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Khan Academy: the Future of Taxpayer Reeducation?

Unknown Lamer posted about 2 years ago | from the illegal-in-michigan dept.

Education 386

theodp writes "Illinois Governor Pat Quinn has launched a website and gone social on Facebook, Twitter, and YouTube to educate taxpayers on why they must make good on pension promises to state workers. And, in addition to Squeezy the Pension Python, Gov. Quinn is enlisting the help of Khan Academy, the tax-exempt, future-of-education organization funded by tax-free millions from Google, Bill Gates, and others, to help convince taxpayers that a state-pension-promise is a promise. In the Khan Academy video commissioned by the Governor, Illinois Pension Obligations, Sal Khan concedes that the annual annuity payouts for IL state employee retirees do look 'pretty reasonable' — e.g., $43,591 for the average teacher, $117,558 for a judge — but goes on to argue that 'in all fairness, this was promised to these people,' who he speculates 'probably took lower compensation while they were working,' 'probably stayed in the jobs longer,' and 'probably sacrificed other things' to get these 'great benefits.' 'We're delighted to have his [Khan's] help in enlightening Illinois citizens about how the pension problem came to be,' said the Governor. Of course, not everything can be explained in one video — perhaps other contributing factors like 'pension spiking', lobbyists' maneuvers, sweetheart deals, creative job reclassification, golden parachutes, bruising investment losses, and other wacky pension games will be taught in Illinois Pension Obligations II!"

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School::politics (0)

Anonymous Coward | about 2 years ago | (#42162601)

Is it really a good thing for Khan to be involved in politics?

Re:School::politics (3, Insightful)

Black Parrot (19622) | about 2 years ago | (#42162635)

Is it really a good thing for Khan to be involved in politics?

From the description, it sounds more like civics than politics.

Re:School::politics (5, Insightful)

Seumas (6865) | about 2 years ago | (#42162981)

The civics of, say, giving teachers in Portland a pension at 105% of the income they retired at, per year, with "PERS" that essentially bankrupted the education system?

There's a (not necessarily too) fine line between education and indoctrination.

Re:School::politics (4, Insightful)

peragrin (659227) | about 2 years ago | (#42163101)

It is even better when you consider the first thing cut at EVERY company in times of trouble is the pension funds.

What I don't understand is why we keep letting the people we work for control our medical and retirements.

If you are under 40 chances are your going to work for 6-10 different major companies in your life. You don't go down the street and work at the local factory for 50 years anymore.

We really need to pull the companies we work for out of those equations. it will be a nice break for them and it will be better for the rest of us.

Re:School::politics (1)

Runaway1956 (1322357) | about 2 years ago | (#42163141)

Uhhhh - I'm over fifty, and that working at a single factory for fifty years didn't happen. That was my FATHER's generation, not mine! Need I remind you that the steel industry was pretty much dismantled, and outsourced way back in the 1980's? Automotive industries followed suit soon after.

Re:School::politics (0)

Anonymous Coward | about 2 years ago | (#42162637)

I have to agree with you on this. Does Khan know the circumstances of every single person receiving a pension? I doubt it. You can't reasonably say that every worker sacrificed "other things". Taxpayers that are struggling to feed their families and find jobs for themselves and maintain their workforces shouldn't have to pay for cushy retirements.

Re:School::politics (4, Informative)

AK Marc (707885) | about 2 years ago | (#42162727)

Taxpayers that are struggling to feed their families and find jobs for themselves and maintain their workforces shouldn't have to pay for cushy retirements.

Then they should have voted for politicians better at negotiating contracts, and got what they deserved. The taxpayers are only paying for what was promised by their elected representatives. If there's a problem, the taxpayers need to reexamine their choices for representation.

Re:School::politics (5, Insightful)

Billly Gates (198444) | about 2 years ago | (#42162849)

Taxpayers that are struggling to feed their families and find jobs for themselves and maintain their workforces shouldn't have to pay for cushy retirements.

Then they should have voted for politicians better at negotiating contracts, and got what they deserved. The taxpayers are only paying for what was promised by their elected representatives. If there's a problem, the taxpayers need to reexamine their choices for representation.

Also expect to pay me a shitload more money if you take away my pensions. As a teacher I gave up jobs that would pay $60,000 a year for a job that pays $40,000 a year. Besides a change the only other reason why I would voluntarily do so is because of retirement being taken care of. If you bitch and whine how it is so unfair that I get that and you don't keep in mind your IT jobs pay A LOT MORE so you can afford to save more.

I will quit and go back into IT as well as many other teachers if you take our pensions away. That was the deal you made upon we agreed to work for less. Who in their right mind would sign up for $70,000 to $100,000 of debt to train for a job that pays $35,000 a year with no pension otherwise? You simply wont find any qualified teachers or any other public servants otherwise.

Re:School::politics (3, Insightful)

Anonymous Coward | about 2 years ago | (#42162919)

I immediately suggest that everybody takes you up on that offer. The public school teachers know what they and their education is truly are worth, that's why they send their kids to private schools disproportionately [hotair.com] (of-course given their public salaries, looks like they are in a much better position to be able to afford it.)

sig [slashdot.org]

Re:School::politics (0, Insightful)

Anonymous Coward | about 2 years ago | (#42163011)

Why does society owe you compensation for you choosing a shitty job? When I hear people say things like "I took XYZ job in the last twenty or thirty years and it pays terribly", I react to them the same way as people who are smokers or who have lung-cancer from smoking. Unless you're a hundred years old, you started that addiction (or shitty job) in a time when it was common knowledge just how bad it was.

Also, I didn't make a deal with anyone. As far as I'm concerned, let it all crumble. (And no, I didn't benefit from the public education system. I succeeded *despite* it -- including dropping out of the ninth grade after being given the same science text-books I'd already used in the fourth grade).

Re:School::politics (4, Interesting)

ATMAvatar (648864) | about 2 years ago | (#42163061)

You're quire obviously trolling, but I'll explain anyways. He didn't say he took a shitty job. He said he took a job whose compensation package traded immediate income for a stellar retirement package. It's no different than taking a slightly lower paying job anywhere else for alternate benefits (like free gym memberships, free snacks at work, extra vacation, flex time, etc.).

