The Youth Unemployment Bomb

[The Kernel]

You didn't explain shit. You assume that this fund wont grow in the next 10 years. You also assume that reforms and caps can't be used to reduce payments. This hardly requires the destruction of unions like you hysterically claim.

You also assume that the full amount before its $70 billion drop was actually required to cover payouts. Do you have evidence of this?

I looked up the $70 Billion dollar figure you keep bringing up. CalPERS reached a peek of $251.1 Billion of assets in 2007. It fell to a low of $178.9 Billion in 2009. No doubt, you got your figure of approximately $70 billion from there. You dishonestly fail to mention the fund grew to $201.6 billion in mid 2010 and is now currently $230.9 Billion (17/02/11).

A shortfall of $20.2 billion to be made up over 10 years. A annual growth rate of a mere 0.8% is required for the pension fund to make it up in 10 years. Most of these funds should be able to manage at least 2-3%. So the chance the taxpayer will have to make up the cost is next to minimal.

All you have shown in this thread is that you are a dishonest hysterical douche.

You are assuming it would be sufficient for CalPERS to return to 2007 levels in 2020. Do I really need to explain why this is stupid? They based the fund on certain growth projections and if they aren't met all that happens is that the shortfall will INCREASE not decrease.

Want to see how bad? Let's assume they were expecting 4% levels of growth (which is lowballing it considering CalPER's history) over the 13 year period between 2007 and 2020. That means that they expected $418 BILLION to be in the account in 2020. Returning the fund to 2007 levels would mean a $168 billion shortfall.

That's the problem with these sorts of risk with defined benefits plans, the shortfalls just get bigger and bigger with every passing year. Worse still, the fund will actually decrease at an accelerated rate because it has to keep paying fixed benefits even if it can't afford them.

[The Kernel]

And CalPERS is sitting in 63% equities and 10% real estate. Are you retarded enough to believe that their fund will somehow retain its value when the market takes its next leg down? $70 billion is an optimistic loss amount given that the stock markets have never been more overvalued and leveraged than they are today.

63% in equities?!?!? Are they INSANE?

I guess it's not surprising. They must have had to take on that kind of risk just to keep it afloat but Christ if this isn't going to bite them in the ass hard.

[bobalot]

And CalPERS is sitting in 63% equities and 10% real estate. Are you retarded enough to believe that their fund will somehow retain its value when the market takes its next leg down? $70 billion is an optimistic loss amount given that the stock markets have never been more overvalued and leveraged than they are today.

More useless hypotheticals coming from you. Why am I not surprised. At least try not to used the "$70 BILLION LOLZ UNION" argument anymore, since it's a demonstrable falsehood.

You didn't explain shit. You assume that this fund wont grow in the next 10 years. You also assume that reforms and caps can't be used to reduce payments. This hardly requires the destruction of unions like you hysterically claim.

You also assume that the full amount before its $70 billion drop was actually required to cover payouts. Do you have evidence of this?

I looked up the $70 Billion dollar figure you keep bringing up. CalPERS reached a peek of $251.1 Billion of assets in 2007. It fell to a low of $178.9 Billion in 2009. No doubt, you got your figure of approximately $70 billion from there. You dishonestly fail to mention the fund grew to $201.6 billion in mid 2010 and is now currently $230.9 Billion (17/02/11).

A shortfall of $20.2 billion to be made up over 10 years. A annual growth rate of a mere 0.8% is required for the pension fund to make it up in 10 years. Most of these funds should be able to manage at least 2-3%. So the chance the taxpayer will have to make up the cost is next to minimal.

All you have shown in this thread is that you are a dishonest hysterical douche.

You are assuming it would be sufficient for CalPERS to return to 2007 levels in 2020. Do I really need to explain why this is stupid? They based the fund on certain growth projections and if they aren't met all that happens is that the shortfall will INCREASE not decrease.

Want to see how bad? Let's assume they were expecting 4% levels of growth (which is lowballing it considering CalPER's history) over the 13 year period between 2007 and 2020. That means that they expected $418 BILLION to be in the account in 2020. Returning the fund to 2007 levels would mean a $168 billion shortfall.

That's the problem with these sorts of risk with defined benefits plans, the shortfalls just get bigger and bigger with every passing year. Worse still, the fund will actually decrease at an accelerated rate because it has to keep paying fixed benefits even if it can't afford them.

1. Try reading, I said if it had a anemic 0.8% growth. In probability, it will have higher rates of growth. So in 2020, it will be ABOVE the 2007 level of assets.
2. No one has shown that $418 Billion are required in assets are required to meet pension payments in 2020. Their asset level in 2007 could have been above what was required to meet pension costs in 2007. Please provide evidence.
3. Modest cuts in payments and reforms could lower the burden even more.
4. Aerius tenuously uses this as an excuse to destroy unions, there is no justification here.

[aerius]

You are assuming it would be sufficient for CalPERS to return to 2007 levels in 2020. Do I really need to explain why this is stupid? They based the fund on certain growth projections and if they aren't met all that happens is that the shortfall will INCREASE not decrease.

