Does anyone feel the Recovery?

[Keim]

The problem is that these governments are treating symptoms that are largely unrelated to the cure. The real culprit for many state and local government is the ongoing (and worsening) problem with current and future liability for retirement benefits already promised (and often guaranteed by law). Laying people off, adding unpaid furloughs and cutting base pay are an immediate-term fix that does little or nothing to resolve the longer-term underlying problem -- ongoing public employee retirement obligations, including many places where new hires are still getting the same retirement deal that has already gotten these governments in real financial trouble.

Agreed-somewhat! State departments are doing what they can by instituting furloughs, closures, etc. given budgetary limits provided by the legislature. It takes an act of the legislature to make the changes you suggest. And that is a tough call-politically and morally.

 

[ziggy29]

It takes an act of the legislature to make the changes you suggest. And that is a tough call-politically and morally.

Agreed where existing promises to current employees and retirees are concerned, but it shouldn't be *that* tough to merely change it for future new hires. Beyond that, yeah, you have real tough political and ethical sledding. Seems like they should still go for the "low hanging fruit" with respect to new hires, though. As I said before, that might help "save" the promises already made and help reduce the layoffs and pay cuts that threaten to undermine the recovery -- and give us more cost-certainty with a pay-as-you-go compensation model.

 

[Keim]

Agreed where existing promises to current employees and retirees are concerned, but it shouldn't be *that* tough to merely change it for future new hires. Beyond that, yeah, you have real tough political and ethical sledding. Seems like they should still go for the "low hanging fruit" with respect to new hires, though. As I said before, that might help "save" the promises already made and help reduce the layoffs and pay cuts that threaten to undermine the recovery -- and give us more cost-certainty with a pay-as-you-go compensation model.

I agree that cutting benefits for new hires is an easy decision. There is a small political dimension, and no moral problem. A simple business decision. Much tougher sledding (I like that phrase-thanks) for current employees and retirees. I've been involved in the decision making process when it involves current staff benefit cuts. A simple business decision is not nearly such a simple moral (or morale!) decision in that case.

One could have an interesting discussion whether cutting pensions for retirees would benefit the department at the cost of the overall state. I.E. the department realizes a cost savings. But, due to their reduced economic well-being said retirees now create an even larger drag on the state because of their decreased spending power, and increased use of state resources in the form of welfare, medicare, food stamps, etc.

 

[Running_Man]

Agreed where existing promises to current employees and retirees are concerned, but it shouldn't be *that* tough to merely change it for future new hires. Beyond that, yeah, you have real tough political and ethical sledding. Seems like they should still go for the "low hanging fruit" with respect to new hires, though. As I said before, that might help "save" the promises already made and help reduce the layoffs and pay cuts that threaten to undermine the recovery -- and give us more cost-certainty with a pay-as-you-go compensation model.

I don't see how these states are going to ever possibly meet their obligations, it is a fantasy that is going to end in bancruptcy of the states. Illinois was issuing billions in bonds to invest in the pension funds in the stock market, amounts that have a very current turnaround and resulted in losses and a present unfunded liability of 61 billion. It has not worked out well for the state. With Illinois owing 130 billion they do not have the cash to maintain the illusion they have created. This pension liability is not something that has historically existed in states in great times of stress. The retirees with inflation adjusted pensions from states like Illinois will find their retirement may not be very secure. Terry Savage wrote a very good column in the Chicago Sun-Times explaining the problem:

Several pension reform proposals have been presented to the Illinois Legislature. Even the most gentle reforms would require the state to make additional annual pension contributions of more than $12 billion every year. Simply cutting benefits for current or future retirees comes nowhere near to solving the problem

Emperor has no clothes: Pensions are short cash :: CHICAGO SUN-TIMES :: Terry Savage

 

[Keim]

Undoubtedly the states will need to make changes. Businesses figured out they couldn't offer these packages about 20 years ago. Gov't will need to realize the same thing.

 

[Zero]

Well, my thread on anectdotal evidence of a recovery has spawned an VERY interesting but unrelated conversation. One I would like to chime in on also but maybe it could be a separate thread.

Wonder if Ziggy29 being a moderator could move the posts related to the state government issues to a new thread?

I will start one called Probability that your state may Bankrupt soon!

 

[Pete]

So the bears are realists grounded in macroeconomic facts....

Certainly not. It's just I've been alive for 50 plus years. I've watched the US become a place that prints money for a living. We use it to buy oil, products, and services from all over the world. Our deficits rise (federal, trade, and otherwise) and things just keep going on. I was told there are no free lunches, but it appears there is. Seems as though the Bears (those calling for a reversal of this situation) have logic on their side. Seems as though they know what ought to happen.

 

[jIMOh]

Well, my thread on anectdotal evidence of a recovery has spawned an VERY interesting but unrelated conversation. One I would like to chime in on also but maybe it could be a separate thread.

Wonder if Ziggy29 being a moderator could move the posts related to the state government issues to a new thread?

