Unions kill the twinkie?

[Steve]

Let's imagine that your son is working for an account that will eventually pay for his schooling. This account is currently paying for other people's schooling now. It's also paying for other things it was never intended to pay for, thus there are a substantial amount of IOUs in it. If economic conditions remain exactly the same, maybe we can tweak the system to take in more now and pay out less in the future. Maybe we could cover your son's bill. But will it be around to pay your grandson's bill? Will we be able to stop the stress on the system being caused by the borrowing? What if economic conditions change and it's harder and harder to make those payments? What if an exceptionally large group of people need assistance on top of that?

It's too idealistic to think that we can simply fix this. Given the choice, there is no way people would choose that level of risk....but we're forced to accept it.

We can have a discussion about social security in a different thread. I've participated in them in the past and will be happy to do so again. But in this thread, bob said something that wasn't correct. Not a philosophical difference of opinion. It isn't right. My analogy wasn't intended to advocate for or against social security. It is simply intended to distinguish between the three different issues that bob is conflating. Once again, double counting assets, solvency of ssa, and the "full faith and credit" of the United States are three different things.

As an aside, the FICA tax is regressive in that only the first hundred grand or so of income is taxed. Removing the earnings cap, while adding another tier to the payment calculation would eliminate any kind of solvency issues for my grand kids, and their grandkids, too.






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[Makalakumu]

We can have a discussion about social security in a different thread. I've participated in them in the past and will be happy to do so again. But in this thread, bob said something that wasn't correct. Not a philosophical difference of opinion. It isn't right. My analogy wasn't intended to advocate for or against social security. It is simply intended to distinguish between the three different issues that bob is conflating. Once again, double counting assets, solvency of ssa, and the "full faith and credit" of the United States are three different things.

As an aside, the FICA tax is regressive in that only the first hundred grand or so of income is taxed. Removing the earnings cap, while adding another tier to the payment calculation would eliminate any kind of solvency issues for my grand kids, and their grandkids, too.






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Fair enough, but I think there a lot assumption inherit in what you are saying.

 

[arnisador]

Once again, double counting assets, solvency of ssa, and the "full faith and credit" of the United States are three different things.

Agreed.

As an aside, the FICA tax is regressive in that only the first hundred grand or so of income is taxed. Removing the earnings cap, while adding another tier to the payment calculation would eliminate any kind of solvency issues for my grand kids, and their grandkids, too.

This is not the best way to do things but it is an easy and achievable way to do it and so I'm all for it.

 

[Steve]

Agreed.



This is not the best way to do things but it is an easy and achievable way to do it and so I'm all for it.

'Best' is a subjective term. But it illustrates that solvency isn't the huge crisis some suggest.

The main thing in this thread is pointing out that social security isn't anything at all like executives who wrote off retirement funds in a bankruptcy. I understand that some here are against social security and that's fine. But that's a discussion for another thread.


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[granfire]

'Best' is a subjective term. But it illustrates that solvency isn't the huge crisis some suggest.

The main thing in this thread is pointing out that social security isn't anything at all like executives who wrote off retirement funds in a bankruptcy. I understand that some here are against social security and that's fine. But that's a discussion for another thread.


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well, if they did not have the retirement fund, the workers would have gotten more hourly money...boo, right.

 

[Makalakumu]

The main thing in this thread is pointing out that social security isn't anything at all like executives who wrote off retirement funds in a bankruptcy.

I'm not sure I understand where you are coming from. From my understanding, I see the results as a microcosm of what could happen with Social Security benefits if the US doesn't get it's financial house in order. I know some of the causes are different, but some of the causes are eerily similar as well. There are some major economic difficulties driving all retirement funds into trouble right now, including SS.

 

[Makalakumu]

well, if they did not have the retirement fund, the workers would have gotten more hourly money...boo, right.

Yeah, and that's a major difference between this situation and SS. Employers are making promises they can't keep in order to keep wages lower. That is being driven by global economic factors and I think it's going to affect everyone's pension plan, public or private. For example, teachers unions are getting a rude awakening right now and the state probably wasn't negotiating in good faith.

The end result is that these bad problems are going to fold pensions across the board. This will probably strain the SS safety net to the breaking point...along with other things.