Want to see how bad? Let's assume they were expecting 4% levels of growth (which is lowballing it considering CalPER's history) over the 13 year period between 2007 and 2020. That means that they expected $418 BILLION to be in the account in 2020. Returning the fund to 2007 levels would mean a $168 billion shortfall.

It's actually a lot worse, they assume a growth rate of 7.75% (Economist linky) because well, that's what it was for the past 20 years prior to the markets imploding in 2008. How bad is the math? Well, this blogger ran the numbers and it was only 58% funded as of 2009 and going by the latest numbers it would be in the 65-70% range right now, which by the way doesn't meet the actuaries' definition of fully funded which is set at 80% or more. Since 8% returns isn't going to happen, well, let's just say they're fucked and they're going to have a nice $350-400 billion hole. Gotta love that exponential function.

[bobalot]

I can see why it seems that Bakustra couldn't be bothered to continue replying to you. You continue your first dishonest $70 BILLION LOLZ bullshit with even more dishonest bullshit.

and it was only 58% funded as of 2009 and going by the latest numbers it would be in the 65-70% range right now, which by the way doesn't meet the actuaries' definition of fully funded which is set at 80% or more.

It was 60.8% in 2009 on a Market Value of Assets Basis and 83.3 percent funded on an Actuarial Value of Assets (Source). So it does actually meet the "actuaries' definition of fully funded which is set at 80% or more". You dishonestly mixed those two terms up.

However since I'm not a dishonest asshole (like you), I will point out that the market value is a better measure of benefit security. When the "Funded Ratio – Market Value of Assets Basis" was at 60.8% (that you keep referring to) the "Market Value of Assets" was $178.86 Billion (30/06/09). It is now currently $231.3 Billion. An increase of 29% over 20 months.

Assuming liabilities grew at 9% a year since 30/06/09, it would be about $341 Billion (Rounded up, noting that it was $294 Billion @ 30/06/09). The "Funded Ratio – Market Value of Assets Basis" would be 67% right now. The Actuarial Value of Assets would probably be higher.

All this shows is that the ratio reached a dangerous low during the aftermath of the Global Financial Crisis and is steadily increasing. Modest reforms and benefit cuts would make this ratio grow faster.

This hardly requires the destruction of unions as you hysterically claimed or massive costs to taxpayers.

Where you got the $350-$400 Billion "hole" from (which would equal the total sum of all liabilities) is anybodies guess.

[aerius]

It was 60.8% in 2009 on a Market Value of Assets Basis and 83.3 percent funded on an Actuarial Value of Assets (Source). So it does actually meet the "actuaries' definition of fully funded which is set at 80% or more". You dishonestly mixed those two terms up.

However since I'm not a dishonest asshole (like you), I will point out that the market value is a better measure of benefit security. When the "Funded Ratio – Market Value of Assets Basis" was at 60.8% (that you keep referring to) the "Market Value of Assets" was $178.86 Billion (30/06/09). It is now currently $231.3 Billion. An increase of 29% over 20 months.

When the CalPERS report itself states that the market value of the fund is the true measure of its ability to pay benefits, it means I'm using the correct definition.

Assuming liabilities grew at 9% a year since 30/06/09, it would be about $341 Billion (Rounded up, noting that it was $294 Billion @ 30/06/09). The "Funded Ratio – Market Value of Assets Basis" would be 67% right now. The Actuarial Value of Assets would probably be higher.

All this shows is that the ratio reached a dangerous low during the aftermath of the Global Financial Crisis and is steadily increasing. Modest reforms and benefit cuts would make this ratio grow faster.

Now carry the math to its logical conclusion. What happens when you carry that liability growth rate forward for the next 10 years? It means you'll have over $700 billion in pension liabilities. Which means you'll need at least $700 billion in assets to cover those liabilities. Now do you know where the math comes or do you need a remedial lesson in exponents?

The only way you don't get a massive hole is if you assume that stock markets will rise at 8% per year for the next decade, allowing CalPERS to grow its equity assets at the same rate. Either that or you gut the benefits. Your choice.

[bobalot]

It was 60.8% in 2009 on a Market Value of Assets Basis and 83.3 percent funded on an Actuarial Value of Assets (Source). So it does actually meet the "actuaries' definition of fully funded which is set at 80% or more". You dishonestly mixed those two terms up.

However since I'm not a dishonest asshole (like you), I will point out that the market value is a better measure of benefit security. When the "Funded Ratio – Market Value of Assets Basis" was at 60.8% (that you keep referring to) the "Market Value of Assets" was $178.86 Billion (30/06/09). It is now currently $231.3 Billion. An increase of 29% over 20 months.

When the CalPERS report itself states that the market value of the fund is the true measure of its ability to pay benefits, it means I'm using the correct definition.

No, you didn't, asshole. You do realise people can fucking read what you said just a few posts before? YOU said "which by the way doesn't meet the actuaries' definition of fully funded which is set at 80% or more".

"Actuarial Value of Assets" is a defined actuarial term.

Here's the first few lines of the definition (I suggest you can read the rest before making a further ass out of yourself):

Actuarial value is a mathematical calculation, often of the financial condition of a pension plan. It includes the computation of the present monetary value of benefits payable to present members, and the present monetary value of future employer and employee contributions, factoring in mortality among active and retired members and also to the rates of disability, retirement, withdrawal from service, salary and interest.

