees should not get pensions. We need to do what the private sector did decades ago. Replace pensions plans for new employees with 401ks.
Chatting with a cousin from Wisconsin who is a cop. He tells me that many teachers make more than cops in Wisconsin. Things need to be done here ASAP...
And your point iJay is what? Police officers in Wisconsin are underpaid? Teachers in Wisconsin are overpaid?
Your statement has no bearing on New Jersey; average wages for a myriad of jobs, not just those who are public employees, vary all across the US.
Same old comments. Really disgusting that some of you think all teachers make enough money to get by on and their pensions don't matter. The pension and benefits are the reason that anyone would take a job that doesn't pay very much
Argue all you want, come and see my spouse's paycheck at the end of the school year, add on what he makes in the summer (diddly squat) and compare to your own paychecks...I doubt he makes as much as you (iJay). Sick to death of hearing how lucky public employees are...working for years without contracts, low pay, having to hopefully find a job every summer (would be nice just to work all year round), making less every year because someone thinks they should pay more towards their benefits, pension system that is scary at best. Come work as a teacher, you would be scared too. Get the frick off their backs, when you've walked in their shoes (i.e. not spouting off inaccurate facts) then you might have the right to make comments.
So tired of people like iJay that have NO right to discredit a teacher's profession, security and future. You're crazy if you think teachers and their families are living the high life. Get a life, leave teachers alone...seriously!
tripsy iJay,
No one is denying there are changes needed going forward.
First of all, we need a governor who keeps his word AND upholds the agreement he signed. Public employees are holding up their end of the agreement but he continues to make national political news with his campaign statement "I broke the unions in New Jersey" bull poop.
Secondly, a new plan needs to be developed for FUTURE public employees, but those currently in the system who were promised specific benefits need to have those promises respected by our politicians.
Lastly, people who continue to call those who disagree with them on this forum "fools" need to shut up.
Hot corner Been through this before. When accounting for number of working days teacher salaries are pretty good. Not great, but not bad either. Anyone recall the thread where the numbers were hashed out? I'll look later when I'm on a regular PC.
I agree about not bashing the teaching profession, but low pay isn't really the issue any longer. Everyone wants higher pay, not just teachers. Now teacher aids, on the other hand, get screwed royally IMO...
Yes, I remember OK but not great. And the bene's were better. But if you play the full year/partial year math game, you really must account for full year including avg. teach pay and summer time pay for those who work to get the accurate picture. Just extending the part-year teach pay to full year is not apples-to-apples.
Sure, the summer's a bummer or a godsend. I would hope after a few years you would be in the later position.
So I conclude if you are working for bene's and like summertime flexibility, not a bad gig.
"The pension and benefits are the reason that anyone would take a job that doesn't pay very much"
I thought it was for the love of the kids?
http://www.nea.org/home/38465.htm
Avg beginning salary for teachers in NJ is $45k
Avg Teacher's salary in NJ is $63k
pretty on par with most private sector office jobs.
Comes out to roughly $43/hour -> 63,000/ 182 days / 8hours
Working the summers is a tale. 8-10 weeks off each summer. Many teachers start one week early, some two (some none). Cadillac medical all year and through retirement. The taxpayers can no longer afford this, sorry...
Yeah Old Gent I reported on this upcoming trend some time ago. Like 401Ks, providing employees a stipend and sending them to the exchanges has been evolving for awhile now. While many will blame the AHCA, fact is companies have been beginning to move to "corporate exchanges" well before the AHCA. Think of "Corporate Exchanges" as yet another state exchange, this time the state being the corporation. They have been around for awhile and is what most corporations have been using. GE using the state exchanges is relatively new. But don't think the AHCA matters much since there are plenty of corporate exchanges out there.
This has nothing to do with teachers and everything to do with workers being screwed. The benefit bottom line is just that and GE is paying MUCH less in benefit than they used to. The company used to pay about $1,500 and now they pay $1,000.
There are a few things one might do:
Unionize and fight for salary/benefit rights
Ignore these companies when you make buying decisions
Take away their other tax benefits, GE is renown for not paying taxes
Continue to support improvements to the AHCA, we all might need lower cost insurance......
Perhaps there's something can be added to the AHCA to stop these large companies from reducing benefits and throwing folks into the system (probably unlikely). Certainly was not the intent to provide a way for corporations to lower benefits but like I said, the corporate exchanges have been out there for a few years now. Fact is workers are continually getting squeezed as corporate profits soar and ultimately this pain will be put on the public sector too. Unless GE and other worker-robbers feel the pain in the purse, figure the exchanges are coming to a company near year probably combined with a cut-back in benefit which is the real bottom line.
Retiree medical for public workers is protected by NOTHING. Most private companies have dropped this benefit and it is always a standby to cut, which everyone knows...
You are right SD. It happened to me long before the AHCA, In a private Edu. employer.
No Cadillac medical iJay, sorry, you're wrong in that one...it's the same medical as all my professional friends, but now costs even more to get. In fact, our benefits are changing AGAIN come this September, less coverage and same cost, all to save taxpayer $. But, the Superintendent is still getting his/her 6-figures and MANY stipends...sure, taxpayers should pay for their cell phones and car costs, makes sense (NOT).
The point is, teachers know the benefits make up for the lack of never making 6-figures, but when you take away the benefits and pension perks, it is not fair.
I just read a news story about how teachers in KS are leaving the profession (and state) in record numbers...that's what's going to happen here. Teachers will decide to leave their positions and kids in college will decide it's not worth the lack of benefits, and not want to hear the public complaining about them. Then we'll really be in trouble.
Why is everyone fighting over the crumbs, when it's the people at the TOP who are screwing all of us. They are causing the distraction and fueling the war of public vs private workers so that they can rape us all and no one notices because we are squabbling over the crumbs. Wake up and take a ride over to Mendham or some other town we couldn't possibly afford to live in and ask them how they are doing.
Have a nice day
crazyjane Billions of dollars contributed by the employees to their own plan over the years...billions of dollars OWED by our governor who refuses to honor the agreement he signed.
Owed? Unions manipulated easily manipulated politicians to get to your OWED. It was a scam, do you understand this?
Contracts negotiated by BOTH SIDES. Agreements signed by BOTH SIDES.
Where's the manipulation in openly negotiated contracts? Where's the gun the union held to the politicians' heads to force them to agree and sign?
Did your mortgage company scam and manipulate you? How about the last time you took out a new car loan; were you scammed and manipulated then, too? Or did you enter into those contracts fully aware of what you were signing? Maybe you should go to those lenders and pull a Christie and refuse to honor your contractual obligations? Obligations that YOU knowingly entered into?
What makes me laugh is how 'unions manipulate politicians'.
I've been a firefighter in Hudson County for over 20 years. I've seen numerous contract negotiations.
We have *never* had the upper hand. Not once. My take-home pay has been marching backwards for the last five years. I'm taking home *less*, every year for five years.
Yeah, sounds like we have a real choke-old on the politicians.
Pensions are *not* a scam. The system works just fine, *when both sides do their part.* The problems arise when one party decides that "Hey, things are just ducky right now, so we're going to skip out on our end of the deal for about 10 years."
In the late ninety's, the PFRS system was in excess of 100% funded. Since politicians cannot abide to see something that works without their interference or piles of cash they can't spend, they had to do *something*. That something was robbing from what is part of *my* compensation for 25+ years of putting my life and health on the line to serve the general good.
Even after the politicians robbed the system, we're *still* close to 80% funded and rising.
Yeah, sounds like a complete scam and can't possibly work.
iJay, do you have *any* real knowledge of what you spout off about? Have you done any research? Or do you lurk in your basement, listening to right-wing radio while watching fox news and mainlining the kool-aid from the tea party?
You come across like a hateful, jealous ass. You also sound like a complete fool to *anyone* who has done even the slightest research on the issues.
and adding to Jerry G's comments, when both parties are unable to reach agreement, a state mediator is called in and then if there is still no agreement, there is an additional party brought in who can impose a settlement (sorry I can't remember the name of that step/person).....there is nothing one sided about the process..............
"Union Negotiating" -- No sir! Union extortion. Time for some on this forum and wake up. You are not in middle school anymore, please use more intelligence...
BTW, I am not talking about the "take home pay" component of your salary. The "non-take-home-pay" is what is of most concern, unless you have been getting over 2% average annual. Your pension and retiree medical is not sustainable, it was pushed in years ago like MOST other public "programs" without proper funding, kick the can down the road, we will "find a way to pay in the future", the "taxpayer will fund any shortfall in the future".
