Sorry re-quoting myself, but plis to bear only....
How 'civilized' democracies deal with the problems of rationing essentials - credit, healthcare and the like among a population with structurally over-high employment for a long time to come and insolvent pension+retirement commitments is yet to be seen. Early days yet to say where this is going. Needless to say, am watching with great interest (and more than a touch of anxiety as well).
well, one shot has been fired by NJ's terminator guv Chris Christie....the response to his proposals and actions will bear close watching to see which way the wind blows in yumrika.
Christie Will Propose New Jersey Pension Rollback (Bloomberg)
That's 'rollback' as in ROLLBACK. SO they're already directly reacing out to the rollback stage of the CRE - Cap-Rollbak-Eliminate formula, seems like.
New Jersey Governor Chris Christie will unveil legislation that aims to trim a $46 billion pension deficit by scaling back benefits and suspending cost-of-living increases, said a person familiar with details of the proposals.
The measures would roll back a 9 percent increase in pension benefits that was enacted through legislation in 2001, and suspend cost-of-living increases for at least three years, said the person, who declined to be identified because he isn’t authorized to speak ahead of Christie’s announcement next week.
Kevin Roberts, a spokesman for Christie, said the governor will propose pension measures “early next week” and declined to confirm details of the plan.
“It will be a plan to bring solvency to a system that is dangerously on the brink,” Roberts said today in an interview. Any changes Christie will outline are designed to “ensure the system is going to be there in the long-term for those employees that are already here,” Roberts said.
Legislators in 2001 changed the formula used to calculate pensions for new retirees by dividing the number of years worked by 55, rather than 60, which in effect resulted in a 9 percent benefit enhancement. Christie is seeking to reverse that legislation and return to at least 60 for current workers, the person said. Legislators previously rolled back the higher benefits for workers hired after May 22, according to state bond documents.
The compassionate state of Illinois has however, decided to stand by its (some say overgeneous) pension obligations.
Legislators feeling sting of Illinois' deadbeat ways
State Sen. Dave Luechtefeld was in session in Springfield earlier this year when he got a call from the secretary in his district office. She was calling from her cell phone because the district office phones, which are paid for by the state of Illinois, had been disconnected for nonpayment.
...
It's the same story at the district offices of Illinois' elected legislators across the state: Phone, utilities, garbage and rent payments months behind, prompting a monthly flurry of terse late notices and cutoff threats to offices with the state emblem on the doors.
Of course, in a state where teachers are getting laid off, hospitals are struggling and small businesses are failing because the state isn't paying its bills, the office budget plight of a relative handful of politicians isn't going to cause anyone to take to the streets.
...
Lawmakers have often complained that the annual allotment is too small, given the need for clerical workers, professional office space and other significant expenses. However, the current problem of deadbeat district offices isn't about the budgeted amount, but rather about the state's cash flow problems, which stem from a deficit that's roughly 50 percent the size of the state's entire regular operating budget.
"We have 220,000 vouchers sitting in our office waiting to be paid, because we don't have the money to pay them," said Alan Henry of the Illinois comptroller's office, which is responsible for cutting the checks. Those backlogged vouchers at the end of August totaled about $4.5 billion in late bills, which are paid as money becomes available to the state from taxes, fees and other sources.
And no prizes for guessing the biggest source of the drain on state revenues after the fall in tax collections due to the khanomic downturn - public retiree costs and benefits.
Now, don't get me wrong here. I'm not cheering the pension troubles in the TFTA emerged world. I'm all for every human being everywhere (yes, even in TSP) being able to live with dignity till his/her last breath. But what are the odds of that coming about, eh? So, time to watch how the cards stack - what compromises are hammered, what pulls and pressures and lobbying and horse trading are brought to bear.
. Drag that cash over to the local IRS office for the advance tax payments.
Every solution in keynesian economics comes down to cranking up the printing press so I can only conclude he means a devaluation of the currency against the yuan.