If the current economic environment continues, will

[Craig Sweet]

Yeah, I hear Illinois owes a ton of money to private businesses...I wonder how the citizens would feel about stiffing those businesses?

What do you have against taxes? Better yet, what services do you not like?

[Jud_T]

I would have liked them to have shown some fiscal responsibility when the coffers were chock full and perhaps it wouldn't have come to this.

[Patrick_Mucci]

Pat....I tihink most of the attacks on entitlement programs are misinformed.  They are called entitlement programs because you are entitled to the benefits you have paid into.  If you work, you pay taxes, you have SS taken from your pay check, and your have medicare taken out. For some reason many people think someone is getting something for nothing and that simply isnt true.  And, 95% of the people that receive entitlements are retired.

Craig,

I think the Social Security program is a good program.
Most people don't set aside funds for their retirement, Social Security mandates that, which is good.  In addition, Social Security adds far more than the participant's contributions such that a reasonable benefit can be provided.

I don't know anyone who objects to Social Security.
I think one of the complaints has to do with the inverted pyramid problem where the burden for funding for more and more people is falling on fewer and fewer people

Currently the social security fund has a nearly two trillion dollar surplus and will be paying out 100% benefits for another 25-30 years. With a small adjustment in the income cap from taxing the first $106k of income, to say the first $200k of income, the fund could continue to pay out 100% benefits into the next century.

Again, I don't think anyone objects to Social Security.
I'm not so sure the funding is as sound as you indicate.
I think the underlying assumptions might be flawed.
And, I don't think many object to increasing the taxable base, proivided that they'll get the benefit.
I'm against the means test because I think the Government, in it's flawed actuarial assumptions and thirst for revenue will not pay those who paid in substantial sums.

I am "old school in that I believe in "DEDICATED REVENUES" and not just throwing specific taxes into the general revenue pool.

The gasoline tax should go directly to infrastructure.

The alcohol and cigarette tax to fund healthcare.

[Patrick_Mucci]

Craig,

I don't think anyone objects to taxes.
I think they understand the need for taxes at the municipal, county, state and Federal level.

What almost everyone objects to is waste in government, and excess taxes.

With respect to entitlement programs, I think most object to the 20 and out pensions, where the participant worked triple time their last year in order to exponentially inflate their benefit, at the cost of gazillions to taxpayors.  You can't do that in private industry and you shouldn't be able to do it in the public sector.

Those in charge negotiated those contracts and gave away taxpayor dollars because it was no skin off their nose.
They weren't accountable, and it wasn't their money being spent and committed.
They promised benefits without any consideration to the ultimate cost.
They should have had to live by the same laws, accounting and actuarial principles that the private sector had to live by.

Today, a 39 year old who retired on a disabilty pension of $ 30,000 in NJ, is being brought to task because he's actively employed in North Carolina as a fireman.  There's more than a few things that don't seem to pass the smell test.

1.  Do you know how expensive it is to provide a lifetime pension for someone who is 39 ?
2.  Do you know how expensive it is to provide a lifetime pension to someone who is 39, with a spouse.
3.  Do you know how expensive it is to provide a lifetime pension for someont who is 39 who exponentially increases their pension
     in the last year or so of their employment
4.  Do you know how expensive it is to provide a lifetime pension to their replacement, and their replacement's spouse, and then,
    their replacement and their replacement's spouse

It's financial insanity that gets worse and worse as each 20 year generation retires in their 40's.

[Craig Sweet]

Pat, I can imagine it adds up when you pay someone a partial or full disability beginning at age 39....even if some of that is equaled on the other end when someone works past 65...

I recently read that the typical public employee pension is $19,995 a year.

[Craig Sweet]

Bye the way...the employee paid into that pension and expects it to be there when they retire.

I remember when my father died...his pension began before the pension laws chaged in the early 70's....he would have had to live until age 75 or 78 in order to get the money his company paid in....even today living til 75 is pushing the odds.

[Jud_T]

Public pensions will go the way of the buggywhip, the 8-track and betamax.  Give em a 401k with a crappy match like the rest of us.

[David_Tepper]

"Auto Rebound Pays Dividend To Work Force"

"The sweeping overhaul and surprising recovery of the American auto industry is about to pay off handsomely for the blue-collar workers at Ford and General Motors."

http://www.nytimes.com/2011/01/13/business/13auto.html?hp

[Patrick_Mucci]

Bye the way...the employee paid into that pension and expects it to be there when they retire.

Craig, paying in 150,000 and getting $ 3,000,000 isn't exactly getting your money back.
If you analyze the pay in versus the pay out, it's exponentially disproportionate.

I remember when my father died...his pension began before the pension laws chaged in the early 70's....he would have had to live until age 75 or 78 in order to get the money his company paid in....even today living til 75 is pushing the odds.