If the state doesn't want to foot the bill for the extra benefits, they will be stuck paying the increased income required to attract anyone decent. It's on the state that they chose not to bank the income difference to pay for the pensions. Quit making this out like the teachers are to blame.

Re:School::politics (4, Insightful)

Jiro (131519) | about 2 years ago | (#42163069)

Why does society owe you compensation for you choosing a shitty job?

Because you're retroactively making it shittier. The fact that there's a pension of a certain size was part of their pay--they received some of their pay in salary and some in pension benefits. Retroactively deciding that they don't get it the pension is no better than retroactively taking $25 out of their salary every month, except that since the salary is already in their pocket and the pension isn't it's a heck of a lot easier to take away the pension.

Re:School::politics (1)

Anonymous Coward | about 2 years ago | (#42163065)

Please go take one of these other mythical jobs. You and your contribution to society is worthless.

Re:School::politics (1)

Anonymous Coward | about 2 years ago | (#42163099)

There are a few teachers in my family and I can't help but get upset about this kind of thing. These plans were agreed on, done, and signed. And for many teachers the time has already been served. A teacher can't go back 30 years to choose a different job, but politicians can effectively go back in time and screw you over. That's just wrong.

This is all made worse by the fact that Cook County (mainly Chicago) has always been horribly corrupt and has terrible financial problems.

Dear Sucker (0)

Anonymous Coward | about 2 years ago | (#42163133)

Screw you. -- signed: Everyone

Re:School::politics (2, Insightful)

mc6809e (214243) | about 2 years ago | (#42162975)

Then they should have voted for politicians better at negotiating contracts, and got what they deserved. The taxpayers are only paying for what was promised by their elected representatives. If there's a problem, the taxpayers need to reexamine their choices for representation.

You'd have a point if only taxpayers were allowed to vote.

In practice, those that collect tax money from tax payers vote for their own representatives that promise to make taxpayers give them more money.

Taxpayers can vote for better politicians and lose. And they can "reexamine their choices" every two years and still lose. The other side isn't interested in giving taxpayers a better deal. They're interested in maximizing how much money they can take from taxpayers.

Re:School::politics (0)

Anonymous Coward | about 2 years ago | (#42162983)

Except that in my province (Ontario) the unions tip elections in favour of parties that won't stand up to union demands of above-market pay and ever-fatter benefits. So even those people who see the problem don't get what they deserve, they get shafted. This is a case of rent seeking that's so strong it sinks everyone.

Re:School::politics (1)

akboss (823334) | about 2 years ago | (#42163073)

If your in Alaska you should know that the state government rolls over when it comes to contract negotiations. I know when I was working in the Alaska Dept. of Corrections, every time we asked for something we got it almost no questions asked.

Re:School::politics (4, Interesting)

spune (715782) | about 2 years ago | (#42162861)

These state workers paid into their pension accounts over the course of their careers; they have reduced their lifetime earnings by dozens of thousands of dollars to fund their pensions. The state is responsible for providing matching funds for their pensions, but only rarely has actually paid up fully. Teachers and social workers are funding their own "cushy" retirements. Or at least they're trying to, but their funds keep getting stolen by lawmakers.

Re:School::politics (0)

Anonymous Coward | about 2 years ago | (#42162913)

Actually, it is the unions that based pension contribution rates on absurdly high assumptions about investment earnings in order to maximize their short-term paycheck amounts and dues collections. They were banking on the fact that they would be considered "too big to fail" years down the road when the whole scheme blew up. Public employees draw far, far more out of their pensions than the interest-accumulated value of the contributions and employer contributions. They self-funded their retirement in the same way that someone who pays $10,000 into social security taxes during their working years and then collects $200,000 worth of social security over the rest of their lifetime.

Re:School::politics (1)

spune (715782) | about 2 years ago | (#42163057)

State and union negotiators based pension contributions on contemporaneously typical assumptions about investments, calculated to provide retirees an optimum income while not hurting paychecks too bad. There was no conspiracy regarding 'too big too fail', a recent invention of private banking. They self-funded their retirement in the same way as someone who pays $10,000 into SS taxes while working then collects $13,600 over the rest of their lifetime. Are you just pulling number out of your ass?

Re:School::politics (4, Informative)

Dahamma (304068) | about 2 years ago | (#42162883)

Except that a big part of this retirement INCLUDES payments and contracts made instead of social security. These employees don't get SS, these ARE their retirement payments.

These pensions were part of their *compensation package* by contract when they were hired, and just because the state of IL didn't set the money aside like they were supposed to, it doesn't mean they aren't obligated to honor the contracts. It would be no different from the Federal government saying "ok, we don't have enough money for social security even though you paid into it for 40 years, so too bad".

 

Re:School::politics (1)

MightyYar (622222) | about 2 years ago | (#42163013)

I think we should honor existing contracts, but public pensions should be abolished going forward. They are immoral:
1. You are putting future generations on the hook for current spending. Not fair to the taxpayers.
2. History shows that, if they can get away with it, politicians will underfund the pensions. Not fair to the employees.

Regarding #1, I can actually buy the justification that future generations benefit from the spending as well... but mostly for things like infrastructure. Most government employees are involved with the here and now, so I don't think this logic applies to most public pensions. Education seems like an obvious gray area, though I presume that future generations are also going to be educating their kids so I'm not sure that we should be asking them to pay for their own as well. I am very strongly against taking on debt to meet payroll, and that is what we are doing.

Re:School::politics (1)

Seumas (6865) | about 2 years ago | (#42163019)

*shrug*

I probably won't get my SS, either. It'll end up being a nice little extra $350k (not counting interest and investment over the years) to the government and, then, to someone else. Only difference is I actually had to pay into it.