CalPERS does the right thing and relies on the "Market Value of Assets" (which is using a more conservative figure), and you just proved you don't know what the fuck you are talking about. Do us all a favor and shut the fuck up.

Assuming liabilities grew at 9% a year since 30/06/09, it would be about $341 Billion (Rounded up, noting that it was $294 Billion @ 30/06/09). The "Funded Ratio – Market Value of Assets Basis" would be 67% right now. The Actuarial Value of Assets would probably be higher.

All this shows is that the ratio reached a dangerous low during the aftermath of the Global Financial Crisis and is steadily increasing. Modest reforms and benefit cuts would make this ratio grow faster.

Now carry the math to its logical conclusion. What happens when you carry that liability growth rate forward for the next 10 years? It means you'll have over $700 billion in pension liabilities. Which means you'll need at least $700 billion in assets to cover those liabilities. Now do you know where the math comes or do you need a remedial lesson in exponents?

The only way you don't get a massive hole is if you assume that stock markets will rise at 8% per year for the next decade, allowing CalPERS to grow its equity assets at the same rate. Either that or you gut the benefits. Your choice.

Nice binary choice.

This assumes a few things.
- Liability growth is constant and high. I have repeatedly pointed out that benefits could be trimmed and reformed. Contributions from employees could be increased.
- The underlying level of assets doesn't rebound in value (doesn't have to do a full rebound) and come into that 80%-100% band after its crash in value during the GFC. Unfortunately (for you), this is what appears to be happening. 29% in 20 months is quite a rebound.

[J]

This assumes a few things.
- Liability growth is constant and high. I have repeatedly pointed out that benefits could be trimmed and reformed. Contributions from employees could be increased.
- The underlying level of assets doesn't rebound in value (doesn't have to do a full rebound) and come into that 80%-100% band after its crash in value during the GFC. Unfortunately (for you), this is what appears to be happening. 29% in 20 months is quite a rebound.

I hate to interrupt a good pissing match but you need to stop and think for a bit here.

1) What happens to liabilities when all the baby boomers retire over the next dozen years or so?

2) What happens to contributions given that replacements for those retirees earn significantly lower wages?

3) Also relating to contributions, what happens when the state of California is forced to lay off workers and cut salaries because of its budget problems?

4) Why are you assuming that assets, which are in equities & real estate will continue their stunning growth into the future? Because they had great growth in the largest stock market & housing runup in history, and this growth can be counted on far into the future?


For you to be correct, pension fund liabilities must level off soon, this is unlikely given baby boomer retirements. Overall pension contributions must rise, this is also unlikely due to 2) and 3). Pension fund assets must continue growing rapidly, this is also unlikely, if you need this explained to you I can do so though I hope it isn't necessary.


By the way, if CalPERS has $240 billion in assets split amongst 1.6 million workers, each worker then has $150,000 for his retirement. Assuming average life expectancies that's around 15 years of collecting pension cheques. I leave it as a trivial exercise to calculate the annual payout for each worker, the annual compound growth rate required to bring that number up to something acceptable, and the cuts which need to happen.

[bobalot]

1) What happens to liabilities when all the baby boomers retire over the next dozen years or so?

I will let CalPERS answer that for you.

CalPERS began putting away money for the baby boomers the day they first came to work for government. CalPERS plans are prefunded and contributions are received in every year that members accrue their benefits. The retirement of baby boomers has already been reflected in the rates using actuarial assumptions. The money needed to pay benefits for retirees is expected to be there when workers retire. CalPERS is expected to be able to keep up with baby boomers retirements and the expected increase in benefit payments.

2) What happens to contributions given that replacements for those retirees earn significantly lower wages?
3) Also relating to contributions, what happens when the state of California is forced to lay off workers and cut salaries because of its budget problems?

Cut cash and other benefits and reform payments to retirees. Increase employee contributions.

Please provide evidence that on average their wages will be significantly lower? As I understand it, most wages are simply being frozen.

4) Why are you assuming that assets, which are in equities & real estate will continue their stunning growth into the future? Because they had great growth in the largest stock market & housing runup in history, and this growth can be counted on far into the future?

Where did I state this? All I said the "Market Value of Assets" is rebounding. I have repeatedly advocated cutting back benefits and reforming the system (such as having a cap or increasing employee contributions).

For you to be correct, pension fund liabilities must level off soon, this is unlikely given baby boomer retirements.

See above for baby boomers.

Overall pension contributions must rise, this is also unlikely due to 2) and 3). Pension fund assets must continue growing rapidly, this is also unlikely, if you need this explained to you I can do so though I hope it isn't necessary.

See above.

By the way, if CalPERS has $240 billion in assets split amongst 1.6 million workers, each worker then has $150,000 for his retirement. Assuming average life expectancies that's around 15 years of collecting pension cheques. I leave it as a trivial exercise to calculate the annual payout for each worker, the annual compound growth rate required to bring that number up to something acceptable, and the cuts which need to happen.