Let's define extortion: http://criminal.findlaw.com/criminal-charges/extortion.html
"Most states define extortion as the gaining of property or money by almost any kind of force, or threat of 1) violence, 2) property damage, 3) harm to reputation, or 4) unfavorable government action. While usually viewed as a form of theft/larceny, extortion differs from robbery in that the threat in question does not pose an imminent physical danger to the victim."
Once again, who held the gun to the politicians' heads to force them to agree and sign? Before ANYONE on this forum starts throwing around comments about the commission of crimes, it would behoove that individual to also use more than "middle school intelligence."
iJay, please let us know how you make out when you stop paying your mortgage or car loans because your bank "extorted" the money from you
The public employee pension system IF THE STATE KEPT UP WITH IT'S LEGALLY REQUIRED CONTRIBUTION would be sustainable. But's it's been the rob-Peter-to-pay-PAUL games of Christie and his predecessors that have left the public retirement system -- not to mention the Transportation Trust Fund -- unsustainable going forward.
iJay, lease stop insulting everyone's intelligence with your public employee vs taxpayer crap. The_Bishop, are you somehow exempt from paying taxes? What about you 5catmom, does the town not bother to send you tax bills knowing you don't have to pay? Newsflash iJay, public employees are taxpayers, too.
God help the United States if Chris Christie was through some miracle to be elected president.
uh - hmmmmm do I pay taxes..........income and property .................indeed and quite a lot.............and.....................shockingly I donate quite a lot to all sorts of charities..............
For the 50th time... if you are an INSIDER then paying NJ taxes is not such a burden given the monetary benefits you have and/or will receive. If you leave NJ, as many do, you will fair even better; but that is besides the point as it applies in general to everyone.
Do any of you public workers understand this simple concept? Saying "I am a taxpayer too" means nothing when your pension and retiree medical "rewards" GREATLY EXCEED any excessive taxes you pay in NJ...
Then why why why are you still here iJay? You never say anything positive about New Jersey, and you degrade, insult and talk down to everyone who disagrees with you. Your condescending attitude, quite frankly, sucks.
You refuse to acknowledge that a contractual agreement should be honored. You constantly belittle anyone who is a public employee and expects the state to live up to their part of the contract. You show no respect to our police who never know when they'll be forced to make a life-or-death decision; you show no respect to firefighters who rush into danger when everyone else runs out (ask the families of the 343 FDNY firefighters killed on Sept 11 if their loved ones "extorted" money from the politicians). You show a special venom towards the teachers who dedicate their professional lives to educating YOUR children.
If New Jersey is so damned horrible of a place to live...then why not move?
You keep avoiding the question(s). Basically, you are saying:
1) A contract is a contract is a contract (no matter that it was brought in under corrupt means)
2) Leave Police, Fire, and Teachers alone as they protect and teach the masses.
NJ is not such a horrible place, but it WILL BE if the taxpayer is forced to continue to pay for excessive public sector benefits.
Don't think I am alone in my way of thinking, many of your neighbors think the same, they just want to be neighborly and say nothing...
Where is the corruption in a contract that was negotiated by two parties and signed by both parties?
Except for three years in the early 1980s I've worked in the private sector my entire life (I'm 61). You may find it hard to believe, but there are plenty of private-sector employees who think as I do...that signed agreements should be honored; that public employees deserve respect (just like everyone else) and NOT vilification.
iJay, I don't know what you do for a living, but if you're employed the cost of YOUR benefits is passed on to someone else too. If you're engaged in manufacturing, that cost (along with direct payroll dollars) is passed along to the purchaser of your goods. If you work in retail, ditto. Healthcare? Benefits costs there too are passed on in the form of higher rates. A physician? A lawyer? An architect? When you set your professional fees, you factor in what it will cost you for private health insurance and what you want to put aside for your retirement, and that effects the fee you charge your clients. The benefits you receive are a cost of doing business, no matter what you do, and are passed along to the end purchaser of your "product" regardless of what that product may be.
You seem to want to continue to make the argument that ONLY public employee benefits are passed along to the end consumer (the taxpayer) and conveniently forget that is not the case.
I agree totally that my total compensation is passed on to my companies customers -- it can be no other way.
The difference is that the customers can voice their distaste with rising prices by looking ELSEWHERE.
If a taxpayer, not just iJay, feels prices (taxes) are too high then what is the recourse?
Oh my word, iJay you need to move...I don't know where to because all public school systems are funded by taxes! Wouldn't it be nice if it could all be privatized and we wouldn't have people like you complaining about what teachers should be entitled to (apparently you feel they are entitled to nothing). It's a career, not a hobby and they should also be able to contribute towards their pension, have that contribution invested and matched by their employer (the government). Just because you pay taxes and the taxes fund the school's does not mean you can say what the teachers receive.
"Just because you pay taxes and the taxes fund the school's does not mean you can say what the teachers receive."
Of course iJay has a say tripsy, as does everyone else. But his only recourse is through *voting* to influence the FORCEFUL TAXATION that is used to pay public employees. Teachers, more so than anyone, should understand this, and if they claim they don't then their motives should be thoroughly questioned.
It's easy to be mad at iJay for his views, but it should also be easy to understand them.
iJay: The recourse? Exactly what you said: look ELSEWHERE. In other words, MOVE.
Insofar as Justintime's comment about FORCEFUL TAXATION...please tell me where in the world I can move where I can decide how much tax I want to pay?
Without that FORCEFUL TAXATION we'd have no roads, no sewers (and yes, not everyone is connected to a sewer), no police protection, no fire protection, no schools, none of the things that come along with living in a society in the the 21st century. Our taxes accomplish much more than just paying salaries.
You could, I suppose, go live in a cave somewhere, hunt/grow your own food, and be dependent on no one. And if you venture far enough "off the grid" you'd likely not be paying taxes...except when you had to venture into town to buy the things you couldn't make yourself - then, unless you lived in the few states without them, you'd pay sales tax.
Transporting yourself back to the Middle Ages would only mean you'd be run through with a sword, hung, or had your head cut off for failing to pay your taxes. Now THAT is forceful taxation.
It's a very small state, not hard to move a few miles in a couple of directions to find another state. Don't even have to change jobs. And I can vote my disapproval.
Yet there are many things I buy where I find all the corporations distasteful and have no other choice but to pick one. And I can not vote my disapproval unless I buy a lot, a lot of stock.
I think the analogy works both ways.
And where aren't you forcibly taxes and in what century? Just wondering on that one.
iJay:
Extortion requires the use of force to attain compensation.
How, exactly, have police and fire 'extorted' anything? We are forbidden, by law, from striking or work slowdowns/stoppages. On top of that, I can't see anyone in my field saying, 'Screw those victims, they didn't sign my contract.' We're just not wired that way.
In what way are public sector benefits 'excessive'? Cite examples and sources, not generalized comments.
You keep making general, far-flung comments with little to no knowledge of what you're talking about. I happen to *know*, as I'm one of the people you're attacking. I'm a public worker. I take part in contract negotiations, I've taken part in arbitration cases, which is where most of out negotiations have ended up, as the politicians know they're getting a state appointed arbitrator who has the authority to say, "Here's the deal you get. Enjoy. You have no other recourse." Again, *STATE ARBITRATORS*.
iJay, I'd really like to know what your line of work is. Two reasons, actually; the first is everyone would know if you're a blowhard when you talk about 'your employees' as if you run some fortune 500 company. The second is so I can ensure that not one nickle of the money I earn ever passes into your hands.
I mostly agree with the people defending the public servants, however, I wonder if any of you have heard of policemen working a super amount of overtime in the last few years of service (on which pension is based) in order to get the pension for the rest of their lives artificially high?
Is there an opportunity in the private sector to do that since if there is, I would like to apply.
TM
Troublemaker "Without that FORCEFUL TAXATION we'd have no roads, no sewers..." blah blah blah
Spinning again - Taxes are necessary. Got it. Check. Point for you if that makes you happy.
The point is that we have NO CHOICE other than voting or having violence used as coercion against us to extract whatever funds are "fair" to pay public workers. Agree or disagree?
iJay communicates his frustrations and all you can say is the equivalent of bend over and take it. History tells a different story of how that will turn out in the long run.
Back to the subject, folks working in the public capacity know full well that a raise in pay means forcibly taking more from their neighbors. Again, not rocket science. iJay has a problem with that. So what? Certainly that is to be expected, no? And if you don't agree with that, tell me how many people do you know that would *voluntarily* pay more in taxes, on their own and not as a whole, to increase pay for public workers. Very few I would imagine. Also, why bother claiming tax exemptions or credits? If you want to pay more, by all means do so!
Then let's get it privatized! How in the world can you expect someone never get raises, not get a decent pension and have to pay a lot for benefits?? If it's has to do with taxes, then let's not do it anymore...all school is private, good luck with that!! Or homeschool, I'm sure that will be easy since teaching is so easy.