Re:School::politics (1)

ducomputergeek (595742) | about 2 years ago | (#42163169)

If things keep going that's exactly what is going to happen at the federal level. We're going to to wake up one day and congress is probably going to say, "Well no more money, too bad. You all are SOL. We sold you a bill of goods all those years ago. I mean it sounded so good back in the 1930's when most people were dead by age 65."

I mean when the government fails to honor it's contracts whom do you turn to? What recourse do you really have?

Can you add a few more links? (1)

zill (1690130) | about 2 years ago | (#42162621)

Jesus H. Christ, not even Wikipedia has a link-to-word ratio this high.

Political Editing (1)

Anonymous Coward | about 2 years ago | (#42162755)

This is a severe case of political editing, Note that the video is cut off to the "relevant" part.

Khan doesn't make suggestions, he just presents facts. The closest he comes to being "political" is claiming that the good benefits for retirees is due to them taking smaller pay, etc. That is notably without statistics, but he does say that the people agreed to such benefits when they were hired and thus why they are liabilities, both in the fiscal sense and now, since they worked expecting it, in the sense of the word.

In any case, he doesn't champion certain new cuts or taxes; the majority of the video is informative, not argumentative--actually, none of it is.

Captcha:defraud.

Re:Can you add a few more links? (1)

Hentes (2461350) | about 2 years ago | (#42162847)

Welcome to the Web, a medium based on hyperlinks [wikipedia.org] !

Re:Can you add a few more links? (2)

EvilSS (557649) | about 2 years ago | (#42162935)

Welcome [reference.com] to [reference.com] the web [wikipedia.org] , [wikipedia.org] a [reference.com] medium [reference.com] based [reference.com] on [reference.com] hyperlinks [wikipedia.org]

Fixed [cheezburger.com] ! [wikipedia.org]

Re:Can you add a few more links? (1)

EvilSS (557649) | about 2 years ago | (#42162951)

Crap, missed one!

because everything on the internet is true? (1)

alen (225700) | about 2 years ago | (#42162625)

if you think that everyone will believe everything they see on the internet i have a bridge in brooklyn to sell you

Re:because everything on the internet is true? (0)

Anonymous Coward | about 2 years ago | (#42162655)

Ahhhhhhhhhhh! That was a good dump. Ah, damn! I just noticed that your hopes and dreams were in the very same silverware drawer that I dumped my disgusting bodily poison into! Your hopes and dreams are... dare I say... dumped on sallies!

Re:because everything on the internet is true? (1)

noobermin (1950642) | about 2 years ago | (#42162925)

lmfao

Re:because everything on the internet is true? (0)

Anonymous Coward | about 2 years ago | (#42162663)

Do you accept pay, pal?

He SHould Probably.... (-1)

Anonymous Coward | about 2 years ago | (#42162651)

who he speculates 'probably took lower compensation while they were working,' 'probably stayed in the jobs longer,' and 'probably sacrificed other things'

He should probably get the facts before making such assumptions.

I'm also one of the naysayers that thinks Kahn is an ineffective flash in the pan.

Cool (1, Insightful)

geek (5680) | about 2 years ago | (#42162657)

So now that Khan Academy has gone political (I guess it always somewhat was but is now overtly political) I can scratch it off my list for good.

Seriously, I would like one fucking place to go that doesn't involve fucking politicians telling me what to fucking do. Just ONE place.

If Khan would like to go over these issues, do it in a political science course, do it in a history course but do it in the past tense as a learning resource. Don't sell the fuck out to political parties and destroy your credibility.

Re:Cool (1)

AK Marc (707885) | about 2 years ago | (#42162747)

Go to Somalia, the politicians won't tell you what to do.

Re:Cool (2, Interesting)

roman_mir (125474) | about 2 years ago | (#42162797)

Do you know that Somalians fought against these exact policies by their former communist government? Do you know that people came to USA to escape their own tyrannical governments in the past? Actually if the things keep going the way they are going now, it will make perfect sense to move out of USA and actually go to Somalia.

The way things are going, USA just may have to undergo a similar armed conflict that Somali has gone through 20 years back when it ousted its Communist regime. Sure, the country is poor now, but it actually has a stable enough currency and parts of it see quick technological progress. They have nearly perfected the system of private liability insurance, private court system, property rights, they are working out a system that at least corresponds to their technological prowess.

However here is a thought: people came to USA running away from their own former tyrannies, just maybe some of them decide that this time there is no Terra Nova to run to (though many will skip to various regions in Asia, Australia, South America, Africa maybe), but there is definitely enough both: space in USA and likeminded, freedom seeking people, who very likely will want at least part of their country back. While you say: go back to Somalia, I expect some of them will say: you should go back to Somalia prior to the conflict that ended its communist regime.

I think it just may happen in our lifetimes (unless Barry decides to drop a missile from a drone on some of our heads), that USA will be split at least once, and I can imagine a southern State or two, that may like that idea and will be willing to try it out.

Go. No one is stopping you. Just fucking go. (0)

Anonymous Coward | about 2 years ago | (#42162997)

What you fucking former-soviet block knuckleheads can't seem to get through your pre-educated skulls is that living in the United States is a voluntary arrangement. Unlike the former Soviet Union (In Soviet Russia government is leaving you!), current China, Saudi Arabia (at least for women) and so many other totalitarian regimes

We have more people, many more, who want to come here (the west) than those who keep posting their empty promises to wah. wah, wah, take their toys (earned with the backing of the blood and treasure of US citizens) and go somewhere where, snif, their crazy ideas will be appreciated.

Just go. Just fucking shut up and go.

ironic captcha: appeases

Re:Cool (0)

Anonymous Coward | about 2 years ago | (#42162823)

The ones that aren't a member of:

ACP AfDB AFESD AL AMF CAEU ECA FAO G-77 IBRD ICAO ICRM IDA IDB IFAD IFC IFRCS IGAD ILO IMF IMO Intelsat Interpol IOC IOM (observer) ITU NAM OAU OIC UN UNCTAD UNESCO UNHCR UNIDO UPU WFTU WHO WIPO WMO WTrO (observer)

Right?

http://en.wikipedia.org/wiki/Politics_of_Somalia

Somalia has deep and heavy politics, don't kid yourself.