 

[Steve]

I'm not sure I understand where you are coming from. From my understanding, I see the results as a microcosm of what could happen with Social Security benefits if the US doesn't get it's financial house in order. I know some of the causes are different, but some of the causes are eerily similar as well. There are some major economic difficulties driving all retirement funds into trouble right now, including SS.

First a disclaimer. I'm on cold medicine right now, so I'm drowsy. I'll try to make sense and be brief. I agree with you that the USA needs to get its financial house in order.

The thing I was driving at earlier is that this is about the full faith and credit of the USA vs a business model that considers bankruptcy as a viable business tool. The issue comes down to something that happens routinely compared to something that has never happened. Could it? Sure, but it is extremely unlikely. The trust fund is invested in treasury bonds and are as secure as US savings bonds.


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[Steve]

Yeah, and that's a major difference between this situation and SS. Employers are making promises they can't keep in order to keep wages lower. That is being driven by global economic factors and I think it's going to affect everyone's pension plan, public or private. For example, teachers unions are getting a rude awakening right now and the state probably wasn't negotiating in good faith.

The end result is that these bad problems are going to fold pensions across the board. This will probably strain the SS safety net to the breaking point...along with other things.

An argument against privatization, if you ask me.


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[arnisador]

An argument against privatization, if you ask me.

The very reason we have Soc. Sec. is because that argument is officially settled beyond any reasonable doubt. Young people will not plan for the future in adequate numbers unless you make them do so, and businesses will raid pension plans (or things will otherwise go wrong) unless you stop them (which is hard). But the govt. is always there--and if it isn't, your retirement plan is no longer your #1 worry.

 

[billc]

Well, there are politicians already looking at private retirement plans and all the money just sitting around in there. There is the concept of the government taking over private retirement accounts, for the good of the people investing in them, and then giving a guaranteed return, in return for government management. Sooo...don't think that the government is going to let you keep any money if they can get their hands on it.

http://www.redstate.com/mkozikowski/2012/06/01/guarnateed-retirement-account-take-two/

The impetus behind the government’s proposal to create a
‘Guaranteed Retirement Account’ for all Americans is the
need/desire to get their greedy little hands on the $18 Trillion
That Americans have in Stocks, IRA’s, 401K’s, Pensions, and savings.
That money, The Government believes, is really theirs. They
just don’t know how to get at it.

Here is a more detailed look at the government getting its hands on your private retirement money...

http://www.sharedprosperity.org/bp204/bp204.pdf

Guaranteed Retirement Accounts are efficient and funds are targeted toward retirement.
Contributions are made efficiently and consistently through payroll deductions and funds are not accessed until retire- ment, disability, or death. The Social Security Administra- tion has a proven track record of efficient management and already maintains portable accounts for all workers. Funds are pooled and professionally managed, taking advantage of economies of scale and dispensing with the high fees asso- ciated with 401(k) plans and other individual accounts.

:lfao:

 

[DennisBreene]

Well, there are politicians already looking at private retirement plans and all the money just sitting around in there. There is the concept of the government taking over private retirement accounts, for the good of the people investing in them, and then giving a guaranteed return, in return for government management. Sooo...don't think that the government is going to let you keep any money if they can get their hands on it.

http://www.redstate.com/mkozikowski/2012/06/01/guarnateed-retirement-account-take-two/



Here is a more detailed look at the government getting its hands on your private retirement money...

http://www.sharedprosperity.org/bp204/bp204.pdf

:lfao:

I'm glad you put the laughing icon there. Otherwise I was going to suggest a psychiatric referral. Thankfully our beloved government is efficiently manageing a large pile of IOU's from incessant legislative raiding of SSI funds. Maybe the Chinese can figure out how each working person in the US will support slightly greater than one person on some sort of entitlement program through their payroll withholdings. If the gov't gets its hands on our private pensions, there won't be enough abacases in the world to calculate how to survive retirement with the assetts that trickle down into our monthly checks.

BTW; weren't we talking about union manufactured twinkies?

 

[Steve]

I'm glad you put the laughing icon there. Otherwise I was going to suggest a psychiatric referral. Thankfully our beloved government is efficiently manageing a large pile of IOU's from incessant legislative raiding of SSI funds. Maybe the Chinese can figure out how each working person in the US will support slightly greater than one person on some sort of entitlement program through their payroll withholdings. If the gov't gets its hands on our private pensions, there won't be enough abacases in the world to calculate how to survive retirement with the assetts that trickle down into our monthly checks.