What the fuck? CalPERS currently has $231.3 Billion in assets. The number of retirees was 491,619 at the end of 30/06/2009. You have divided the value of current assets by the total number of workers (retired and still working) that will retire ever.

All of this began with aerius's retarded tirade about how unions need to be destroyed and used the woes of a single pension fund to tenuously justify his claim. None of this actually ended up justifying anything. What a waste of fucking time. Bakustra was smart in leaving this trainwreck of a thread.

[J]

All of this began with aerius's retarded tirade about how unions need to be destroyed and used the woes of a single pension fund to tenuously justify his claim. None of this actually ended up justifying anything. What a waste of fucking time. Bakustra was smart in leaving this trainwreck of a thread.

http://www.cnbc.com/id/41129099/States_ ... _Shortfall

States Warned of $2 Trillion Pensions Shortfall
Published: Tuesday, 18 Jan 2011 | 4:51 AM ET
Text Size
By: Nicole Bullock, Financial Times


US public pensions face a shortfall of $2,500 billion that will force state and local governments to sell assets and make deep cuts to services, according to the former chairman of New Jersey’s pension fund.

The severe US economic recession has cast a spotlight on years of fiscal mismanagement, including chronic underfunding of retirement promises.

“States face cost pressure, most prominently from retirement benefits and Medicaid [the health programme for the poor],” Orin Kramer told the Financial Times.

“One consequence is that asset sales and privatisation will pick up. The very unfortunate consequence is that various safety nets for the most vulnerable citizens will be cut back.”

Mr Kramer, an influential figure in the Democratic party and still a member of the investment council that oversees the New Jersey pension fund, has been an outspoken critic of public pension accounting, which allows for the averaging of investment gains and losses over a number of years through a process called “smoothing”.

Using data from the states, the Pew Center on the States, a research group, has estimated a funding gap for pension, healthcare and other non-pension benefits, such as life assurance, of at least $1,000 billion as of the end of fiscal 2008.

Chris Christie, the Republican governor of New Jersey, said in his state of the state speech last week that, without reform, the unfunded liability of the state’s pension system would rise from $54 billion now to $183 billion within 30 years.

Mr Kramer’s estimates are based on the assets and liabilities of the top 25 public pension funds at the end of 2010. The gap has risen from an estimate of more than $2,000 billion at the end of 2009.

He also used a market rate analysis based on the accounting used by corporate pension funds rather than the 8 percent rate of return that most public funds use in calculations. Pension liabilities are not included in state and local government debt figures.

So no, it's not just California, it's everywhere. I'll get back to the rest after work.

[aerius]

The only way you don't get a massive hole is if you assume that stock markets will rise at 8% per year for the next decade, allowing CalPERS to grow its equity assets at the same rate. Either that or you gut the benefits. Your choice.

Nice binary choice.

This assumes a few things.
- Liability growth is constant and high. I have repeatedly pointed out that benefits could be trimmed and reformed. Contributions from employees could be increased.

Page 132 Exhibit H of the CalPERS report Payouts increase at an average of around 9.5% per year. So my math was actually optimistic since I used 8% per year for liabilities increases.

- The underlying level of assets doesn't rebound in value (doesn't have to do a full rebound) and come into that 80%-100% band after its crash in value during the GFC. Unfortunately (for you), this is what appears to be happening. 29% in 20 months is quite a rebound.

Page 112 of the Calpers report, under Economic assumptions.

The economic assumptions include an assumed inflation
assumption of 3.0 percent compounded annually. The
inflation assumption is a component of assumed investment
return, assumed wage growth, and assumed future
post-retirement cost-of-living increases.
Based upon the asset allocation of the Public
Employees’ Retirement Fund (PERF), the assumed
investment return (net of administrative and investment
expenses) is 7.75 percent per year, compounded annually.

The pension fund is already underfunded. It assumes 7.75% growth in its assets while its liabilities are growing at 9.5% per year. Add inflation into the mix and that's a 4.75% annual compounded increase in its funding gap, not counting the hole it's already dug for itself. Using your numbers of $341 billion in liabilities and $230 billion in assets that's a $110 billion gap as of right now. Going by CalPERS' economic assumptions that gap then opens up at 4.75% a year to $175 billion in 10 years. Those assumptions are ridiculously optimistic so even in a best case scenario they're fucked.

Do your fucking math. Don't quote me crap from the fund's PR material. Oh yeah, that's right I forgot, you and Bakustra are too goddamn stupid to do basic high school math.

[J]

Please provide evidence that on average their wages will be significantly lower? As I understand it, most wages are simply being frozen.

http://www.ncsl.org/?tabid=17244 That was FY2010, shortfalls for current and future budgets will be even larger with corresponding increases in layoffs and mandatory unpaid leave.

Where did I state this? All I said the "Market Value of Assets" is rebounding. I have repeatedly advocated cutting back benefits and reforming the system (such as having a cap or increasing employee contributions).

The numbers have already been worked out earlier on, contributions must rise to 1/4 to 1/3 of gross annual pay to fund pension obligations, assuming pension payouts are 3/4 of average salaries paid out for a duration of 15-20 years. Help yourself to an RRSP or 401k calculator if you don't believe me. To cover current shortfalls, contributions would need to be in excess of this level along with further cuts in benefits. The math doesn't lie.