Forced taxation...of course it's forced.
Justintime,
So are you saying that no one who works in the public sector should ever get a salary increase? Would you commit to a job for your entire career at the same salary you received when you were first hired??
Troublemaker, in New Jersey overtime is *not* pensionable. It has no bearing on what your pension will be.
I never said that I do not want to fund schools, police, fire, etc. Is it take it or leave it (of course not)? So this is your response? Sirs, I want public spending trimmed, trimmed of excessive total compensation which mostly comes from retiree medical and pensions, but also comes from cashing in sick days and too many public workers...
"! How in the world can you expect someone never get raises, not get a decent pension and have to pay a lot for benefits?"
Welcome to the private sector!! Lol I didn't get a raise this year, benefits luckily stayed the same (still high)and my company stopped pensions long before I joined
“Where free unions and collective bargaining are forbidden, freedom is lost.” ~ Ronald Reagan, September 1, 1980
I guess you've never sat at the negotiating table....your vision of it is inaccurate ...at least in my experience
As you would assume, no I have not. I only need to see the results of the "negotiations" to come to my conclusion. It is so easy to see IMHO, but like many things there are multiple (opposing) views...
http://www.heritage.org/research/reports/2011/10/assessing-the-compensation-of-public-school-teachers
Pretty good summary IMHO, I may have posted the URL in the past...
Bottom line, when either side says 'do your research', what they're really saying is 'look at the research that supports my view,anything else is bunk'. Blame always goes to the governors, but the state legislature and unions also signed off on these deals. Deals which changed the rules of the game i.e. assuming a different rate of return in the early 90's, magically 'over funding' the pensions overnight.
Don't let the union leadership off the hook either. They signed deals allowing individuals to receive two pensions and collect vacation and sick pay from the 70's, payable in today's dollars, which is part of the reason the system is in trouble. And many of those individuals are the highest earning state workers (sherriffs, principals, top administrators). That's taking money from the fund that could support the retirement of two or three teachers , firefighters, police officers, etc. Maybe more. That's since been corrected going forward in many ways, I believe, but we still have to pay the bill from the past commitments, which isn't helping the current situation with the NJ budget and pension shortfalls.
The Heritage Organization (HO) is generally spot on with the facts but skews the assumption set as far to the right as is humanly possible. In this case:
- they start by admitting that on an apple-to-apples educational achievement basis teachers are compensated less, total package, than comparable private sectors workers. They also conclude both less wages and less benefits. This is based on Bureau of Labor Statistics data. Got it: less wages and less benefits.
- they conclude it's not apples-to-apples because teacher skills are less worthy than private sector workers with the same level of educational achievement. To prove that they note teachers leaving get paid less, teachers coming from private sector get more, and public teachers earn more than private teachers.
- Then they talk about secret fringe benefits like "public-sector accounting practices that allow lower employer contributions than a private-sector plan promising the same retirement benefits," health care not included in BLS statistics (of course), and a 9% package increase when HO's magic model for calculating the dollar value of job security wage benefit is used.
Bottom line = apples-to-apples less bene's, less wages before HO approach. After HO approach, salary less, bene's make total package 52% better than private sector.
True bottom line IMHO. According to HO, anyone with similar educational credentials who is not a teacher is a blithering idiot. According to HO, these educationally stupid, lazy, dum dums are raking it in at 1.5 times your pace.
So lets go to the tape. To fine-tune the BLS salary computation, HO throws it out and adds quite a few more assumptions and estimates to get their desired answer. That's the rub, more assumptions and estimates.
To fine-tune the BLS salary computation, HO tosses it and uses yearly census self-reported data. To get a statistical valid salary sample they crunch ten years of results. That means they have to estimate all ten years under the current value of money. Doubt they did anything for market changes in salary over a decade. Now, I don't know about you, but if someone I don't know asks how much I make, the chance of accurate response is very, very slim. While this provides a different number, the conclusion was still that teacher's salaries are lower.
Then we jump to HO's crowning statistical achievement that education levels are not sufficient and must be tweaked to get to apples-to-apples "quality." This is because engineering is worth more than French literature. To do this they use is first-year self-reporting for major culling the education majors from others. We can argue the validity of that but the bottom line is that have to agree that teachers are not as smart and don't work as hard in school, but that HO has somehow magically balanced the scales via their choices, assumptions, estimates and data manipulation.
HO concludes teachers are not as smart, don't work as hard, and their degrees are easier. Gosh who could argue with that. One might also conclude that engineers can only process math equations like monkeys, are not capable of doing anything else, dress badly, and if they had a working brain they would be mathematicians instead. You know, a real degree. And we all know that software engineers are smarter, work harder, and have harder degrees than mechanical engineers.
Where does it end? Which is more accurate?
We then go to private school versus public school using a subset of the self-reported data, teachers leaving and private workers becoming teachers using a Georgia and Missouri sample from the 1990's with HO even admitting the data is not precise.
It is a view, but a view with more assumptions, estimates, and imprecision.
In the spirit of beating a dead horse..... I could go through the HO benefits extraction where they get the big 52% compensation bump since I think they made some errors in logic, but another day.
The point is that HO makes lots of assumptions, lots of estimates, and pulls less reliable data to make their point. How about this: if teachers are making 1.5 times or 52% more than comparable education levels; has anyone every seen a teach living at 1.5 times the level of.........almost any college grad in the private sector? Really?
Since the HO authors pride themselves in apple-to-apples educational resumes, I wonder whether these two Ph.Ds. have the right degrees to be smart...... We know they're phfffdocktors, didn't get the degrees to be real doctors...... you know, the ones who consult and teach but don't really work pfffdoctors..
But let's go to the tape:
Andrew Biggs got a B.A., philosophy, Queen’s University of Belfast; that's like a step smarter than a toad, not really engineer quality. Then, M.Phil. social and political theory, Cambridge University, good school, lazy dum dum gut major. Followed by M.Sc., financial economics, University of London, and Ph.D., government, London School of Economics. OK, this guy's studied philosophy, social theory, political
theory, financial economics and a Ph.D. in government. Government? Not even American schools. And he has been in US government positions, mostly Social Security, until jumping to consulting for the right wing. Teachers laugh at him. Hmmm, one of the architects of Social Security telling us how to add........ Couldn't even hack American schools.
Jason Richwine, Ph.D. from Harvard. I would do the same shtick here but I think this is better, they FIRED him for being a rocket scientist in social theory. And he had the statistics there too! Read why HO fired him: http://www.thenation.com/article/why-did-harvard-give-phd-discredited-approach-race-and-iq/
I'm sorry, you just can't make this stuff up.
Mr. Google this is not the first dead horse you have beaten. You question these degrees but at least there was not a PhD. in History or Education...
No, it was a PhD in government followed by a career making Social Security what it is today. The other has a Public Policy PhD, fired from HO for his racist dissertation.
My conclusion was that these gents use a self-reporting inaccurate database with a whole lot of assumptions and estimates to arrive at a result of teacher's not making less and having less benefits than the BLS database comes up with but instead making less but having "benefits" that derive a full compensation package that's 52% or 1.5 times higher than comparable education levels. Comparable education as assumed by these two gents whose own education is not comparable to those who should have attempted this task.
IMHO the acid test for the HO study is that if teachers are making 1.5 times or 52% more than comparable education levels; wouldn't that stick out to everyone?
It's a huge number putting teachers on par with jobs paying far above theirs.
If these gents have a point, IMHO their results negate said point.
The pension with little funding plus the retiree medical is most of the 52%, I see it...
Ijay, Yes and it's in the benefits that things get really HO-hinky. Basically the authors spend most of their analytical time on their "cognitive" analysis of salaries which concludes, after using inaccurate self reported data sprinkled heavily with assumptions and estimates, that teachers get paid less but less less than a simple "years of education" measure using accurate data. Less is still less so they move to benefits.
When they jump to Health Care, according to the authors, due to a lack of data, suddenly it's teachers against the world of private sector companies with 100 plus employees, sometimes against the entire private sector. Education levels are out the window, "cognitive" assessments gone, just teachers against the world of large business including small of large like the fast food joints, walmarts, etc. Low and behold this results in a retiree coverage level of 18 percent with a freeze level of 30% arriving at a very small number. Teachers retiree health = 10% of salary, equivalent private sector = 1%.
I ask the reader; how many of us with four year degrees don't have retiree health? How many of us with Masters don't have retiree health? These guys estimate only 10% of us with college degrees have retiree health versus 100% of teachers.