BTW; weren't we talking about union manufactured twinkies?

Took a bit of a tangent when bob took a pot shot at social security in post 154.



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[arnisador]

As predicted:

[h=1]Hostess Executive Bonuses: Twinkie-Maker To Seek Approval For $1.8 Million In Bonuses During Liquidation[/h]

Hostess seeks approval in U.S. Bankruptcy Court in the Southern District of New York in White Plains, N.Y. to give its top executives bonuses totaling up to $1.8 million as part of its wind-down plans. The company says the incentive pay is needed to retain the 19 corporate officers and "high-level managers" during the liquidation process, which could take about a year.

Two of those executives would be eligible for additional rewards depending on how efficiently they carry out the liquidation. The bonuses would be in addition to their regular pay. A spokesman for Hostess noted executives will need to meet certain goals to get the bonuses.

 

[shesulsa]

As predicted:

Hostess Executive Bonuses: Twinkie-Maker To Seek Approval For $1.8 Million In Bonuses During Liquidation

Of course.

 

[granfire]

a bonus for carving up the company you killed....

 

[Cryozombie]

As predicted:

Hostess Executive Bonuses: Twinkie-Maker To Seek Approval For $1.8 Million In Bonuses During Liquidation

Of course.

Ok, you are obviously against this, so let me ask you a question, If the purpose of these "bonuses" is to keep the executives on board until the end, to make sure the work gets done, and that is a bad thing, what is your solution for making sure the executives stay and do the work? I ask not in their defense, but because I am truly curious. The Hospital I work for was just sold, our jobs are up in the air and employment for us is uncertain. All I know is that once the merger is complete I may or may not have a job. As such, I am looking for a new position just in case. If they came to me tomorrow and said "It's official, in March your job is being eliminated, I'd have very little incentive to stick around, and probably wouldn't. If I did, you can bet I wouldn't be invested or even really care if my job gets done or not... Unless maybe they told me "In march, your job is being eliminated, but at that time, if you are still here you will receive a 6 month severance package"... so I get what they are doing.

If you think that is so horrible, what is your solution?

 

[WC_lun]

Cry, I understand what you are saying, but the executives' history don't lend to give them the benefit of the doubt. The union took a 20%+ pay cut at these executives request, while the executives took a 300% increase in pay. The union authorized the executives to borrow money from the pension plan, which the executives then decided they couldn't pay back. Now they are requesting $1.8 million in fees. Seems they have already proven any request they have regarding money should be viewed with great skeptasism.

 

[cdunn]

Ok, you are obviously against this, so let me ask you a question, If the purpose of these "bonuses" is to keep the executives on board until the end, to make sure the work gets done, and that is a bad thing, what is your solution for making sure the executives stay and do the work? I ask not in their defense, but because I am truly curious. The Hospital I work for was just sold, our jobs are up in the air and employment for us is uncertain. All I know is that once the merger is complete I may or may not have a job. As such, I am looking for a new position just in case. If they came to me tomorrow and said "It's official, in March your job is being eliminated, I'd have very little incentive to stick around, and probably wouldn't. If I did, you can bet I wouldn't be invested or even really care if my job gets done or not... Unless maybe they told me "In march, your job is being eliminated, but at that time, if you are still here you will receive a 6 month severance package"... so I get what they are doing.

If you think that is so horrible, what is your solution?

Fire them, enforce any bonus claw-backs possible inside their contract for their hideous failure, and pay the requisite outsiders to come in and sort out the mess. Alternately, let them close it, rub their noses in it that it's their fault, and if they walk off the job, sue the **** out of them for breach of contract, if possible.

They ran this company into the ground. They should not be rewarded by ownership. Frankly, they shouldn't be trusted to maximize the sale value of the company's assets, given their track record of failure. This would be comparable to your situation with your hospital closing if and only if your hospital was closing because you got enjoyment from slipping mercury salts into IVs.

 

[arnisador]

Ok, you are obviously against this

I'm not against it, since as distressing and disagreeable as it is it does make business sense--my point is that I predicted it'd happen but some disagreed.