Re:Cool (0)

Anonymous Coward | about 2 years ago | (#42163051)

Hey, come on, what are the liberal cool kids gonna do if you take away their special automatic Win-Any-Argument-Against-Big-Government* Card with your stupid facts?

* The WAAA-BigGovernment Card has not been shown to actually win any arguments. Not valid in most discussion boards. Check your local echo chamber for details.

Re:Cool (3, Funny)

Black Parrot (19622) | about 2 years ago | (#42162877)

Go to Somalia, the politicians won't tell you what to do.

But - but - but - If I move to Somalia, no one will protect me from the warlords or fix the potholes in my street.

You see, I'm not anti-government - I love all the things government provides. I'm just anti-responsibility. [wikipedia.org]

Re:Cool (1)

Seumas (6865) | about 2 years ago | (#42163041)

You mean, anti-irresponsible spending.

Re:Cool (2)

Jiro (131519) | about 2 years ago | (#42163089)

Somalia doesn't have a government that controls the whole territory, but it does have government. "Warlord" is just another term for "dictatorial government that isn't a member of the United Nations".

Re:Cool (0)

Anonymous Coward | about 2 years ago | (#42163005)

They are called warlords over they and they most certainly tell you what to do. Only an idiot would think Somalia is a paradise of liberty.

Re:Cool (1)

Black Parrot (19622) | about 2 years ago | (#42162787)

Don't sell the fuck out to political parties and destroy your credibility.

Sometimes saying nothing sells out to a political party and/or destroys your credibility.

Re:Cool (0)

Anonymous Coward | about 2 years ago | (#42162803)

You live in a society. In society there are other people. You need to interact with other people.

Look at this case, this isn't just some bullshit spew from politicians. This is an actual problem.

Re:Cool (0)

Seumas (6865) | about 2 years ago | (#42163047)

Agreed. Whining teachers who got into a shitty career when it was shitty and spend the majority of their career telling everyone about how shitty their career is -- is an actual problem.

Re:Cool (0)

Anonymous Coward | about 2 years ago | (#42162807)

You could, you know, watch the video before passing judgement. He isn't political, he just presents facts. That it is a liability isn't a political issue, unless you believe it is okay for an employer not to pay it's workers what it has promised to.

With regards to a bigger issue, scratching sources of information "off your list" is not very keen. It leads to the filter bubbles [ted.com] that lead to, you know, believing that the majority of the USA supports your opinions and you'll win elections easily, for example.

If hiding information from your eyes is the only way to maintain your worldview, said worldview might have issues.

Re:Cool (0)

Anonymous Coward | about 2 years ago | (#42162865)

"unless you believe it is okay for an employer not to pay it's workers what it has promised to."

So if politicians promise government workers excellent benefits in exchange for their votes, voters should be stuck with bill forever? Just because the politicians wanted to get elected?

Re:Cool (0)

Anonymous Coward | about 2 years ago | (#42162879)

It is a course in civics. Current events are part of any curriculum in a social studies course. Even a history course will relate historical events to current ones. Maybe you should go be uneducated in some other country or just die and make everyone happy.

Re:Cool (1)

Seumas (6865) | about 2 years ago | (#42163029)

Could be worse. They could be peddling religion.

But, yeah, while I initially admire the basis of Khan Academy, there's an awful lot of hype and bullshit surrounding it that puts me off.

Ooh, this is grand! (3, Interesting)

roman_mir (125474) | about 2 years ago | (#42162675)

Enlist an educational facility (regardless of what type it is) to run your re-education campaign.

Listen, whether you are for the public education or against it or have no opinion on it one way or another, you have to admit that this type of action by the Governor is questionable at the least.

Personally I advice everybody to take a step back and ask themselves this question: did I promise anything to anybody? Did I promise to be a tax slave in a system that was set up without any of my participation? Did I vote back then when Teddy Roosevelt and FDR and Hoover and Nixon and Carter and everybody in between, all the rest of the socialists were pushing for their agenda?

OK, so if YOU voted for it, you may feel some form of obligation to pay for it. However tens to hundreds of millions of unsuspected individuals were born and died and were born again in a system that fleeced them dry, prevented the economy from working with these exact types of policies.

You should be opposed to any of this on the general principle alone, never mind the fact that you have no money to do any of it.

The unfunded liabilities to all the pensioners in the system, the SS and Medicare and then State liabilities, they are running around 222 Trillion dollars in USA (that's not the 16 Trillion public debt, it's something else, and it's not the contingency liabilities, most or all of which will hit once the real fiscal grand canyon takes place).

No no no, do not let yourself to be re-educated this way. You can think whatever you want, but you didn't sign for it unless of-course you were the one voting for any politician who promised it.

The people who voted for Barry Goldwater DID NOT SIGN UP FOR IT. The people who voted for Ron Paul and Gary Johnson DID NOT SIGN UP FOR IT.

In fact even the people who voted for Reagan didn't sign up for any of it, though he still ended up fleecing them.

Don't fall for it, in fact consider your options of moving OUT OF ILLINOIS very very carefully, because the taxes will be going up and the economy of that state will be collapsing all on its own, never mind the union.

Re:Ooh, this is grand! (0)

tulcod (1056476) | about 2 years ago | (#42162837)

You could also just move to a proper country, like one in Europe. At least the countries stand up for eachother, there's decent education (both secondary and tertiary) and a serious healthcare system.

Re:Ooh, this is grand! (1, Interesting)

udachny (2454394) | about 2 years ago | (#42162895)

At least the countries stand up for eachother,

- yeah, what you mean by that is that Germany pays for the food while various Southern States live off of other people's charity (credit).

How is Greece doing, by the way? I am in Germany right now, I know people who go there on vacations, apparently on the islands they are not treated as 'nazis' the way that Merkel was greeted back in October this year [dailymail.co.uk] . You know, a leader of a country that actually gives out cash to the socialists.