For pensions/401ks, HO tries to explain how 401Ks are different than pensions basically because of bad employee management (401K) versus good professional management (pension) which basically makes the pension more profitable and therefore needing less state funding to achieve the same goals. Well, it's like I said that myself but HO comes to a different conclusion; they say the teachers are getting a better deal with less contribution by the employer. Or is it private workers accepted a worse deal, even welcomed it, asked for it? So, wait, which educational degree did HO say was the lazy idiot?
Remember this next time someone says "let's privatize social security so we can invest it ourselves and make bigger profits."
HO concludes that private workers get a 6% wage perk for a 401K and 31% for a pension due to the fact that pensions require less funding but provide greater benefit via pension investments and then a whole lot of assumptions and estimates. It's true that pension investments have a higher return than 401ks on average due to professional management versus employee management. But that's all after the fact of company involvement and contribution. It's moot to the comparison of compensation. The HO logic is flawed on this one. Then to say pensions require less funding than 401Ks flies in the face of any sane accounting. Pensions carry more risk to the corporation, but less contribution: not bloody likely. I can go into the math but our heads would leak so try this: do you believe that companies moved to 401Ks to spend more money or to spend less money? I would say this assessment is busted.
The authors also leave out a couple of corporate perks for 401ks. First a lot of companies sweeten the 401k with profit sharing; this allows them to offer a smaller contribution unless they spin some extra contribution during profitable years. They also lower the contribution because their perk to you includes the profit. Kind of like the pension profit assessment without having to make it up if they don't turn a profit: i.e. less risk. Second 401Ks are often invest in company stock purchases; no prudent pension would invest the company (unless you steal it like NJ). Authors completely left out these 401k corporate savings and profits.
I think the HO education comparison is interesting with merit but a lack of solid data and sound assumptions and estimate. Their benefit assessment is hackneyed and fraught with weak assumptions and statistical data support. A lot of it seems to fly in the face of common sense.
Found this list of pensions greater than 100k online. I can't attest to the accuracy.
http://watchdog.wpengine.netdna-cdn.com/wp-content/blogs.dir/1/files/2015/02/2014-100K-club-by-pay.pdf
And the pensions go on and on. I wish I could get over 100k a year from approximately 55-65 yo when retired.
I am not sure what to make of these pension lists; lots of big numbers and lots of people earning more pension than earnings. So I googled a few from the second list and the averages popped up which aren't out of site.
Here's number one:
"A Z Yamba was born in 1938 and retired from Essex County College on 04/10 after serving 43 years. Yamba collects a member pension that is funded by the PERS - Public Employee Retirement System. Yamba's monthly pension payment of $16,250 - based off a salary of $276,952 - is 12 times greater than the average pension for retirees from Essex County College ($1,356.13) and 7.5 times greater than the average New Jersey pension ($2,170.84). On this payment plan, Yamba collects $195,000 annually. Pensioners from Essex County College have retired, on average, with a salary of $39775.4 after 21 years of service." http://nj-pensions.findthedata.com/l/84643/Yamba-A-Z
Here's number two: https://en.wikipedia.org/wiki/Charles_T._Epps,_Jr.
So the average NJ pension is $25,000 and these guys are part of a small, but growing, 1% club. Fire and Police get the largest pensions. Here's the stats: http://www.gloucestercitynews.net/clearysnotebook/2015/02/100000-plus-state-pensions-double-in-new-jersey.html
I wish I could have gotten over 100,000 when I retired from teaching----
fortunately I was very careful and planned ahead - knowing I'd never get a pension anywhere near that size
I'd say we're about average however the pension was capped a long, long time ago so to do apples-to-apples would have to put in value of 401k contributions from the cap point and any residual in the 401K at death. There's also a profit-sharing fund which continues to grow which I would have no way of estimating it's value for the future.
I will say the pension payout was about a 10% return on the asset which is something I would be hard pressed to do year over year in a 401K.
So in comparison, given salaries, I would guess the NJ payout is much better than mine.
I hear you Old Gent. If the home taxes were lower in NJ I wouldn't be as concerned. Oh wait- medical care costs!
Looking at that list from 'A Good Day' I recognize some of those names. Enough that I can confidently say that 90% of the people on that list are political appointees/flunkys. They are *not* the rank and file, those are either 'The Politicians' themselves or their 'staunch supporters'.
And yes, they are part of the problem.
We all would wish for that 5catmom in isolation (not caring where it comes from) but it comes from the taxpayers.
A system like in Canada (national pension program) is much more fair and the accounting more clear although it still has socialist benefits like early coverage for eligible individuals (spouse death and single mother of minor(s), etc.).
A pension system in theory is not bad and can be quite efficient. But the pension programs we have in NJ are completely broken and UNFAIR to the NJ taxpayers that do not receive/or will not receive a benefit.
I am 100% for a fair and responsible nationwide pension system in the USA like in Canada; but short of this I am against corruption through Union manipulation...
Here comes iJay again with his "Union manipulation" and "union extortion" line of crap.
Once again...how can a contract negotiated by BOTH sides and signed by BOTH sides be manipulation and/or extortion?
For someone who complained three days ago about "beating a dead horse" you seem to do it quite a bit.
iJay, some clarifications and I am no expert so.... First, comparing NJ pensions to Canada is not apples-to-apples, not that it was your intent. And while there's something wrong with NJ State pensions as the links above highlight plus the double-dipping problem, for the average teacher, they look comparable to private sector to me, at first glance. Would love to hear more.
But saying Canada oh Canada is better because of Canadian Pension Plan (CPP) is only part of the story. First, the CPP is not equivalent to a private/public pension plan. It is more equivalent to Social Security and pays about 12K per year on average, SS pays about 15K right now. CPP is not a huge leap better than American SS. Plus Canada also has the Old Age Security program, OAS, which is another $6,000 to $12,000 per year in retirement supplementing the CPP. Canada also has a 401K like program called RRSP as well as other 401-like plans, individual RRSP (like an IRA) and TFSA (Roth IRA) which may or may not be used.
And then there's Canadian pension plans.... 20% of Canadian private workers have them and, hold on to your hat, 87% of public service workers have them.
I do agree that a national pension system is a good alternative to our shrinking 401K benefits and disappearing pension benefits but where you end up is basically SS on steroids since $15K is a safety net, not a pension. Not sure whether America is ready for that level of taxation.
Another approach is to re-engineer what got us here. SS is a mandate. Pensions came into being because corporate tax breaks made it a good deal all around. Not a mandate but an inducement where, as JIT would say, redistribution of the public tax revenues caused companies to take advantage and offer pensions to workers. 401Ks too are a tax break intended to add pension-plus perks to upper management but soon offered as the replacement to pensions with equal tax breaks to the corp, reduced corp. risk (of pension profits not occurring), and the chance to lower benefit payment amounts during the transition to 401k's like tying payouts to profits (smoke and mirrors). Obviously if we jiggered the tax laws to make these programs we can rejigger them to bring the pension back in a heartbeat. This might be more acceptable to the American taxpayer.
The other piece is nationalized healthcare. Ironically, it would be the rich and public workers against as these folks would not want to pay 8% of the salary towards such a plan.
Too much BS on this forum. JerryG keeps harping about negotiations that we made between 2 parties. These negotiations are not fair to the taxpayer since politicians give into the unions or the most part; what is so hard to understand about this -- unless you do not want to understand...
"unless you do not want to understand..."
...or you are on the receiving side of a good thing. ;-)
For the record, except for three years in the early 1980s I have worked my entire career in the private sector. I have never been a member of a union. I am 61 years old.
I just happen to believe that signed agreements should be honored. I've always paid off my debts, no matter how tight my finances may have been along the way. I've never whined about any contracts I willingly entered into.
What I don't understand is why iJay (and I guess Justintime, and others) seem to feel it's acceptable for our governor-in-absentia to renege on agreements he signed to repay the monies stolen from the public employee pension funds. His creative accounting and lack of fiscal accountability has led to a record number of credit rating downgrades for New Jersey.
Christie's refusal to face reality and even consider an increase in the gasoline tax (the only fair way, IMHO, to fund road repairs is by the people who use the roads) is only so that he can stand up on the presidential campaign trail and continue to proclaim "I never raised taxes in NJ." It has never been about his love for the NJ taxpayer -- it's all about his appeal to Republican voters.
If you don't like the politicians that were elected by a majority of the voters, if you feel those politicians "give into the unions" then oppose the current officeholders and support candidates who think as you do, or even better, run for office yourself.
Hell, you could even pull a Christie, promise the public employee unions that you'll NEVER cut the pension funding, and then turn around and stab them in the back, too.
But if a newly elected official wanted to renegotiate contracts and reduce payments towards union benefits then I'm fine with that because THAT would be a mutually entered-into agreement.
Ijay-as a public worker, I already pay just over 8% of my salary for healthcare, In addition to the 8.5% of my salary for pension, and a bit to have disability insurance.