For you to be correct, pension fund liabilities must level off soon, this is unlikely given baby boomer retirements.

See above for baby boomers.

Overall pension contributions must rise, this is also unlikely due to 2) and 3). Pension fund assets must continue growing rapidly, this is also unlikely, if you need this explained to you I can do so though I hope it isn't necessary.

See above.

Unfortunately the math doesn't add up, for you that is. With both payrolls and compensation being cut along with this being a continuing trend into the future, overall contributions will fall unless the pay-in rate is raised a fair bit. Liabilities have and continue to rise at a 9.5% annual rate, you've shown nothing to prove this will stop.

What the fuck? CalPERS currently has $231.3 Billion in assets. The number of retirees was 491,619 at the end of 30/06/2009. You have divided the value of current assets by the total number of workers (retired and still working) that will retire ever.

You do realize what you just did there, right? By assuming that all assets belong to current retirees, you've zeroed the fund for all current and future workers, you just stole all their pension contributions to date giving everything to the retirees. Would you like to see the math on what this does to contributions and payouts for all current and future workers as well as current retirees?

[Bakustra]

What the fuck? CalPERS currently has $231.3 Billion in assets. The number of retirees was 491,619 at the end of 30/06/2009. You have divided the value of current assets by the total number of workers (retired and still working) that will retire ever.

You do realize what you just did there, right? By assuming that all assets belong to current retirees, you've zeroed the fund for all current and future workers, you just stole all their pension contributions to date giving everything to the retirees. Would you like to see the math on what this does to contributions and payouts for all current and future workers as well as current retirees?

I left this thread because Aerius simply stopped responding and I felt that it was inappropriate to hound somebody over that. Now he's started lying again, this apparently being his second-most preferred vice, but we also have this abomination against modelling. You're taking the current assets and assuming that this is the total assets that for all retirees, then dividing by the current number of workers and retirees. If you were honest/smarter, you would realize that the total assets would be an integral of a function describing the behavior of the assets over the period of time you were considering, and then divide that by the total number of retirees, which is also describable as the integral of a function of the number of retirees (as retirees will die as well, this will not be a purely upward curve like your ilk use to decry Social Security).

This will then produce an average payout over the period described. You'd then have to divide the functions overall to produce a function that would give the payout at a particular point in time. You could then show that payouts will decrease steadily or hit zero at a particular point. You haven't done so, instead producing a sham of mathematics while insisting that everybody disagreeing is a mathematical ignoramus. I rather suspect that you can't.

Do your fucking math. Don't quote me crap from the fund's PR material. Oh yeah, that's right I forgot, you and Bakustra are too goddamn stupid to do basic high school math.

Aerius, as a married man, don't you think it's a little inappropriate to whisper sweet nothings such as this (and in the presence of your wife, too) in the vague direction of my ear?

I see that you're lying again. I never addressed any of the mathematical arguments before this post. I simply demanded that you back the puke you spewed up. You haven't. You couldn't be bothered to defend your assertions about Toronto (but no doubt you'll come out with it again whenever public unions come up), you didn't explain how you could extrapolate from one state to all 50, and you never made the connection between this and the necessity of the destruction of public-sector unions. Your beloved wife provided an article that suggests that there may be such liabilities nationwide, without going into any specific detail. But neither of you has provided a bridge to the conclusion "Public sector unions delenda est", even though you finally produced a sensationalistic article that suggests a shortfall that needs to be made up. Curiously enough, these shortfalls became exposed after a recession in which millions of people lost their jobs. I wonder if these projected gaps might, in part, be related to said loss of revenue from payroll taxes? In that case, surely increased employment would be better in making up these shortfalls than "crush da unions!"? But I forget that you and your wife have that rare sexual dysfunction that leaves you unable to be aroused except by apocalypse. This is a cruel thing to say to people so clearly afflicted, but couldn't you have found something more normal to fixate on? Say, zombies. Or Christian apocalypses. Or nuclear devastation. Just a thought!

[aerius]

You want to close a $1 trillion State pension shortfall which existed prior to the markets falling apart which is now $2.5 trillion and growing. Total State revenues were $664 billion as of 2009 and projected to be $1.2 trillion or so for the next few years. Good luck with that by the way considering that 2010 revenues to date are tracking below the 2009 numbers (punch the state tab). You have a hole that's at $2.5 trillion and growing at over 20% a year, I'll be nice and cut that down to 10%. To hold the gap as it is would require $250 billion a year or nearly 38% of all current State revenues, or 20% of all pre-recession State revenues. Either you whack the pensions or you hose the citizens for that amount every year. Simple as that.

Even if we said "boom, recession over, it's 2006 again!" you still have a gap and it still keeps growing unless benefits are cut and contributions are jacked up. Once again for the learning impaired, the shortfall was over a trillion bucks in FY2008 which was prior to the recession.