--

And as to your assertion that European countries are the 'proper' ones, it's funny. It's funny because of how many Americans ran away from those proper countries for freedom. Not for free education, free social assistance (welfare) or free food.

No, for individual freedom of being able to live and not be harassed by their tyrannical governments.

Re:Ooh, this is grand! (0)

Anonymous Coward | about 2 years ago | (#42163081)

there's decent education

Meh... there's still a huge problem with rote memorization being valued over true understanding of the material.

Commissioned studies are always doubtful (2)

PhamNguyen (2695929) | about 2 years ago | (#42162699)

Even though I agree with Khan and the Illinois governor that state pension plans are promises that shouldn't be broken (unless the state goes bankrupt and gets bailed out), I don't like the idea of paying someone to give an opinion or educational video. In such a case it will always be doubtful what the real opinion of the paid presenter is.

Not sure about Illinois (5, Interesting)

phantomfive (622387) | about 2 years ago | (#42162703)

I'm not sure about Illinois, but in California, the problem isn't current pension payouts. The problem is the payouts we've promised to future retirees are sorely underfunded. In the late 90s the state legislature made the calculation that the stock market would keep going up and up, and expected that the DOW would be around 30,000 right now. Add to the problem that CALPERS hasn't made the best investments, and California has a $500billion unfunded liability. [latimes.com]

Note that if any CEO of a company managed retirement funds like the state legislature does, he/she would be in jail. I don't know if Illinois has a similar problem, but I do know enough about politicians to think Governor Quinn is not telling the whole truth.

Re:Not sure about Illinois (0)

Anonymous Coward | about 2 years ago | (#42162763)

Similar problem here in Pennsylvania. Governor Ridge raised pensions in '98 in the middle of the dot com bubble. Governor Rendell then made the problem worse by freezing state and local pension contributions in 2004. The bill is now due and the budget is fucked.

Re:Not sure about Illinois (0)

Anonymous Coward | about 2 years ago | (#42162875)

I'm not sure about Illinois, but in California, the problem isn't current pension payouts. The problem is the payouts we've promised to future retirees are sorely underfunded. In the late 90s the state legislature made the calculation that the stock market would keep going up and up, and expected that the DOW would be around 30,000 right now. Add to the problem that CALPERS hasn't made the best investments, and California has a $500billion unfunded liability. [latimes.com]

Note that if any CEO of a company managed retirement funds like the state legislature does, he/she would be [CEO of a Fortune 500 corporation].

FTFY. It goes back to the 1980's and is coming home to roost now.
1. http://online.wsj.com/article/SB10001424052970204138204576605482876191482.html [wsj.com]
2. http://finance.yahoo.com/blogs/daily-ticker/retirement-heist-u-pensions-plundered-corporate-greed-author-131151510.html [yahoo.com]
3. http://online.wsj.com/article/SB92939825896784903.html [wsj.com]

And much of it was due to an FASB accounting rule change that those same corporations initially resisted. Excellent quote that sums it up: "For years, people saw the pension as this bucket of money you can't touch ... Companies are looking to not leave the asset dormant, but use it to deliver better returns for the company."

The California state legislature wasn't doing anything new they were simply following the well-beaten path blazed by major corporations.

Re:Not sure about Illinois (4, Insightful)

AK Marc (707885) | about 2 years ago | (#42162885)

Note that if any CEO of a company managed retirement funds like the state legislature does, he/she would be in jail.

I know it's en vogue to bash the government without actually doing anything constructive, but when you do so with obviously false statements, it doesn't help your case. GM managed their retirement funds the same way. Which GM CEO is in jail? How's that working out for us?

And personally, I dislike the lie of "unfunded". They funded them. They just did so at an optimistic growth rate, that couldn't be sustained. From your link, "In California's case, past pension underfunding means reduced funding of current programs. " Note, after you get past the lies in the headlines and lies in the first few paragraphs to piss people off and get them hooked into the subject, the more true statements come out. The underfunding is close to 100 years old. It's been done by every politician by every party (even Libertarian) for so long nobody can remember any other way. The people knew about it, or are so dumb they couldn't vote anyway. I know as an elementary school student in the 1970s, I was aware (the year was 1979, and it was brought up as part of the politics around attacking Carter to set up for the 1980 elections). If a 5th grader had it figured out 30+ years ago, why is it all a big surprise now? The problem existed in 2000, but the economy was going good enough that nobody cared. But 10 years and a few wars later, and the economy is ill, and now it's an issue? You know why? Because the first person to blink gets all the blame. Both parties covered it up as long as possible, hoping it blew up when the other party was in power. Neither party tried to fix it, the only difference is that when it blows up under a Republican administration, they blame the unions, even if there aren't any unions.

Re:Not sure about Illinois (1)

ganjadude (952775) | about 2 years ago | (#42163097)

if spending ONLY 1 trillion instead of 1.3 trillion more than we take in is considered a "spending cut" than unfunded is a fair term

Re:Not sure about Illinois (3, Insightful)

Anonymous Coward | about 2 years ago | (#42163113)

Actually at most recent count, the California unfunded liability problem is $884B, and headed upwards, and that is *just* the state employees - cities have similar or worse issues. San Francisco's pension gap is $4.4B, or put another way the taxpayers are on the hook $35,000 per household. The key problem being that the negotiated pension packages assume an 8-12% return on investment in CALPERS/SFERS/etc. No one can live up to that return consistently.

So now the question is how to handle it. Should the taxpayer cover the gap -- legally they're on the hook. Which is all fine, til we hit a bump like the financial crisis, which starts raising questions about those expected returns and the associated pension games some bad apples have been pursuing (spiking, taking pensions while working other gigs, etc). I don't see how anyone can expect households to fork over an additional $40k and not start throwing public workers and their unions under the bus.

Re:Not sure about Illinois (0)

Daniel Dvorkin (106857) | about 2 years ago | (#42163159)

Note that if any CEO of a company managed retirement funds like the state legislature does, he/she would be in jail.

Your planet sounds like a nice place to live.