Additionally, changes already made to pension have reduced the amount I will get upon retirement, as well as eliminated contibution free healthcare and cola's. I know the changes are not nearly what you want to see, but you act as if there have been no changes at all, which is not the case.
bac Those things should never had been there before -- no contribution Cadillac medical and COLA for pensions. Just look at the private sector and see what the average hard-working Joe gets...
bac,
Didn't your parents ever tell you not to try to have a battle of wits with an unarmed man?
Lol, I should now better, JerryG. Just couldn't resist when he stated that public workers wouldn't want to pay 8% of salary for health care, when many of us already do. Lesson learned, sir!
getting dang tired of sitting on my hands while shaking my head.............time to hear from k-elll
But you get that healthcare into retirement, who would not want to pay 8% after retiring? The money is not there for retiree medical, and it (unlike pensions) could be cut with little notice.
iJay,
So when are YOU going to run for public office and be the instrument of change to right all the wrongs that you perceive are being solely the fault of those greedy blood-sucking public employees?
You seem to know how to cure everything...so put up, or shut up!
iJay: Well I hope if you run that you decide to make decisions based on facts versus what you spew out here. Your latest: "But you get that healthcare into retirement, who would not want to pay 8% after retiring? The money is not there for retiree medical, and it (unlike pensions) could be cut with little notice."
Most pensioners, either private or public, get some level of healthcare as a continued benefit. As to "who would not want to pay 8% after retiring?" I would think the answer is everyone would rather not pay......
You seem to forget that post retirement, post 65, Medicare kicks in so health insurance cost drops.
Plus even retired state workers post 2011 still contribute some amount. I think 5% to 20% sliding scale for four years for 50K salary.
As far as "cut without notice," can you say union contract?
At least get the facts before you voice these opinions.
iJay,
Should you ever decide to run for public office please let us know who you really are...so that we can be sure and vote for your opponent.
??? Mr. G. I know they get the benefit but TODAY few companies do. Going forward it cannot be on the backs on the NJ taxpayer. If they want to nationalize it then I am for it (like in Canada). A public worker retiring at 55 gets 10 years and it is worth about 25k per year so there is 1/4 million for the poor little ol' teacher. After 65 it is minimal but there is still a cost to it.
Who is Mr G? Who is John Gault?
Strangerdanger says:
My company has retiree health benefits.
So do my friends who work at private companies.
So do a lot a private workers in Canada.
It's still about 33% of all companies in the US offer retiree coverage.
Again, let teachers get paid what all of you get paid who aren't teachers, and they too can go have their own private pension, we don't need to compare apples to oranges anymore. Teachers have ways accepted low pay because the pension and benefits made up for that. Now they want to take away the pension and benefits, all that's left is a sucky paycheck.
I see a teacher shortage coming soon!
tripsy, So everyone who isn't a teacher makes more and has a pension? Really poor argument. Never mind apples to oranges, you're not even in an orchard.
Meister, actually not really apples to oranges when done on either a average basis or with attempts at equalizing skill sets. Difficulty is assessing the value of any worker for compensation against competitors, supply/demand, alternatives, and geography. Competitors would be private schools, etc.; alternatives would be other things folks could do with these skill sets. I mean why is anyone paid what they are paid?
Then on top of that add in the Union effect and the effect of long-term contracts and direct comparison gets very difficult. For example, during the Great Recession, private wage increases fell while private wage increases continued at the contractual level. Many saw this as teachers who received paltry raises during a good economy as getting something they didn't deserve. Timing.
On average, about 50% of US private employees get a retirement package; a third get 401k types, a tenth get pensions, and a quarter get both. As you increase the education level, the numbers go up. The problem is to "rationalize" what teachers should be paid versus a comparative skill set, and what a comparative skill set is.
The attached report kicks off by showing how difficult it is to "rationalize" pay in New England given the state-by-state differences, changes due to The Great Recession (pay increases down for private, up for public), and educational effects (private better than public).
It concludes: "Although research appears to be divided on a few noteworthy issues – appropriate compensation comparisons between sectors, educational variables, and total compensation packages – there are some areas of research that seem to have common ground. Most of the scholars studied for this literature review agree that benefits constitute the majority of compensation packages for public workers, that unions influence the process of determining compensation, and that the private sector tends to be more successful with regard to attracting and retaining younger talent."
So tripsy is right, if you take away the benefits, you would end up with a "sucky" paycheck. However to be equal with the private sector, the benefits would be reduced and the salaries increased, on average.
http://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=17&ved=0CEcQFjAGOApqFQoTCMKFgOyzv8cCFceigAodxloAyw&url= http%3A%2F%2Fwww.ripec.org%2Fpdfs%2F2011-Public-Private-Compensation.pdf&ei=TdfZVYKrFcfFggTGtYHYDA&usg=AFQjCNECKVnlS2TsZsEsZpnYeVHkT8wn4A
Mr G, I was merely pointing out that not everyone makes more than teachers, which is what tripsy thinks based upon their last post. That is all.
The "key" SD is that the salary increase will not be equivalent to the benefits decrease. THIS IS THE WHOLE POINT, and most know this. I would not be fighting for a zero sum gain, and the public workers would not be defending it so much if it were to be a zero sum gain...
The market should bounce back within a couple months, but if it doesn't do some of you want the taxpayer to reimburse the pension funds underlying losses???
This is the perfect example of why it is wrong to hold the taxpayer responsible for underlying pension fund "underperforming"...
I don't want the taxpayers (which, as iJay conveniently keeps forgetting, include public employees as well) to be held responsible for underperforming...just as I really don't give a crap if iJay's 401k tanks.
What i want is a governor who signs a contract and then adheres to what he signed.
What I want is people to stop vilifying public employees and railing against them continuously as if they alone are the roots of all the financial problems that the state of NJ is in.
Now we have a law firm hired by the governor to produce a whitewash of a "report" that totally clears the governor of ANY knowledge in the GW Bridge fiasco...and now says in response to a subpoena that the law firm NEVER recorded depositions and NEVER had a legal stenographer present during depositions. I guess if I was going to make $7 million "clearing" the clown who hired me I wouldn't keep recordings that might contradict my whitewashing fiction either.
So iJay, how's it going with not paying YOUR fiscal obligations? Ignore any contractual agreements lately?
Ijay, of course it would not be a zero sum game and of course workers would be against it. Did you jump up and down when you lost your pension? Did you get a zero sum game? If you had a pension and now you don't, of course not.
But of course that has nothing to do with the point that teachers are paid less, but have better benefits, and that it is very difficult to arrive at an apples-to-apples wage/benefit equivalency within the private sector.
Nor does anything you have said have any bearing on whether we should honor the existing contract except that you don't want to.
As for pensions underperforming expectations and someone having to pony up the obligation, my pension is not locked until I retire. Thus underperformance is passed directly to me until I retire. I trust the pension managers are adjusting risk based on whether funds are supporting pre vs. post retirement. Not sure how NJ works.
It will take more than "trust" for your pension to last for your lifetime; it will take good luck.
Point is, the NJ Taxpayer should not be shafted. When a pension system is created that was underfunded from day 1 and has been corrupted with, for example, a lot of people added who just should not be, and the list goes on. Appreciation for the taxpayer is what I am arguing for...
Way back when...pre-Christie Whitman and her successors of BOTH parties...the public employee pension system WAS fully funded. Enough of this crap that it was underfunded from Day 1. As usual, iJay continues to spew incorrect "facts" to support his hatred of public employees.
Employees have always made their contributions, and had the state continued to do so, the pension would STILL be fully funded.
Wrong, at least with the teachers' pension system the actuaries advised 7% average annual returns but they went with 9%. This is going nowhere...
JerryG - yes, iJay is strident in his opinions, it's true, but you seem to be missing the main point.
the main point is we have more government than we can afford. so despite the contracts that are signed, (and should be honored) there is the increasing financial burden on the tax paying public to pay for more government than can be afforded. going forward there isn't enough money to cover the obligations. where will it come from? raising taxes yet again? how high will they go? what is your top end? 50%? 60%? 75%?
there *HAS* to be some changes
we need to seriously reduce the size and scope of the government (public sector), it was never supposed to grow this big.
BrotherDog Here is a good one to counter the poor little teacher:
http://www.rickackerman.com/2015/06/retired-at-52-a-teacher-faults-nj’s-generosity/
Regarding Pension investment return looks like 7.9% when it was recommended to be a maximum of 7%, can't locate documentation going back to the epoch of the pensions:
http://www.state.nj.us/treasury/pdf/FinalFebruaryCommissionReport.pdf
What happened iJay...did some teacher way back when make you stay after school? Sit in the corner wearing a dunce cap? Clap the erasers? Make you write "I shall not be mean to teacher" one hundred times on the blackboard?
