Situtation CALPERS finds itself in due to the insane ZIRP which has been in place going on 10 years now:
The pension fund is more than $139 billion in the red and just reported another awful year of investment returns.
Unlike your 401(k) that might increase or decrease in value with the stock market, public sector pension benefits are locked in place. If investment returns fall, the retirees' benefits aren't at risk because taxpayers are obligated to make up the difference. Most state pension funds are deep in debt, but CalPERS is among the worst in the nation.
Things are only getting worse, since the fund reported in July that it had achieved just a 0.61 percent rate of return in the past 12 months. The system is based on the assumption—a bad one, according to people who study this sort of thing, like the Society of Actuaries—that it will earn 7.5 percent every year. Anything less than that only adds to what taxpayers already owe in the form of future pension promises.
California’s Six Figure Pension Club Has More Than 20,000 Members https://t.co/9CPdsTdVRB— reason (@reason) August 9, 2016
13 comments:
Tell those six figures that they're out of luck. But no, it's only the modest pensions of ordinary seniors that get the cut.
Glad to see you have your priorities straight.
Bob nobody is getting a cut... they spend less on public services/infrastructure...
That's why when you drive around the roads here and look at the roadsides the grass is 3 feet tall... Cali gets the wildfires... etc... "no money!"....
We need the risk free rate back at 5 or 6 percent pronto... then CALPERS has a better chance of getting their 7.5% goal... but also the damage has already been done and they will stay in the hole
The proper, ethical, moral way to lower interest rates in fiat is via equal fiat distributions to all citizens into their inherently risk-free individual citizen accounts* at the central bank itself for lending, if desired, to banks or others.
Then who can complain? Since the means to lower interest rates would benefit all citizens equally?
*Currently not allowed but inevitable(?) given the recurrent messes that government privileged depository institutions cause and, perhaps, the outlawing of physical fiat, a.k.a. "cash".
We need the risk free rate back at 5 or 6 percent pronto... Franko
So where in the Bible is welfare to be proportional to wealth?
If California retirees need welfare then it should be given to them based on need, not their account balance(s).
This isn't moral rocket science, is it?
The NT is not a free will behavior modification program.... We can operate these systems any way we want to...
"So where in the Bible is welfare to be proportional to wealth?"
Right here: "For whosoever hath, to him shall be given, and he shall have more abundance: but whosoever hath not, from him shall be taken away even that he hath." Mat 13:12 (KJV!)
Even the KJV gets this one...
Here: "God, Who wills that all mankind be saved" 1 Tim 2
We are created in His image we are going to have a cohort among us who subsequently SAVE... proceed accordingly....
Andrew,
Are you suggesting these people are "faking it"? :
http://www.aetv.com/shows/hoarders
Or making the wrong free will choices???
I dont think so...
And the disciples came and said to Him, “Why do You speak to them in parables?” Jesus answered them, “To you it has been granted to know the mysteries of the kingdom of heaven, but to them it has not been granted. For whoever has, to him more shall be given, and he will have an abundance; but whoever does not have, even what he has shall be taken away from him. Therefore I speak to them in parables; because while seeing they do not see, and while hearing they do not hear, nor do they understand. In their case the prophecy of Isaiah is being fulfilled, which says,
‘You will keep on hearing, but will not understand;
You will keep on seeing, but will not perceive;
For the heart of this people has become dull,
With their ears they scarcely hear,
And they have closed their eyes,
Otherwise they would see with their eyes,
Hear with their ears,
And understand with their heart and return,
And I would heal them.’ Matthew 13:10-15 [bold added]
But what is it one must have?
So take care how you listen; for whoever has, to him more shall be given; and whoever does not have, even what he thinks he has shall be taken away from him.” Luke 8:18
Answer: To have listened carefully to the word of God
He's rather saying they were too stupid to understand in the first place so why bother...
Matt, when private pensions go bust, they get cut. With public pensions, there is the opportunity to make "progressive" cuts.
we are going to have a cohort among us who subsequently SAVE... Franko
The issue isn't saving*; the issue is welfare proportional to saving.
*Though inherently risk-free accounts at the central bank should have a per-citizen limit of, say, $250,000 US before negative interest applies to discourage fiat hoarding.
"For whosoever hath, to him shall be given, and he shall have more abundance: but whosoever hath not, from him shall be taken away even that he hath."
I would interpret this as:
If you keep on adding (0) zeros in front of the one (1) then it makes no difference to the (1). Add them on the other side and you end up with (1000’s).
So, if a human being knows what is inside then that is the beautiful and initial state of (1). But if the human being has no clue as to what is inside, then that is the initial state of (0) – the (1) is there but not recognised. So no matter how many zeros are added or taken away to (0) it still all sums to zero.
People think that by adding zeros to themselves they are wealthy and when they are taken away they are poor. When all the time, the wealth was in the (1).
This is life’s little joke with the human being; the wealth is in the consciousness ....!!! And laughter rings out amongst the stars. ‘Oh mankind’ said Kabir – ‘where are you going, what do you want’? If I cast my vote for H or T, will that make a difference?
The issue isn't saving*; the issue is welfare proportional to saving.
He doesn't believe in that AA.
He has no problem that for example a foreign or national magnate who owns a lot of T-Bills may be getting hundreds of millions risk-free as long as the low pensioner gets his cut. Because he doesn't think that the magnate getting all that millions affects him in any way (through indirect consumption and inflation -ie. as you would say stealing purchasing power-, buying local influence, etc.).
Instead of a more nonsensical approach: put money on the pensioners pocket, where it's needed. Matt is a classical conservative: don't mess with the status quo, because it worked for me in the past.
The problem with the 'past' is that is limited to one's own expectations and direct experience. Hard to extrapolate to every condition and the future in general, and not necessarily working for the best.
Matt accept it: this won't end by increasing IR to 5% It hasn't done anything for most of the people for the past 20 years.
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