Dear Governor Quinn... (0)

Anonymous Coward | about 2 years ago | (#42162711)

In addition to "Squeezy the Pension Python" you can star as "Fuckyou the Pus-bag Politician" because, let's face it, you sociopaths just won't learn when to stop squeezing us to further your slimy careers.

taxpayer re-education (0)

Anonymous Coward | about 2 years ago | (#42162713)

How about politician re-education? Starting with staying within a budget?
Also the taxpayers made no such promises. The politicians promised money belonging to others (taxpayers) with no say from the taxpayer (deals made between public employee unions and politicians). Since the politicians made the promises, then they can pay with THEIR OWN MONEY. A reasonable pension is one thing but there is much abuse in the system and I dont support the current system.

Re:taxpayer re-education (3, Informative)

Dahamma (304068) | about 2 years ago | (#42162933)

These pensions, like Social Security, were supposed to be funded by the employees themselves and their employer. The employees paid their part of the pension "payroll tax", but the state didn't (and probably spent a lot of the employee contributions).

It's no different from you expecting SS payments when you retire, since you *paid* for them over your working career.

That said the government clearly screwed up, they should have raised taxes and cut spending earlier, so it wasn't such a disaster by now. It's a shitty situation for the taxpayer, but not unexpected if you were paying attention for the last 20 years...

Public vs. Private? (2, Insightful)

Anonymous Coward | about 2 years ago | (#42162733)

he speculates 'probably took lower compensation while they were working,'

A long time ago this was true. Public employees accepted lower salaries in exchange for job security, great benefits, and more holidays. But here in the wonderful 21st century, they kept all their bonuses AND get paid more.

When the economy is good, both public and private salaries rise. But when it's bad, the private sector has layoffs and wage freezes. But the government is working with your money, not their own, and has no problem voting themselves raises.

http://usatoday30.usatoday.com/money/economy/income/2010-08-10-1Afedpay10_ST_N.htm

Re:Public vs. Private? (5, Informative)

Trepidity (597) | about 2 years ago | (#42162785)

It's still true in many government jobs. I know some people doing government IT work, and they get paid a lot less than they could make in the private sector. They do it for a mixture of the benefits, and because they're big-data advocates who have sort of an ideological commitment to getting more government data online, so enjoy their jobs. Professors at state universities also have lower average pay than at private universities.

Re:Public vs. Private? (1)

spune (715782) | about 2 years ago | (#42162903)

"Public employees accepted lower salaries in exchange for job security, great benefits, and more holidays. But here in the wonderful 21st century, they kept all their bonuses AND get paid more." If ever public sector workers are paid more for similar work than a private employee, it's because the private employee's boss has by now crushed his pay and benefits to increase company profits. The now grumpy private employee comes to believe either that he has some god-given right to be paid more than a state worker, or that all workers everywhere must suffer the way he does.

Re:Public vs. Private? (1)

HornWumpus (783565) | about 2 years ago | (#42163045)

You're point is empty without mentioning bankrupt cities and states.

Just like private employees, you picked a wagon, now you're stuck with it.

Re:Public vs. Private? (1)

Trep (366) | about 2 years ago | (#42163077)

The fact that government jobs are more immune to recession is almost certainly true; and more immune to shocks is a good thing, not bad.

As far as pay competitiveness, that article doesn't show anything but average salaries. It doesn't control for the types of jobs. The quote in the article says it:
"Public employee unions say the compensation gap reflects the increasingly high level of skill and education required for most federal jobs and the government contracting out lower-paid jobs to the private sector in recent years."
" 'The data are not useful for a direct public-private pay comparison,' says Colleen Kelley, president of the National Treasury Employees Union."

Average salary for Google employees is probably a lot higher than average salary for Wal-mart. It doesn't mean that google pays more than the market rate. They hire for different positions.

If new hires are promised ANY additional benefit, that will affect their decision to take the job on the margin, relative to other jobs. The employer offering the benefit will, all else equal, be able to hire the same employees for a lower salary. Unless there is some other factor at work here distorting market forces.

Very few government employees can vote themselves raises. Like, 535. The rest are hired by a manager, who was hired by a manager, who, eventually, was appointed by the president or congress.

If the government is really paying greater than market rates and not getting above average employees for those positions, then government agencies need to look at their hiring practices; but let's not get carried away.

It amazes me how many people on /. think it's cool to just drop pensions which employees have been paying into, and promised return on, for a long time. This is a commitment made by the employer, the same as any corporate pension program, and it should be paid at least until the state of Illinois declares bankruptcy.

Re:Public vs. Private? (1)

stephanruby (542433) | about 2 years ago | (#42163201)

http://usatoday30.usatoday.com/money/economy/income/2010-08-10-1Afedpay10_ST_N.htm

It's a well-known fact that Federal employees get paid much more than State employees.

Here we're talking about State employees, not Federal employees.

Perhaps if politicians hadn't made bad promises (3, Insightful)

Attila Dimedici (1036002) | about 2 years ago | (#42162771)

Perhaps if politicians hadn't made promises they should have known the public wouldn't support in the name of self-same public while pocketing campaign contributions from those who benefited the most from those promise, the public would not be desiring to repudiate those promises now that they are finding out exactly what the politicians promised.

It's gov't for the gov't by the gov't (0)

Anonymous Coward | about 2 years ago | (#42163031)

And the people be damned.

That's what happens when you get public employee unions with forced membership funneling dues back to bribes, errr, political contributions. It wouldn't surprise me if the single entity contributing the most money to political campaigns is forced-membership public-employee unions.

Thus we get unaffordable benefits to unionized government employees. And the non-government employee taxpayers get royally screwed.

Do some research one what progressives like FDR thought of allowing government employees to unionize.

Bankrupt system (0)

Anonymous Coward | about 2 years ago | (#42162773)

Meh, why haven't pensions obligations been set aside?? This is the reason public pensions are fail. Instead of saving up for retirement, they kick the can down to their ascendants.

Another false Slashdot summary (0)

Anonymous Coward | about 2 years ago | (#42162815)

Since this is Slashdot, of course the description is inaccurate. The videos explain how pensions work and why Illinois faces such a problem but the video is not explicitly polemic as the summary maintains.