Why such hatred of teachers?
None of the above, but I did see the burnout cases. Teachers are the largest group of NJ public workers so (naturally) they will take a front position in my criticism of their excessive total compensation; simple as that. The NJ taxpayer should not be paying for excesses no matter where they may exist.
For clarification, I do not hate teachers but I do strongly dislike the NJEA. And, if a teacher is glaringly fighting my point of view that they are excessively compensated, then on an individual basis I dislike them.
Any more questions?
I didn't see any 7/7.9 in there..... The numbers i know are different and posted above. Pension has pretty consistently beaten their targets making the managers look great and you look as been schooled.....
So iJay...you dislike anyone who disagrees with your point of view? Talk about a total disrespect of anyone who thinks differently than you do.
Tell me, in your little world, are people even allowed to disagree with you? Are you this closed-minded at home with your family? If you have visitors and they express a different opinion from yours do you make them leave?
SMH...
Mr. G Page 12. Apparently although you can Google but you don't know how to search a PDF document. Today is your lucky day to learn something new, please report back.
JerryG, most of my friends have the same views. Close-minded??? The facts are the facts, and whiners always saying leave me alone are just that... Visitors... these topics are not brought up unless I see that they see things my way...
iJay,
"...Visitors... these topics are not brought up unless I see that they see things my way..."
Not a big one for intelligent discussion of opposing views and friendly discourse, are you?
Sure iJay...just bring it up online where you can hide behind electronic anonymity...and demean your friends and family for their opposing viewpoints and make fun of their beliefs without them knowing how closed-minded you are.
Reporting back.... I be schooled too.
Sorry, I read the section on Pensions only and did not search the entire 52-page document. Just figured you would. Here's what I posted earlier.
"Nor do I expect the pension fund managers to beat the S&P500 without incurring too much risk. Yet I think they did since the bottom line tells another story. NJ Pension fiscal is like July so year 2014 ends July 2015. I think in 2012 it returned 14%, 2013 - 16.9% and for this year, 2014, 7.3% Projection metrics are for 7.9% so 2014 ending 7/15 fell a bit short. Five year average ending 2014 is 12.4%.
S&P average 2005 - 2014 = 9%, 1928 -2014 = 12%"
So yeah, I didn't agree with your 9% that you first posted, 7.9% is the current target number from the NJ Treasurer. I take it the 9% was your typo of 7.9%, right? Whoever these actuaries are, and the info being supplied by Christie's handpicked commission, they do not own the number, the Treasurer does. I will note that many states target 8% or higher and there is always disagreement to any number selected. That's a major reason private companies jump to 401ks to avoid being responsible for this number and pass it to the employee instead. Called the KMAYOYO employee care package invented a beneficent caring company with incredible financial acumen for financial management and a willingness to share what it knows with its valued workers or........Kiss My Apple, You're On Your Own.
But it is the way of the world to escape responsibility and reduce risk whenever you can.
In NJ's case, pension plan managers have consistently beaten the 7.9% target number, on average, for over 5 years rendering the commissions statement moot and your mis-statement less than that.
On top of that Christie has gone out of his way to worsen the problem at the cost of NJ tax payers in order to manufacture additional political fodder to get his way. Over time he has stolen over $14B from the fund; the next closet Governor is Corzine at $6.4.
Last year Christie mismanaged fund investments and worse yet did not correct when his strategy went south, His plan ended up with less return and higher management fees; the double whammy of fiscal injustice. Christie just handed NJ tax dollars to Wall Street without gains. It's the only year the fund fell slightly short of target, thank you Chris. This year he took big time credit for big time funding of the pension; then he took the money back and took credit for that. http://www.ibtimes.com/gov-christie-shifted-pension-cash-wall-street-costing-new-jersey-taxpayers-38-billion-1667622
So please, don't tell me about 7.9% targets, actuaries saying different and Christie's hand-picked financial mavens saying anything. Use a Christie-sized grain of salt there, please.
Now, all of that said, I still believe that NJ should make teacher pay packages, and public worker packages, commensurate with the private sector. It's time. In other words, cap the pension, shift employees to the 401K and balance the pay/benefits with the private sector. Still does not leave you off the hook for existing contracts plus I am not 100% sure just how juicy the teacher's pension is versus a private sector 401k alternative. You might not like a fund you can't steal from upon occasion... But like the private sector, who needs the pension management risk going forward especially if financial boneheads like Christie are at the tiller.
So what about health?
The anti-Union sentiment in this country has been the biggest brainwashing coup in labor history. I am always astonished to see people, especially those who would benefit the most, take a stand against collective bargaining. The ignoramus machine (GOP and Fox) churning out its best lies to their intended audience: the least educated, most biased and gullible populations in America.
Vous,
I will never forget it. About 20+ years ago there was a newspaper strike. I guess the newspapers got temporary drivers during the strike to deliver the newspaper and I saw a replacement guy trying to deliver papers and someone pulled him out of the truck and beat the crp out of him. Certainly it was either a union member or someone related to the union.
Since then I view unions more as racketeering than innocent collective bargaining.
TM
Luigi Antonini
Harry Van Arsdale, Jr.
Leon E. Bates
Cesar Chavez
Patrick Crowley
Samuel Gompers
Joe Hill
Sidney Hillman
James Hoffa
Mary Harris "Mother" Jones
Norma Rae
A. Phillip Randolph
Walter P. Reuther
Fannie Sellins
R.J. Thomas
Leonard Woodcock
Billy Preston
Jackie Robinson
Fred Sanford
Millie Vanillie
Bernie Williams
(see, I can do it too!)
I assume there was a point to that post vous? A list of bought-and-paid-for union folks????
I am very impressed that you came to the rescue of the driver being attacked and helping to I.D. the attackers to the police. You didn't hide and cower did you?
Alexander Hamilton
Napoleon Bonaparte
Otto von Bismarck
The greatest historical figures (according to a history teacher I once had).
jd2 "I will never forget it. About 20+ years ago there was a newspaper strike. I guess the newspapers got temporary drivers during the strike to deliver the newspaper and I saw a replacement guy trying to deliver papers and someone pulled him out of the truck and beat the crp out of him."
I remember the 1911 Italian Hall disaster when striking Union members gathered in a hall had 73 of them and their children crushed to death after someone yelled "fire." Eight witnesses claimed someone wearing an anti-union trade alliance button as the sinner.
I remember when union organizer Frank Little was found hanging from a train trestle. Three years later, in 1920, company guards opened fire on strikers hitting 16, killing one: no charges filed. All the union members were shot in the back.
In 1897 union members were again shot in the back in Hazelton PA killing 16 for carrying a American Flag and asserting their right to march.
Or in 1927 when Colorado Columbine Mine Guards and Police opened fire on miners and their wives killing six and wounding dozens.
There's hundreds of these stories, hundreds dead, and you want to tell me about a scab getting beaten? Yes it's terrible, worse yet for you to see it, but Union men demanding fair treatment have been massacred for a century or more.
Billy Preston
Jackie Robinson
Fred Sanford
Millie Vanillie
Bernie Williams
Every one a dues paying,card carrying Union member. See what I did there?
Vous,
A. No one came to the driver's rescue. It was very chaotic in the streets at that time.
B. I was on a pedestrian bridge looking over the incident. I guess you can compare it to the bridge in Denville over 46 by the Burger King if you know what I mean. If you saw 20 seconds of a guy being beaten up while in the middle of that bridge, what would you be able to do?
C. Why is my reaction under your scrutiny? To put it politely, who the f are you to judge me for anything?
D. Are you therefore admitting that this is legitimate union practice?
TM
Yep, the system is great
http://www.nj.com/essex/index.ssf/2015/09/double-dipping_still_rampant_in_essex_county_repor.html#incart_river
Essex county? Coincidental to the heroin heat map in the other thread? Forgo community assistance in lieu of fattening your bank account?
Yup, sounds about right given the prevailing attitude about governments these days that they are to be pillaged for personal gain. Gotta get mine from the bottomless barrel (there is no such thing) that's continually refilled by the threat of force. Yes, definitely sounds about right...
iJay, do you mean the 401k that is invested in the heavily manipulated stock market? Manipulated by whom you ask? Well, the Federal Reserve of course! Gotta keep that debt-funded charade going as long as possible too!
lol, that's enough negativity for now...
Nobody else came to his aid. Sad you couldn't find the courage to on your own.Now I see clearly what you are.
Oh, those dastardly evil blood sucking union members...maybe Governor Christie can come up with a plan to track them via FedEx, too?
Yes Ijay, Unions do exist. And the have done some wrong things in the name of the Union.
So have corporations in the name of the corporation. Probably more often.