I will start one called Probability that your state may Bankrupt soon!

link please?

 

[ziggy29]

Well, my thread on anectdotal evidence of a recovery has spawned an VERY interesting but unrelated conversation. One I would like to chime in on also but maybe it could be a separate thread.

Wonder if Ziggy29 being a moderator could move the posts related to the state government issues to a new thread?

I don't really think a new thread is necessary, though now that you started a new one, that side discussion can continue there. In reality that does have a lot to do with whether or not the current recovery is (a) sustainable and (b) will eventually translate into a recovery of the job market. Along with the health care mess, this problem is another 800 pound gorilla that will only get worse the longer we sweep it under the rug and pretend everything is okay.

 

[Woz2000]

You are in NYC during a weekday. The people that go to those stores do not live in NYC, won't travel to NYC to shop in those stores, or are busy working.

If you want a better gauge in NYC during the weekday, check out Tiffany's, LV, Saks, Prada, Cartier, etc.

I just spent a few days in Manhattan with a large number of retail stores near my downtown hotel and my wanderings through them during the day actually made me depressed.

I went to a Macy's, a BB&B, a H&M, an Old Navy, and several more. In all of them, and I do mean ALL, there were many more staff than customers. At the BB&B near Columbus Circle, at 3PM, I was the only customer in the store for several minutes and did not see more than 3-4 other customers in the 30 minutes.

As Buffett and Lynch, before him, I tend to believe what I actually see, and I do not see a recovery.

Anyone else with a better story, I need something to give me optimism?

 

[plex]

http://www.early-retirement.org/forums/f29/which-states-to-not-retire-in-48866.html

 

[wolfbay]

I've seen evidence that economic activity is improving somewhat in our area.To me this indicates we have deep fundamental problems with our economy . If this was any other post WW2 recession and the Fed and treasury threw trillions at the economy by borrowing and printing we would have a Huge rip roaring recovery by now. Of course my wife says I'm a pessimist.Hopefully she's right.

 

[IndependentlyPoor]

One of the new homes under construction in Austin.

Somebody is doing well.

 

[Bimmerbill]

I never really felt the recession, so don't really feel the recovery.

 

[Zero]

One of the new homes under construction in Austin.

Somebody is doing well.

View attachment 8370

What the heck is that one section, an Air Traffic Control Tower?

 

[audreyh1]

One of the new homes under construction in Austin.

Somebody is doing well.

Is that really just one home? I think I remember seeing it from Loop 360 and wondered.

Ever since 2005 driving the loops around the outskirts of Austin you see mansion after mansion. I mean there were plenty before, but there seem to be way more now. Clearly Austin has become one of the most affluent cities in the nation.

Audrey

 

[IndependentlyPoor]

What the heck is that one section, an Air Traffic Control Tower?

I suspect it is an observatory. They seem to be all the rage now in Austin mansions. Lord British, the guy who wrote the original Ultima, has one, among others.

 

[IndependentlyPoor]

Is that really just one home? I think I remember seeing it from Loop 360 and wondered.

Ever since 2005 driving the loops around the outskirts of Austin you see mansion after mansion. I mean there were plenty before, but there seem to be way more now. Clearly Austin has become one of the most affluent cities in the nation.

Audrey

Yep, a single family home designed to look like an Italian hilltop village. The owner is a co-founder of one of the Austin high-tech companies. No, not Dell. His monster house is modern style.

 

[travelover]

Yep, a single family home designed to look like an Italian hilltop village. The owner is a co-founder of one of the Austin high-tech companies. No, not Dell. His monster house is modern style.

A house for a man with a really tiny wiener.

 

[yakers]

A house for a man with a really tiny wiener.

Could be right, but I bet a tiny wiener and that house could get a guy a lot of female attention. Then again, I have a tiny house.

 

[clifp]

I suspect it is an observatory. They seem to be all the rage now in Austin mansions. Lord British, the guy who wrote the original Ultima, has one, among others.

Wow he still has enough money left from the Ultima series to build an observatory. I thought Texas game designer spent all their money on fast cars, and woman.

 

[audreyh1]

Yep, a single family home designed to look like an Italian hilltop village. The owner is a co-founder of one of the Austin high-tech companies. No, not Dell. His monster house is modern style.

A co-founder another high-tech company in Austin built a Mayan temple home - complete with ball-court swimming pool and yep, an observatory.

Audrey

 

[CuppaJoe]

And there was the guy who invented computer games....

 

[BunsGettingFirm]

Wow he still has enough money left from the Ultima series to build an observatory. I thought Texas game designer spent all their money on fast cars, and woman.

He said that he actually blew most of his money for a $20 million trip to the Russian space station.

I had no idea that a game designer can make that much money. It's probably not from the original Ultima game but from all the other games that one franchise spawned.

 

[ziggy29]

I had no idea that a game designer can make that much money. It's probably not from the original Ultima game but from all the other games that one franchise spawned.

I don't know -- he got a fair bit of my coin back in the '80s and early '90s...