Most pensions, even before ERISA gave the retiree their choice as to the method of benefit payment when they reached NRA.
It could be a life only, or it could be a life only with 10 years certain, 15 years, certain, 20 years certain, etc.,etc.
Or, it could be a joint and survivor benefit, which is MANDATED today.

As to your father having to live to a certain age to get the full amount set aside for him, that's the way it's supposed to be if the election to receive benefits is other than a lump sum, which wasn't available to defined benefit pension plans.

You have to understand the underlying actuarial funding assumptions.

Some required that funding be completed by NRA, others allowed for funding pre and post retirement, it all depended upon how the plan was written and what the underlying actuarial assumptions were.

Pensions, defined beneifit pensions were usually accompanied by insurance equal to 100 times the monthly pension benefit, so that individuals dying prior to NRA would get a significant benefit.  Again, each plan is designed differently, but, that was THE common method for funding premature death.

Often, at NRA, the employee could take the policy as part of his pension, or buy it for its cash value

[Joe Fairey]

I don't know  how this thread has gotten here, but if anyone wants to know whats
happening in the retail auto biz...THIS IS IT.....late 2008, we bottomed.....2009 was somewhat
improved over 08....2010 was much improved over 2009....December 2010 was probably the
best RETAIL sales/profit month in many years.....the key is RETAIL(not fleet sales)...consumers are
back and they are buying.....watch the auto stocks....production will be up in 2011.....used car values
are off the chart(high)....that will not change until new vehicle production can catch up with demand....

take a look at your local dealer's lots....ask the dealer.....2011 could be a really good year....the big wild card....

GAS PRICES.....


Joe Fairey
Fairey Chevrolet-Cadillac
Orangeburg, SC

[Patrick_Mucci]

@ublic pensions will go the way of the buggywhip, the 8-track and betamax.  Give em a 401k with a crappy match like the rest of us.

Jud,

I had a debate with Bill Bradley when he was running, about his and other's desires to limit compensation to $ 200,000 on pension and profit sharing plan contributions.

Many of my clients were contributing 25 % of their employees earnings to a profit sharing plan (15 %) and defined contribution pension plan (10 %)

People were retiring with really meaningful pensions.

Employers were contributing significant sums for themselves and their employees (25 % of earnings).

Once they limited compensation to $ 200,000 employers figured out that they were getting the short end of the stick and as such they transitioned these plans to 401 K's, where you can't accumulate a damn thing, with or without matching contributions, and they took the balance as a additional compensation.

And, the government would have gotten all of the taxes when the employees and owner retired, so the government killed a wonderful employee benefit, which was a great public policy for rank and file employees

WHY ?

[Tim Nugent]

Pat, I think you answered your own question.  They found a way to get more tax dollars sooner.  I used to think they were Tax and Spenders, but now I see the light and realize they are Spend then Taxers.

[Craig Van Egmond]

From this article...  http://news.yahoo.com/s/ap/20110113/ap_on_re_us/us_broken_budgets_battling_for_business


"Bill Ecton, 54, owns Ecton's True Value Hardware in Robinson, Ill., just a few miles from the Indiana border. He was resigned to the fact that Illinois ultimately would raise taxes to repair the budget, but he said the taxes will take a toll.

"If I have to pay more to the state, it's money that I can't pay out in wages," Ecton said. "I'm not saying I'm laying people off, but maybe I'm going to look twice at adding another one." "

Another interesting quote..  http://www.csmonitor.com/Business/Latest-News-Wires/2011/0112/Tax-incentives-tax-cuts-on-Geithner-s-agenda

"U.S. Treasury Secretary Timothy Geithner meets with chief financial officers and other officials Friday to hash out ideas for simplifying and trimming the corporate tax -- nearly the highest in the industrialized world."

[David_Tepper]

"Banks Are Poised To Pay Dividends After 3-Year Gap"

http://www.nytimes.com/2011/01/14/business/14dividend.html?hp  

"Retail Sales Rise For 6th Month In December"

http://finance.yahoo.com/news/Retail-sales-rise-for-sixth-apf-473937693.html?x=0&sec=topStories&pos=2&asset=&ccode=

[Craig Van Egmond]

"What Will Cause the Next Recession?"

http://finance.yahoo.com/banking-budgeting/article/111777/what-will-cause-the-next-recession


I paid $2.99 for gas yesterday, I imagine you folks on the coasts are feeling the pinch even more.

[Lou_Duran]

"What Will Cause the Next Recession?"

http://finance.yahoo.com/banking-budgeting/article/111777/what-will-cause-the-next-recession

I paid $2.99 for gas yesterday, I imagine you folks on the coasts are feeling the pinch even more.