So have non-Union people and non-corporate people in the name of all sorts of things.
Is there a point here?
Evil people exist EVERYWHERE..but the good people (union, non-union, EVERYONE) exist everywhere and far outweigh the evil ones.
Why such hatred and contempt, iJay?
Hi 5catmom, glad to see you're letting some blood circulate to your hands this morning.
And yes, it may be time to close this thread since it's turning into a continual rehash of the same old, same old.
the problem is we have more government than can be supported
it's just too big, it's overwhelming
The bloated government does not want to cut its own fat.
Political corruption is the cause. The cause for most of our trouble in this great nation today...
It's so easy to fall into the same old simple mantra of too much government, too big, it's the reason for all our evils...... Cut, cut, cut, is such a simple solution to all of our problems. Or is it?
Fact is in terms of employees, the Federal Government today is smaller than the one in 1960, 1970, 80, 90, and a few thousand larger than 2000. It's 20% smaller in employees than in 1990 and 33% smaller than in 1970. That's over 2,000,000 employees off the government paycheck rolls.
https://www.opm.gov/policy-data-oversight/data-analysis-documentation/federal-employment-reports/historical-tables/total-government-employment-since-1962/
But yes, in 2008 and 2009, it did briefly add employees which IMHO is the correct action during The Great Recession. Better than unemployment and needed to process all those unemployed. And man did the anti Big Government loud mouths have a field day then.
In terms of spending, it's a yes and no as to government growth. Yes, we have been shrinking lately since The Great Recession no matter what metric you use.
Yes, in terms of government spending on goods and services we are smaller than the "average data all the way back to 1947." With one notable exception; we were much smaller during the Clinton years. It was a more liberal time even if some operations were handled under the desk :>)
But no, government is larger than at the turn of the century if you add in interest and transfer payments like "Social Security, Medicare, Medicaid, food stamps, unemployment insurance, and housing vouchers." It has been shrinking since The Great Recession, but has grown since 1900 due to the addition of these programs and our paying of interest mostly to ourselves, but paying none the less.
Interesting read: http://www.forbes.com/sites/beltway/2012/07/31/has-the-u-s-government-gotten-bigger-or-smaller-yes/
Too much government to be supported? Cleary no. Bloated? Perhaps. Not on the total spending and not on the people. Too much interest, IMHO - yes. Too many social programs? Probably some yes, mostly no. Political corruption is the cause? Perhaps a cause of some problems, but clearly not THE cause of all problems.
Fact is if you believe government is too big, then you believe it is too big at this smaller size or any size for that matter. Perhaps that is true. Yet government spending as a percent of GDP is down, but total spending by the same GDP metric is up due to interest and transfer payments to social programs. Social Security and Medicare are the 800 pound gorillas in this and I, for one, would never take SS out of the mix especially since it cares for the elderly and funds the major portion of our debt. Medicare is a different beast where we fund that from our General Fund of tax dollars; it's a sinkhole There is probably a better way to do the accounting on that one.
But to me a simple "government is bloated" matra belies the complexity that is how our government works in our economy. Sure, fix the waste and much, much, more, but the simple "it's too big" is just not technically correct.
we have more government than we can afford. it's clear, and this large overbearing size of the public sector with it's loaded salaries and benefits is unsustainable at current levels. the united states cannot afford it anymore.
it needs to be reduced, most tax payers get this, it's the progressives and the public class (all of them 'statists') that don't want to get it. they benefit too much from high taxes and from big government. so they are in bed with the idea of larger is better, higher taxes are aok.
NJ is a lost cause due to high taxes and 'ig government, it's hopelessly broken and can;t be fixed anymore. oh yeah, just raise the gas tax, that'll fix everything
how high will Njerseans go in accepting tax rates?? 50%? 60%?? why not cap it at 75%???? surely, government will be able to fix everything with a 75% tax rate, right?
right??
the size and expense of the public class is holding all of us back, it prevents real progress
bd over and out
for your Edification: https://www.facebook.com/ajplusenglish/videos/vb.407570359384477/612554595552718/?type=2&theater
The government may not be bigger in terms of the amount of people working for it but it is very inefficient with plenty of workers not being held accountable for doing their jobs. My son has plenty of horror stories in dealing with the VA and Military Records office. They are not afraid of losing their jobs because it rarely happens in the Public Sector.
kb2755 Ok Mr. G, then corruption is the cause for all these problems and/or blocking the solutions...
A couple of things HH/MG/SD:
One of the click through links takes you here:
http://www.taxpolicycenter.org/UploadedPDF/412528-How-Big-Is-The-Federal-Government.pdf
This is an article co-authored by the same person writing the wishy/washy Forbes article (maybe yes, maybe no?) referenced. It's in the click-through link where he concludes that if certain tax credits were counted as expenditures the US budget would be about 4% higher than reported, and even alludes that it's likely higher if it were possible to calculate all of the sources of tax credits that, if made part of policy, would be considered outlays.
Second, let's consider a more obvious fact here. There are a great many things that the populous/corporations/government officials asks for yet cannot get, like laundry list length, right? Eradicating hunger, giving everyone a living wage, etc. But even with our fiat dollar there are limits on what can be done. Agree?
If that's true, and the size of our government really has not grown as you are arguing, then is it possible to conclude that the government cannot grow larger without causing undo harm to the nation? I mean, what has kept the number in the same general area you're excited about? And if you agree there, how much farther a leap is it to conclude that the reason for the limit is because, as a country, we have been taxed at a *maximum* for quite some time now and any additional taxation would simply bear additional burden? And if you can get that far, how in the world can you argue to move further, to spend even more, when there is some obvious historical barrier preventing government spending from exceeding the area of 20% GDP?
Now this is where my thoughts come in, which I know you love to hear ;-) If our legislators feel that they cannot tax the populous more than this 20% limit without causing undue harm, pray tell how could they, in fact, do *more* without passing undue (short term) harm to the populous in the way of taxation? Borrow, perhaps? Create more fiat money from nowhere to fill the void? Hmm, sounds very familiar here, doesn't it lol.
Oh, and btw, while you are jumping up and down grinning about your favorite Clinton doing so well during his term, can you at least acknowledge that the "savings" that shows up in the numbers is offset by the huge bubble that burst shortly thereafter? -5 + 5 = 0, is a zero sum game, right? Clinton was the -5 to the bubble's +5, that's all. He was quite lucky to be President at that time...
OK, let me clarify: in terms of employees, government is not bigger than it was in 1960 and beyond, it's smaller. Would love to thank the bureaucrats, but probably can thank the computer age. In terms of spending, against GDP it's smaller. In terms of total expenditures, it's larger due to interest and the advent of social programs like Social Security, etc.
If you believe that it is still too big, that's your opinion and a darned fine one. Inefficient: got to be inefficient somewhere but other places like Social Security and Medicaid, it's efficiency rating might look pretty darned good. Problems like in the VA, most certainly. Everyone has problems. IMHO, It's just not black and white inefficient, corrupt, wasteful, etc. etc. etc. But I like 'its too big," just tell me where to cut it without saying make it all smaller.
And it's just wrong and downright rude to say "it's the progressives and the public class (all of them 'statists') that don't want to get it. they benefit too much from high taxes and from big government. so they are in bed with the idea of larger is better, higher taxes are aok." I am a progressive or liberal and I do "get it." I don't benefit from high taxes or big government and most certainly can not be branded statist. You're just pure dumb wrong to generalize and brand people your silly names.
JIT: SD will answer, not sure about those other folk: Funny that you choose to go even farther out on the limb for a wishy washy guy but hey, so government is 4% larger in this view following the same general trend. That's another view; I 'm still digesting the wishy washy one.
Yes, I agree to limitations in government spending as well as world-wide resources in general while not ceding the possibility to eradicate hunger, giving anyone a living wage, etc. etc. etc. all of which has absolutely nothing to do with a fiat dollar. But no, I did not argue that government is not growing; I said employee size is smaller, spending ratio against gdp is smaller, but this same ratio is larger when you add in transfer payments and social programs as noted above. And you are arguing for 4% above that given other taxation nuances.
Even if what you said I said was true, which it is not, your conclusion "then is it possible to conclude that the government cannot grow larger without causing undo harm to the nation." is false. Government can grow larger without causing undo harm to the nation. No one knows where the tipping point lies.
I am not excited about the level of spend against gdp, even less so about the other derivations. Excited and economics are strange bedfellows though.
"we have been taxed at a *maximum* for quite some time now and any additional taxation would simply bear additional burden?" Think you are wrong on the facts here. Tax rate has fallen and remains at its lowest level in decades. You should know this. A few decades back, we were taxed at a far greater rate and yet, we survived, some might even say thrived.
