Let’s get this straight….AIG continues to get never ending TARP money – with no limits! The concept is that “if” we don’t support AIG and all their “Toxic Assets” all the world’s dominos will fall. The End Times will consume us all and Credit Card Companies will raise their rates to uncontrollable levels! No one will be able to get home loans, no one will be able to get car loans and no one will be able to borrow money to send their kids to college.
In the meantime, “The US Pension Vulture” is coming home to roost. In the case of the City of Los Angeles and about everywhere else in this country, the “3 at 50 Boo Bird” is eating our popcorn before we even get to our theatre seats. Now that the citizens of California have refuted our Governor’s pleas for greater and greater taxes…..some conceptualize that they might even have to cut the cost of government! An outrage! Cutting the cost of government? Are they kidding? Even local cities and counties continue to grow government…..not make it smaller…..so how in the world can the lowly State of California do any such intelligent thing? Are they willing to hold back the Bureaucrats, Government and Public Employee Annual COLA’s too?
OK, back to the Bailouts: All the Banks are threatening to give back that nasty TARP money to the Federal Government. To all those Banks we say: “Make our day!” Additionally, Banks like Capitol One are sending out “Change of Terms” papers like crazy….to all their clients. It doesn’t matter that your FICO is 800 or above….they just are letting it fly….moving most interest rates from 8 or 9% up to 17 and 18% for Purchases, 24 to 25% for Balance Transfers and 29 to 30% for Cash Withdrawals. The President is scheduled to sign the Credit Card Relief Act this week-end which does not go into effect for nine months. By that time, we will all be pregnant with higher interest rates on every Credit Card in America.
In the middle of all of this, we are experiencing higher food and energy costs, higher taxes, prescription drug costs – all higher actual “costs of living”! What has gone down? Property Values! The only good deals out there are on “Foreclosures”. Everyone else in So. Cal. is either holding on to their property and not selling or desperate but still will not lower the selling price. So, how in the world can the Federal Government in it’s wisdom suggest that Social Security recipients…..NOT get a COLA increase next year? Are they telling us that the cost of living is going to go down in 2010? Are they telling us that it is OK to bail out Bankers, Businesses, Governments, Cities, Counties and Foreign Countries?….but for Retired Social Security people….NAH!!
We implore the President to chat up with his HHS Secretary and alter this policy before 2010. Old people on fixed income around the country that are not employed or employable…..are going to experience higher cost of living and holding back a 2.9% COLA increase….when they bail everyone else out..is ludicrous!
Regarding the 3 at 50 issue, within the 3% at 50 group there is a significant trend of retiring in their early 50’s and then turning to some other public agency and hiring on – thus drawing 3% at 50 retirement plus public sector pay for a new job/career elsewhere. In some cases the retiree successfully claimed a disability retirement, and even so has found employment with some other public agency. Some are beginning to ask if this growing practice is o.k. or if it is an abuse of the system. In these tough economic times this practice could become the target of a public backlash.
With regard to annual COLA’s for public employees, I have read numerous articles from around the country that reflect a trend of COLA’s not being granted, but also salary reductions are occurring (along with layoffs). That seems to be the current trend.
With regard to lack of a Social Security COLA, what is there about “the system is broke, there is no money” you don’t understand?
*Bailout who? The reason the Social Security System is under funded is that Public Employees don’t put any money into it….and what about that do you not understand?
Not entirely true Ron and Anna (No. 2 post). Some cities and counties do participate in both Social Security and a government retirement plan. (I believe the County of Ventura may be one of them.) As for those that do not, the employees do not have a choice of contributing or not – it is the municipality that makes the decision to not participate, saving something like 7.5% of payroll (up to the annual earnings limit) by not doing so. In the past federal legislation to require state and local government to participate in Social Security has been oppopsed by many of those local government agencies, including the County of Orange – because of the cost. Employees of the municipalities that do not participate not only are not eligible for Social Security at retirement age, once they are 65 they are not eligible for Part A of Medicare either – and if their public agency retirement plan does not provide health insurance coverage (and a lot do not) they then must purchase their own health insurance (if they can find it) or do without.
It would seem to me that as far as the insolvency of Social Security the public sector employees who do not participate in it either as donors or takers are not a cause of the program being under-funded – that is a zero sum reality, is it not?
Lastly, the latest bailout I am hearing about in today’s news is several billion for GMAC in hopes that will enable people to buy GM and Chrysler cars. So, we bail out the manufacturers, then we bail out the consumer financeers. Wonder where it will end?
Cas Ob –
“Employees of the municipalities that do not participate not only are not eligible for Social Security at retirement age, once they are 65 they are not eligible for Part A of Medicare either – and if their public agency retirement plan does not provide health insurance coverage (and a lot do not) they then must purchase their own health insurance (if they can find it) or do without.”
Let’s put it together this way – As the number of participants of the working falls…especially those making a “working wage” for the SSN System..
the greater input is obvisously diminished…to the point that two major things happen: (1) Rich people need to be “Means Tested” to find out whether they should get “theirs”. and…(2) The age of the existing recipients has to be raised in order to make the cuts necessary to supply the cash required. It’s rather funny when you think about it. People have been spending years figuring out ways NOT TO PAY their SSN payments during their working years….then complain bitterly when they find out they will only be getting $500 bucks a month…because they didn’t report their true earnings…over the years. The system only requires 40 quarters which is 10 years the way we count to qualify. If every Public Employee had been made to deposit “their” required portion…the system presently would be more than viable.
It is an intersting theory, Winships, but I suspect it is more of a WAG then a conclusion reached by financial analysis. And, keep in mind, that would require the employing public agency to make the commitment to pay the employer’s share (In reality I have seen public agencies use the fact that employees do not have to pay into Social Security in labor negotiations to help sell a wage that is lower than the private sector equivalent, arguing that the take home pay is actualy not that diffferent because the public agency employee gets to “keep” the 7.5% that a private sector employee would have to pay into SS). As for means testing, it began for Medicare in 2007 – it is now a reality. I will conclude by opinionating that I personally believe the greatest underfunding of SS and Medicare is due to the underground economy of unreported wages. It has to be huge.