You now have the revenues, pension shortfalls, and how much the shortfall is growing every year. If you want to keep the pension benefits as they are then good luck whacking 20-40% off all State expenditures, taxing citizens for that amount, or a combination that gets you there. Have fun with that. If you can't do that then pensions take a haircut. If the unions won't stand for that they can sit and spin. By next year those numbers will be worse unless we have a miracle economic recovery, you know, the one which was claimed to have started in 2nd half 2009?

---

Look, in the end the solution is simple enough that even an idiot like you can get it. Instead of "fighting for their rights" and all the other usual crap, the unions and the people must unite, lobby the shit out of the Federal government and make it pass laws which encourage employment in the US and discourage jobs from being outsourced overseas. Do you see any public workers' unions doing this? No? Well there's your problem, they got their's and fuck everyone else. Just like the rest of America. And if that's the way they're going to be then fuck'em.

[Bakustra]

You want to close a $1 trillion State pension shortfall which existed prior to the markets falling apart which is now $2.5 trillion and growing. Total State revenues were $664 billion as of 2009 and projected to be $1.2 trillion or so for the next few years. Good luck with that by the way considering that 2010 revenues to date are tracking below the 2009 numbers (punch the state tab). You have a hole that's at $2.5 trillion and growing at over 20% a year, I'll be nice and cut that down to 10%. To hold the gap as it is would require $250 billion a year or nearly 38% of all current State revenues, or 20% of all pre-recession State revenues. Either you whack the pensions or you hose the citizens for that amount every year. Simple as that.

Even if we said "boom, recession over, it's 2006 again!" you still have a gap and it still keeps growing unless benefits are cut and contributions are jacked up. Once again for the learning impaired, the shortfall was over a trillion bucks in FY2008 which was prior to the recession.

You now have the revenues, pension shortfalls, and how much the shortfall is growing every year. If you want to keep the pension benefits as they are then good luck whacking 20-40% off all State expenditures, taxing citizens for that amount, or a combination that gets you there. Have fun with that. If you can't do that then pensions take a haircut. If the unions won't stand for that they can sit and spin. By next year those numbers will be worse unless we have a miracle economic recovery, you know, the one which was claimed to have started in 2nd half 2009?

---

Look, in the end the solution is simple enough that even an idiot like you can get it. Instead of "fighting for their rights" and all the other usual crap, the unions and the people must unite, lobby the shit out of the Federal government and make it pass laws which encourage employment in the US and discourage jobs from being outsourced overseas. Do you see any public workers' unions doing this? No? Well there's your problem, they got their's and fuck everyone else. Just like the rest of America. And if that's the way they're going to be then fuck'em.

First, we start this little tango with a one-two of dishonesty. First of all, that 1 trillion shortfall was at the end of FY2008 , aka the year in which the recession started, according to the article provided. The 2.5 supposed isn't sourced, and in any case the link you provide indicates that the total debt (not deficit) for all 50 state governments in 2010 was about a trillion and change. The 2010 revenues are also tracking significantly over the 2009 numbers, to the tune of half a trillion dollars, again according to the source you provided. But that's all ancillary- I didn't bother with disputing the math when there was such a disconnect. Your purported reason (because I doubt severely at this point that you are arguing in good faith) for breaking the unions is because they haven't lobbied for anti-globalization efforts enough. I see the messianic delusions are starting to kick in, such that you feel you can separate the wheat of quiescent private-sector workers from the tares of public-sector employees. But even then, what you suggest is hardly compatible with the massive shortfall predicted and which you don't bother to qualify, implying an immediate deficit rather than the expected shortfall by some date in the future.

Regardless of whether reform is necessary, you have not shown that the destruction of public-sector unions is essential to achieving a fully-funded set of pension plans, relying instead on catchphrases and personal opinions to try and disguise your obvious resentment. You're still at the bottom of the hill, Sisyphus, and that rock isn't getting any lighter. Try not to waste your strength, such as it is, on punching fog.

[MKSheppard]

Instead of "fighting for their rights" and all the other usual crap, the unions and the people must unite, lobby the shit out of the Federal government and make it pass laws which encourage employment in the US and discourage jobs from being outsourced overseas.

The problem is...there's little left that could be done better in the US rather than overseas. I suggest you look up the list of American TV manufacturers for a place to start.

What we seem to do best are:

A.) Software innovation, as we gained a early lead by designing a lot of the architectures currently in use; and with our trained educated workforce. But that advantage is eroding as other countries are reaching technical competence levels with much lower costs.

B.) Heavy Machinery. We can produce some really nice stuff from CAT and other manufacturers that can compete globally against Komatsu, etc. China's starting to work on their own heavy machinery manufacture; and in about 20 years, we'll see the chinese affecting the heavy machinery market globally.

C.) Aerospace. This is the one industry that we dominate in. But we've been pretty staid on our laurels for far too long. Once the Chinese can get their widebody jet industry working in 30-35 years -- Seattle is going to die, since even military contracts won't save Boeing's aircraft division from large cuts.

We have no new break through technology like fully reusable TSTO spaceplanes or flyback boosters, or Mach 3 passenger aircraft with 300 passengers on the horizon to keep our status.