Friends from here who live near Laguna Beach half of the year say that gas is $.50 to $.75/gal more expensive in CA.

When I was living in SoCal, I paid over $4.50/gal. at the peak.  I couldn't even fill up my pickup truck because some stations put a limit under $100.  Some "experts" believe that the foreclosure snowball in CA began rolling when people could no longer afford to drive to work and pay their mortgages, so they stopped making mortgage payments.  In markets where the cost of an average home was sometimes over 10x gross earnings (2.5x is thought to be a prudent figure, i.e. someone grossing $100k can safely buy a $250k home), there is little margin for additional expenses.   

[jeffwarne]

"What Will Cause the Next Recession?"

http://finance.yahoo.com/banking-budgeting/article/111777/what-will-cause-the-next-recession


I paid $2.99 for gas yesterday, I imagine you folks on the coasts are feeling the pinch even more.

Craig,
We've been paying $3.20-$3.60 on Long Issland for months
my personal record is $186.50 to fill up a couple years ago  ($4.59 gas near my home)
I used to have to use 1,2, or three credit cards because then many had a $50 or $75 dollar limit.

[PThomas]

Craig,

I don't think anyone objects to taxes.
I think they understand the need for taxes at the municipal, county, state and Federal level.

What almost everyone objects to is waste in government, and excess taxes.

With respect to entitlement programs, I think most object to the 20 and out pensions, where the participant worked triple time their last year in order to exponentially inflate their benefit, at the cost of gazillions to taxpayors.  You can't do that in private industry and you shouldn't be able to do it in the public sector.

Those in charge negotiated those contracts and gave away taxpayor dollars because it was no skin off their nose.
They weren't accountable, and it wasn't their money being spent and committed.
They promised benefits without any consideration to the ultimate cost.
They should have had to live by the same laws, accounting and actuarial principles that the private sector had to live by.

Today, a 39 year old who retired on a disabilty pension of $ 30,000 in NJ, is being brought to task because he's actively employed in North Carolina as a fireman.  There's more than a few things that don't seem to pass the smell test.

1.  Do you know how expensive it is to provide a lifetime pension for someone who is 39 ?
2.  Do you know how expensive it is to provide a lifetime pension to someone who is 39, with a spouse.
3.  Do you know how expensive it is to provide a lifetime pension for someont who is 39 who exponentially increases their pension
     in the last year or so of their employment
4.  Do you know how expensive it is to provide a lifetime pension to their replacement, and their replacement's spouse, and then,
    their replacement and their replacement's spouse

It's financial insanity that gets worse and worse as each 20 year generation retires in their 40's.

Patrick _ I must disagree with you...it seems like a lot of the blowhard politicians, at least, just harp away at taxes, I guess because it is a "Safe " thing to do..usually without stating exactly how they plan to pay for things

The great bulk of the Fed Budget is made up of , I believe, the military, interest on the debt, Soc. Sec, and Medicare and Medicaid

"discretionary" spending on other items is what , 20% or so?

yet often I hear lets cut the size of the government to reduce our debt

that is small-fry stuff...until we tackle the items we spend the most on little if any progress can be made

I live in IL, and my taxes just went up 66%.....that might be a bit too high /too fast imho, but how else is the stat supposed to get out of its deadbeat status/its $15 Billion in debt?  of course i'm not happy that past politicians let the situation get this bad...of course our recent track record of electing governors in Illinois is dubious to say the least...

generally speaking, I think the anti-tax rhetoric has gone way too far

[David_Tepper]

Craig Edgmand -

Thanks for posting the link to that article. I am glad to see the "wall of worry" is still very much intact.  

DT

[Craig Van Egmond]

Craig Edgmand -

Thanks for posting the link to that article. I am glad to see the "wall of worry" is still very much intact.  

DT

"When I smile, tell me some bad news...   Before I laugh and act like a fool"   The Who.

[David_Tepper]

"Intel Reports Record Quarter And Record Year"

http://uk.finance.yahoo.com/news/Intel-reports-record-quarter-digilook-1596040001.html?x=0&.v=1

[Jud_T]

David,

Weren't you the guy in the other thread who was waiting for the big equity correction to buy in?  And where are all the guys who were ripping me for not recommending having all your money in the mattress last fall?

[David_Tepper]

Jud -

No, I am 99.9% certain that was not me!
If you can find a post from me confirming what you allege, I will gladly eat my words.  

Here is the prior thread premised upon Pat Mucci's dubious wisdom on the state of the economy:

http://golfclubatlas.com/forum/index.php/topic,46308.0.html   

DT
tcmnav@aol.com

[JR Potts]

I still have all my money in the mattress and my house.

Afterall, you can't get hurt with dirt. 

[Jud_T]

David,

Sorry.  I looked and it wasn't you....apologies and congrats!