This rhetoric will change (1)

wakeboarder (2695839) | about 2 years ago | (#42162827)

When Illinois goes completely broke and the taxpayers refuse to pay the burden, we'll see if all this crap in their system doesn't get cleaned out. But we don't have to worry about that today, that is somebody else's problem.

Re:This rhetoric will change (1)

bogaboga (793279) | about 2 years ago | (#42162979)

When Illinois goes completely broke and the taxpayers refuse to pay the burden, we'll see if all this crap in their system doesn't get cleaned out.

This is exactly what the Greeks thought they didn't have to face. This was about two decades ago.

But we don't have to worry about that today, that is somebody else's problem.

Needless to say, they now have to "face the music" or call it their problem , and have a taste of what the real world is like.

They aren't merry making now, are they?

Pension solution (1)

Anonymous Coward | about 2 years ago | (#42162829)

There is a simple and minimaly painful solution to underfunded and overpromised pensions in an environment of state budgets that are negative and not looking good soon. We just went through a period of deflation as evidenced by dropping home values. Public pensions and wages did not have that, but rather pay increases over that period. Despite the known fact they are by far the largest factor in ALL local, county, and state government insolvency. ALL. Nationwide.

The solution is a one time -10% COLA on public employee salaries and pensions, yes pensions, kicking in 1/3 a year for 3 years. That will lower the "base" on which future salaries and pensions are calculated and will make a HUGE tail wags the dog impact on governmental solvency.

I would further suggest FUNDING public and private pensions with special FED bonds at 1% for 50 years. The proceeds can be managed by the pension funds themselves to achieve the typical 5% returns they see now.

Real people and businesses with cash money can also do that right now. irvineeconometrics.com
If you care enough, you will type it in not merely click on it. $100k+.

The solution has been posted to an obscure internet site, thread and post.

JJ

The problem isn't the pension benefits (4, Informative)

taz346 (2715665) | about 2 years ago | (#42162839)

The problem with Illinois pensions isn't the level of benefits. It's that the legislature has been underfunding the pensions for more than 20 years. Legislators and governors have kept tax rates low and spent most of the tax revenues on the general budget, always promising to catch up on pension contributions "next year." As a result, the state's retirement system is now only 36 percent funded. Decent pension fund management would keep it around 80 percent funded. In addition, the legislature gave the state all the responsibility for making pension payments for all local school districts in Illinois except the city of Chicago, letting those places keep property taxes lower rather than taking some responsibility for the pensions they negotiate.

Re:The problem isn't the pension benefits (0)

Anonymous Coward | about 2 years ago | (#42162923)

And why should we feel differently about this than we feel when corporations, as opposed to unions, negotiate sweetheart deals with the recipients of their campaign "donations" knowing full well that it is going to blow up at taxpayer expense down the road?

And if they promise the impossible? (2)

kdataman (1687444) | about 2 years ago | (#42162853)

And if unions convince a corrupt or incompetent legislature to make impossible promises? A corporation that did that would just go bankrupt and start over and the promise would have to be adjusted. This does happen. I think states have to have a similar option.

The Public Sector Needs to Stop (3, Informative)

Anonymous Coward | about 2 years ago | (#42162869)

goes on to argue that 'in all fairness, this was promised to these people,' who he speculates 'probably took lower compensation while they were working,' 'probably stayed in the jobs longer,' and 'probably sacrificed other things' to get these 'great benefits.'

These exact same things happen in the private sector and you know what we do? We either put up with it or we move on to another job.

I'm so fucking tired of the public sector employees whining about their benefits dwindling while ALL sectors face the same problem.

Just so you know, I have THE WORST possible insurance provided by Blue Cross Blue Shield of MN. I was already paying $500/month for the pleasure. Next year it goes up to $845/month. Am I whining? No, I'm looking for a new job.

Re:The Public Sector Needs to Stop (4, Insightful)

spune (715782) | about 2 years ago | (#42162947)

Private employees shirk unionization, then experience pay and benefit cuts, and somehow believe that this is just how the world SHOULD work. Having failed to defend their livelihoods when they had the chance, they become so bitter they demand that no one have decent wages or benefits.
Public workers have been vigilant in defending their standards of living; maybe you could learn something from them.

Re:The Public Sector Needs to Stop (0)

Anonymous Coward | about 2 years ago | (#42162989)

I agree, the Public Sector needs to stop. All Federal, State, and Municipal workers should stop being a drain upon society by not going to work. I am sure once all the police, firemen, military and their ilk are no longer sucking at the public teat everything will be much better.

Promises, promises... (5, Insightful)

mfwitten (1906728) | about 2 years ago | (#42162893)

'in all fairness, this was promised to these people,'

It's easy to promise money, especially when it's not your own money.

That is the nature of Government; it confiscates resources under threat of violence and then squanders them. Government is a bad company that won't go out of business because it can force you to pay for goods and services even if you don't want them or even if you know they won't be fulfilled.

Your Opinions are not equal to my Facts (0)

bussdriver (620565) | about 2 years ago | (#42163171)

Pension plans are SALARY! Benefits come out from the salary, DUH!! FACT.

Pension plans are a technique for employers to pay LESS salary: they offer a higher net salary than they actually pay. If it helps, think of how the lottery can offer twice the winnings by spreading it out over 30 years using a pension-like fund.

I do not use the fire dept. I gladly pay for it because I MAY need them. I complain about their waste of funds but I also realize that we have minimal fire coverage and any disaster would require outside assistance... So I do not advocate cutting their funding. I know why they hold onto funds when they get them and never want it to go down... I've seen how money is stolen from budgets to play shell games...

The LOUDEST government waste people are usually the biggest problem! This is why we continually elect morons who make things worse and campaign on the complaints about the messes THEY CREATE. Yes, this means the voters get proper representation...that represents them, the moronic public. I'm not being partisan, but in recent years it is quite obvious with one side taking it so extreme that even their supporters notice it but instead of thinking they get emotionally defensive.