[aerius]

The 2010 revenues are also tracking significantly over the 2009 numbers, to the tune of half a trillion dollars, again according to the source you provided. But that's all ancillary- I didn't bother with disputing the math when there was such a disconnect.

So not only can you not do math, you're colourblind and can't read.



Guesstimated you illiterate dumbfuck, all actual numbers to date are below 2009 figures.

[Bakustra]

Instead of "fighting for their rights" and all the other usual crap, the unions and the people must unite, lobby the shit out of the Federal government and make it pass laws which encourage employment in the US and discourage jobs from being outsourced overseas.

The problem is...there's little left that could be done better in the US rather than overseas. I suggest you look up the list of American TV manufacturers for a place to start.

What we seem to do best are:

A.) Software innovation, as we gained a early lead by designing a lot of the architectures currently in use; and with our trained educated workforce. But that advantage is eroding as other countries are reaching technical competence levels with much lower costs.

B.) Heavy Machinery. We can produce some really nice stuff from CAT and other manufacturers that can compete globally against Komatsu, etc. China's starting to work on their own heavy machinery manufacture; and in about 20 years, we'll see the chinese affecting the heavy machinery market globally.

C.) Aerospace. This is the one industry that we dominate in. But we've been pretty staid on our laurels for far too long. Once the Chinese can get their widebody jet industry working in 30-35 years -- Seattle is going to die, since even military contracts won't save Boeing's aircraft division from large cuts.

We have no new break through technology like fully reusable TSTO spaceplanes or flyback boosters, or Mach 3 passenger aircraft with 300 passengers on the horizon to keep our status.

So, Shep, why do you 1) think that is and 2) think that gee-whiz fantasies of yours are essential to the preservation of American industry? What do you believe should be done about it? What about European companies that manage to survive without being dominating globally? Are they an aberration? Is this leading up to a rant about the unions?

The 2010 revenues are also tracking significantly over the 2009 numbers, to the tune of half a trillion dollars, again according to the source you provided. But that's all ancillary- I didn't bother with disputing the math when there was such a disconnect.

So not only can you not do math, you're colourblind and can't read.



Guesstimated you illiterate dumbfuck, all actual numbers to date are below 2009 figures.

Maybe you should have put a little sign about how all the projections in sources you can't be trusted or used, except when they portend some negative outcome. Maybe you should warn people that you only expect negative news to be trusted when you post it. Maybe you shouldn't bring up data fraught with projections if you want a "no-projection zone." Maybe you should respond to the totality of my post, you ghoulish sonovabitch, rather than picking individual sentences out to gleefully attack. I can see you now, giggling as you masturbate to this glorious rebuttal you have just posted, throwing your head back in orgasm- and bashing it against a door, because there is some justice in the world.

[aerius]

Instead of "fighting for their rights" and all the other usual crap, the unions and the people must unite, lobby the shit out of the Federal government and make it pass laws which encourage employment in the US and discourage jobs from being outsourced overseas.

The problem is...there's little left that could be done better in the US rather than overseas. I suggest you look up the list of American TV manufacturers for a place to start.

What we seem to do best are:

A.) Software innovation, as we gained a early lead by designing a lot of the architectures currently in use; and with our trained educated workforce. But that advantage is eroding as other countries are reaching technical competence levels with much lower costs.

B.) Heavy Machinery. We can produce some really nice stuff from CAT and other manufacturers that can compete globally against Komatsu, etc. China's starting to work on their own heavy machinery manufacture; and in about 20 years, we'll see the chinese affecting the heavy machinery market globally.

C.) Aerospace. This is the one industry that we dominate in. But we've been pretty staid on our laurels for far too long. Once the Chinese can get their widebody jet industry working in 30-35 years -- Seattle is going to die, since even military contracts won't save Boeing's aircraft division from large cuts.

We have no new break through technology like fully reusable TSTO spaceplanes or flyback boosters, or Mach 3 passenger aircraft with 300 passengers on the horizon to keep our status.

Make that laws & policies. Hell, if the US committed to building nuke plants for everyone and full fuel reprocessing instead of the retarded green energy shit they keep doing, they could get a ton of growth in high tech manufacturing, heavy manufacturing, heavy industries such as steelmaking and forging and a ton of other shit. I mean fuck, the US doesn't even have any of the heavy forge presses used to make the pressure vessels for nuke plants, all that stuff is in Japan, South Korea and China among other places.

As for stuff that's made in the US, they have Universal Instruments which is one of the world's major manufacturers of automated electronics assembly equipment. All the equipment that Foxconn & other companies in China use to assemble iPhones and other electronics comes from Universal in the US or one of less than a dozen companies in Germany, Japan, and South Korea. There's a good chance your made in China video card and computer parts were made by US made equipment. You guys should be making all those electronics at home, Research In Motion can crank out crackberries in Canada and still make a profit so I don't see why Apple, HP, and other US electronics companies can't do so as well. Back in the early 2000's I worked in the industry and we were doing tons of contract manufacturing for various US consumer electronics companies.

[The Kernel]

What we seem to do best are:

A.) Software innovation, as we gained a early lead by designing a lot of the architectures currently in use; and with our trained educated workforce. But that advantage is eroding as other countries are reaching technical competence levels with much lower costs.