"cannot tax the populous more than this 20% limit without causing undue harm" if I take this statement out of context and forget all the other whacky unsubstantiated stuff you spouted, I would agree, but for other reasons. The undue harm is the harm to the politicians raising taxes, these spineless worms. And therefore we do have to borrow more if indeed we need to do anything above the revenues coming in. I would say The Great Recession recovery was something worth borrowing on. Perhaps we might have implemented it differently, but I think any prudent person in 2008 would say, "I think it's a good time to take out a second mortgage out on America and start to rebuild our severely damaged economic home." That said, of course you know I feel it is well past time to stop borrowing and expedite paying the loan down, including raising taxes on the rich to do it and removing the myriad of loop holes put in the tax code since 1986 by both parties.
Yeah, Clinton all luck, Bush too. In your dreams my friend. Of course after every boom there's a bust and vice-versa. Like any surfer, it ain't the size of the wave, it's how you ride it that counts. Fact is, Clinton chose wisely, Bush not so much so, Obama --- easily better than Bush, not as good as Clinton. Unemployment 5.1%, NJ 5.9% and better yet, NJ finally moving to the middle of the pack. So yeah, I'm grinning about the Clintonian economy. You got that right.
"Has The U.S. Government Gotten Bigger Or Smaller? Yes."
That's not wishy/washy to you? Not a yes or no? OK, well that's all I meant by the comment.
Regarding the rest, no surprises in your post. Just know that there are other ways to look at things, and often times there is validity in multiple viewpoints. But you have to want to see them, and the last part of your post reminds me that quite often with you that's not the case. You tend to write that a single, solitary individual should take credit or blame for economic conditions (your fascination with Clinton and Bush come to mind), but the reality is far different. Why not look to Greenspan, a "lifelong libertarian Republican", for instance, who had a MUCH greater influence in the economy than any President over the course of almost two decades? His (low interest rate) policies have a direct correlation to the exaggerated boom of the 90's, as well as the bust that followed, much more so than anything Clinton or Bush did (economically). But I know, you'll stick with the Clinton narrative no matter what.
Good one JIT.
I think the author defended the yes and no accurately. It's just that the technical definition yields a different answer than his expanded definition which I think he defended well. But it is not the technical answer which would be NO.
I listened to your viewpoint, pointing out where I agreed and, IMHO, pointed out some factual inaccuracies within your assumptions not that it has to change your opinion.
As far as single solitary blah de blah, I find it funny to see you tooting the horn of the Federal Reserve Chair. I have no problem appreciating Greenspan's efforts as well as Clinton's and applaud Clinton for re-appointing Greenspan as head of the fed. But as to where the buck stops, I think it's clear the Clinton's economic policies, including re-appointed Greenspan, helped fuel the best economy America has seen in a long, long, time and one that has not be matched since.
The best economy you refer to was due to excessive debt issuance, not anything of substance. Hell, I could live extravagantly too for a while and call that the best time of my life. But, unlike you, i recognize the end game there. Heck, we've talked about it for years now and you're still no closer to understanding it even though the history is staring you in the face.
Whatever, I just posted as a reminder that we shouldn't believe everything we hear and that there is ALWAYS more to every story.
You got facts ro go with that swagger?
'But unlike you, Ii recpgnize the end game there........"
Do you realzre how rude you come off. Yet you realize all this, know how to live extravagantly, but even recognizing tne end is near, choose not to even as history looks you right in thr face. But unlike you......
Looking forward to that massive debt inssuance chart.
we have more government than we can afford!! we need to reduce the size/scope and cost of our public sector:
$2,883,250,000,000: Federal Taxes Set Record Through August; $19,346 Per Worker; Feds Still Run $530B Deficit
The federal government raked in a record of approximately $2,883,250,000,000 in tax revenues through the first eleven months of fiscal 2015 (Oct. 1, 2014 through the end of August), according to the Monthly Treasury Statement released Friday.
That equaled approximately $19,346 for every person in the country who had either a full-time or part-time job in August.
It is also up about $198,425,330,000 in constant 2015 dollars from the $2,684,824,670,000 in revenue (in inflation-adjusted 2015 dollars) that the Treasury raked in during the first eleven months of fiscal 2014.
http://www.cnsnews.com/news/article/terence-p-jeffrey/2883250000000-federal-taxes-set-record-through-august-19346-worker
Hmmm. And this from the "liberal left controlled media bias" crowd.
OK, first the deficit is a bad thing, especially given the debt. At the same time this year's deficit is the smallest we've had in seven years. Thanks to Donald Trump's predecessor we hit a $1.4T deficit in 2009 up from $161B in 2007 and falling to $485B last year. Right direction, not fast enough, need more please. This year deficit estimates are $426B mainly due to individual and corporate tax revenues increases, not spending cuts.
So these rocket scientists conclude "In 2012, President Barack Obama struck a deal with Republicans in Congress to enact legislation that increased taxes. That included increasing the top income tax rate from 35 percent to 39.6 percent, increasing the top tax rate on dividends and capital gains from 15 percent to 20 percent, and phasing out personal exemptions and deductions starting at an annual income level of $250,000."
Of course they leave out that tax rates for anyone under $200,000 (joint) where tax rates have not changed since the Bush plunge of 2003. Instead they focus on the dreaded Obama tax increase of 2013 that opened up a new tax bracket at $400,000 and whacked them with a 39.6% tax. Cry me a river BDog, cry me a river. The rich still pay less than they have in decades.
Average individual income tax rates are the lowest they have been in over 40 years. Same with payroll taxes. Corporate taxes too, but inching up at a snails pace.
And "The largest share of this year’s record-setting October-through-August tax haul came from the individual income tax."
Put two and two together. Revenues higher, rates lower, hmmmmm. Could it be more people working or people making more money or both? Nah, the rocket scientists talk about the tax increase on $400K and above........
Well, again at a snail's pace and off our all time high by far, but median income is creeping up. People are making more money. http://www.advisorperspectives.com/dshort/updates/Median-Household-Income-Update.php
And we all know more people are working, even in NJ which, thank you Chris Christie, severely lagged the nation. Took us to 2014 to start falling off our 9% precipice and only to mid 2015 to move from being a leader in the top five states in unemployment to only .4% behind the national average. Stay away Chris, stay away.
As to the rest of the tax hikes mentioned, yes there are increases, again only for top brackets, in dividends, interest, and capital gains. Still crying for them BDog? And a number insidious loophole cuts by ObamaCare which turn into tax increases. A number of these hit me personally and while wincing I smirk and say "give one for the gipper" of closing loopholes. Wish that fiscally responsible Republican Congress would close them for the rich too.
But cut me a break if more people working making more money paying lower tax rates resulting in a smaller deficit is a bad or wrong thing. We should be thanking Obama and saying "good job, but we need more please." And we should be telling Congress to get off their fiscal behinds and get to work.
Federal Taxes Set Record Through August $19,346 Per Worker
Feds Still Run $530B Deficit
we have too much government that costs too much money to run, the public sector needs to be reduced in size, scope, and overall cost.
working Americans can't afford this much government.
Actually current deficit estimate is $426B but what's 100B between friends.
Since last year's was 485 and it has been decreasing for 7 years, I think over an estimate over $500B is a push since there's less than 30 days left in the fiscal year.
The real record you should be talking about is lower unemployment and slightly higher wages.
Again, yes the deficit is bad, the recovery is slow, but at least it's moving in the right direction.
I have no issue with singing the big government song, although that's not true either. At least get the underlying facts right and avoid the erroneous sound byte conclusions that avoid the full picture of what's happening.
When we waste money like 237.7 Billion dollars to a foreign country of course we are not running our finances correctly:
http://www.haaretz.com/business/u-s-aid-to-israel-totals-233-7b-over-six-decades.premium-1.510592
the original estimate for the 2015 annual federal budget deficit was $583 billion,
that’s since been revised downward to $455 billion and then revised to $426 billion, which is a very good thing,
but there is still a deficit of 426 billion dollars; and the federal debt held by the public totals $107,000 per household
we have more government than we can afford,
The article was written on 9.14.2015. It has many numerical facts. This fact they got wrong was their HEADLINE and pretty darn basic. The updates plastered all over the government and financial pages.
It they got that one wrong, not once but twice, I wonder what else they have wrong?
How about where our State stands
https://watchdog.org/wp-content/blogs.dir/1/files/2015/09/TIA-September-2015-FSOS-Summary.pdf
with record tax revenues coming in the budget still has a projected 426 billion dollar deficit.
that's really bad,
we are spending more than we are paying in tax revenues even though those revenues are at record setting levels.
that's really bad,
we have more government than we can afford.
Seems like common sense to have a budget unless we are at war -- but wait we are in a perpetual war...
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