In Layman's Terms... (1)

Revotron (1115029) | about 2 years ago | (#42162905)

"Commissioned Study" is politician-speak for "Take my opinion, find some numbers that agree with it, omit ones that don't, and release it as a third party so it looks like other people agree with me."

You don't hear about studies that go the other way (1)

bussdriver (620565) | about 2 years ago | (#42162959)

Commissioned Studies do not always take the side of the politicians that created them. Those politicians down play or bury studies they don't like; the ones that go their way are promoted. There are bad and good studies and you can find bad scientists to back creationism or smoking too. If their data is openly published one could investigate it... or if they have projections if those come out accurate (thinking of the recent election, where most the mainstream was dead wrong and none lost their jobs.)

A promise is a promise? (3, Insightful)

Freddybear (1805256) | about 2 years ago | (#42162911)

Why should politician's promises about pensions be any different than any of their other promises?

Re:A promise is a promise? (-1)

Anonymous Coward | about 2 years ago | (#42163033)

Because the Illinois State Constitution requires it.

Re:A promise is a promise? (0)

Anonymous Coward | about 2 years ago | (#42163223)

And to that end:

"I have altered the deal. Pray I do not alter it further." D. Vader, Bureaucrat

Deals with the Government should be expected to be broken. Ask the Cherokee and the Trail of Tears.

"we", kemosabe? (1)

larry bagina (561269) | about 2 years ago | (#42162917)

No, legislators promised them. Legislators elected with the help, support, and money of the government employee unions. What you call a "promise", I call a "crime".

Hrm (0)

Anonymous Coward | about 2 years ago | (#42162931)

By all means pay currently owed pensions out. However I see no reason why pension benefits cannot be cut for current or future workers, or work requirements extended.

Actually I see no reason why we shouldn't just buy out all accrued benefits for current government workers and eliminate pensions entirely. They can get a 401k and IRA like everyone else.

Re:Hrm (1)

HornWumpus (783565) | about 2 years ago | (#42163059)

Inflation vs. CPI spread is the long term plan. 'Fixes' SS and most pensions.

Bad move khan (1, Interesting)

EmperorOfCanada (1332175) | about 2 years ago | (#42162991)

I can think of all kinds of people with some silly opinion that want to call it educational but at some point it is propaganda. I could create a mathematically correct lesson on linear algebra that also disparages some group purely sticking to factual data.

At the same time there is factual data that some may want to hide because of embarrassment that has educational value. So the hard question is the motivation of the offense not the offended. People living in Quebec were offended when a magazine recently pointed out how corrupt their province is; yet the recent huge corruption scandal shows that it is really really corrupt relative to Canadian standards. So if I create an offensive math lesson it probably means that offensive propaganda was the goal and thus the lesson should be eliminated. If I create a lesson on topical Quebec politics which if done correctly will be embarrassing to Quebeckers it should stay.

So the intent of this union "Lesson" appears to be propaganda so regardless of any factual content it should be eliminated.

USSR (0)

Anonymous Coward | about 2 years ago | (#42163143)

You saw what happened when USSR made more promises than they could keep. We are so not immune. Only 25 years late.

health care should not be tied to jobs (1)

Joe_Dragon (2206452) | about 2 years ago | (#42163167)

health care should not be tied to jobs that is a big part of costs of employing people.

New union / Old Union (1)

EmperorOfCanada (1332175) | about 2 years ago | (#42163183)

If I were a member of a union I would want a new union with a new pension plan. Many of these pensions made massive promises in the past and now a bunch of boomers are, at least in theory, looking at pretty good pensions. Yet now that the time has come to pay out these pensions the real costs are coming due and they are looking both to the taxpayer and to the existing members to pay these old pensions while negotiating far lesser pensions with the new members. The new members pension fees are typically far higher while their eventual payouts are far lower.

The next problem comes from the baby boom itself. There is a huge bulge of retirees requesting their pensions but they are requesting pensions at the same time that there is a huge bulge of taxpayers retiring as well. Again typically these were higher paying jobs while the new typical taxpayer is getting crap with no pensions. These are not anti union rants, these are cold hard facts. More cold hard facts are that these same boomers are requiring more medical care and on top of all that are more likely to vote and there are a lot of them. So you are seeing more voting along the lines of free this or low cost that for the elderly such as free buses, or even seemingly innocuous things like lower speed limits (which hinder commerce). What you don't see are things like property taxes going up to pay for these services.

This union demanding that they get what they were promised does not need some anti union statement to attack it. The union even having to demand what they were promised is a sure sign of a much larger issue. A boomer cadre are going to relentlessly retire in droves every year for the next 20 years. They are going to both need more in the form of medical and geriatric care and demand more simply because they can. Yet the numbers of workers that they are demanding this from are growing smaller and smaller and through crappy minimum wage laws, higher costs of living, the difficulty of getting a mortgage on a first home, etc these fewer people have even less to give. At some point this is going to crack. It is no problem for a government assembly to vote on something impossible but regardless of how hard they wish they cannot make it possible. What they can do is wreck themselves trying to make the impossible possible. It quickly becomes the story of the Dutch boy and the dyke and soon the dutch boy runs out of fingers.

Another symptom that will be interesting to watch will be those locations with more young people and few boomers having past promises will certainly thrive while those places with the highest liabilities will either stagnate or take the bull by the horns and do something drastic such as let pensions go bankrupt. In Canada this would be Alberta. I don't know the official number but looking around I would say the average age is 40 or less. Plus Alberta does not go for the nanny type laws. Lots of families with kids. Looking around Nova Scotia I would say the average age is 70, few kids but lots of Nanny type laws such as skiing now requires a helmet. One part of Nova Scotia known as Cape Breton is particularly union friendly, is particularly aged, and is particularly poor. Taxes are high in NS and low in Alberta and this is a trend I don't see changing. What I do see coming is a point when the older parts of Canada start making impossible demands on Alberta and one day it says "NO". That is going to be an interesting day in Canadian history.
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