Yeah sure, countries like China are rapidly catching up in software development.

Ive been in this business for five years and worked in China and India. Neither country is going to be more than an outsource target for low quality code anytime soon. Even in companies that heavily outsource development we arent stupid enough to give over projects to China or India without massive technical oversite in the US. The reason in simple: these countries cant code worth a damn and anyone good comes to the US where they can make a lot more money. This is not going to change, in fact the gulf is getting wider if anything.

[The Kernel]

You guys should be making all those electronics at home, Research In Motion can crank out crackberries in Canada and still make a profit so I don't see why Apple, HP, and other US electronics companies can't do so as well. Back in the early 2000's I worked in the industry and we were doing tons of contract manufacturing for various US consumer electronics companies.

Im not disagreeing with you but keep something in mind about RIM--they use very low cost internals to stay competitive. Their high end devices such as the Torch still use arcane ARM11 processors while the rest of the world is shipping A8 or A9MP model SOCs with full hardware GPUs.

[Big Orange]

Here's an article on how bad its getting in Britain:

Rise in youths out of work and education in England

The proportion of 16-24-year-olds not in employment, education or training in England at the end of 2010 was up on previous years, official figures show.

A total of 938,000 - 15.6% of 16-24-year-olds - were in this category (Neet) in December 2010, the highest final-quarter figure since 2005.

The government said the number was "still too high". Last week the youth unemployment rate hit a new peak.

Critics called for more investment in education rather than cuts.

Among 18-24-year-olds, the proportion who were Neet had also risen to 18.1% at the end of last year, up from the previous year, according to the figures, released by the Department for Education.

This was despite the fact that the third-quarter figures had been down on the previous year. The proportion classed as Neet changes over the academic year.

The increase comes amid concerns that young people have been hit particularly hard by the recession, as rising numbers of graduates battle for jobs and fill vacancies traditionally taken by school and college leavers.

'Back of the queue'

The proportion of 16-18-year-olds not in education, employment and training, however, has reached its lowest level, 162,000 (8.5%) since 2005.

This follows a push in recent years to encourage more 16-year-olds to stay on in education.

A government spokesperson said: "The number of young people who are Neet is still too high. It is young people who bear the brunt in any recession or downturn, which is why we are so focused on tackling the deficit and promoting growth."

The Conservative-Liberal Democrat coalition says it plans to fund 75,000 extra adult apprenticeship places, as well as offering a new Work Programme to provide "personalised support and training to help unemployed young people into work".

A spokesman from youth charity The Prince's Trust said: "As thousands of unemployed graduates flood the jobs market, Britain's most disadvantaged young people are being pushed to the back of the queue.

"These young people may have come from households where no-one works, with no positive role models, or struggled at school, leaving with few qualifications. It is these vulnerable young people who need our support to help them into jobs," the spokesman said.

Last week, the youth unemployment rate reached 20.5%, its highest since comparable records began in 1992.

The government has axed the Education Maintenance Allowance study support grant for low income students in England, and the Future Jobs Fund, which has been used to fund temporary employment for 18-24-year-olds in England, Scotland and Wales who have been out of work for more than six months.

Sally Hunt, general secretary of the University and College Union, said these moves, at a time when youth unemployment was at its highest in years, "could come back and haunt this country".

"Instead of erecting barriers to study, such as tripling the cost of tuition fees, the government should be following the example of other countries and be investing in education, not cutting the very services young people need," she said.

Figures for Neet young people are published separately in Wales, Scotland and Northern Ireland.

BBC

[JME2]

And the pressure's only going to build, if the tuition protests from a few months back are any indication.

The article's right on one point in particular: the systematic dismantling of education and the lost decade for young employees is going to bite the UK -- and the US too -- in the ass down the road.

The question that I keep wondering is, will things get bad enough here to produce young adults leading protests and riots ala the UK and Egypt?

[KlavoHunter]

Oh no! It's okay! We'll just make more McDonalds' and more Wal-Marts! That'll make enough jobs for everyone!

Sure, you'll have to work two of them to maybe make ends meet, assuming you don't get sick...

[Starglider]

The article's right on one point in particular: the systematic dismantling of education and the lost decade for young employees is going to bite the UK -- and the US too -- in the ass down the road.

As you can see, after doubling in the last ten years, education spending has now been effectively frozen in real terms;



The UK population grew by 8% in this period and average inflation was about 2.5%, so in real terms we spending roughly 45% more per pupil than we were in 2000. Would you say that the UK education system was horrible in 2000? Are we barely escaping from the utter horror by dumping buckets of money on it, and if we stop dumping at any moment or even stop increasing the size of the buckets everyone will become illiterate? Only in the world of ever-growing ever-less-efficient civil service beurecracy is 'temporary freeze in spending growth' equivalent to 'massive cuts'.

Student fees are a somewhat different issue. Tertiary sector spending is only 15% of state education spending and has been roughly flat in real per-student terms since the mid 90s. Obviously continuously increasing student numbers plus constantly rising costs (mostly administration/overhead) means that the state subsidy to each student is a smaller fraction of costs every year.