Article

2010-07-06 Fifth Column

leftist NY journalist/ed pushes a financial argument to leave Afghanistan

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Posted by 3dc 2010-07-06 10:05|| || Front Page|| [11138 views ] Top

#1 Wouldn't it make more sense to leave Detroit?

Posted by ed 2010-07-06 10:13|| 2010-07-06 10:13|| Front Page Top

#2 Ya, I agree if we ditch the military and stop spending on defence then all our problems would be solved! We could just send our savior Obama there and they will instantly love us and not want to destroy America. I feel so much better now.

Posted by 49 Pan 2010-07-06 10:41|| 2010-07-06 10:41|| Front Page Top

#3 Even if the US leaves Afghanistan, Afghanistan will not leave us, unfortunately.

Posted by Anguper Hupomosing9418 2010-07-06 11:25|| 2010-07-06 11:25|| Front Page Top

#4 I don't know about Afghanistan but it's certainly true that military spending in the US, as in Britain and the rest of Europe west of Belarus, is going to be cut back.

We're nearly broke, and we haven't even begun to fill the multi-trillion $$$$$$$$$$$$$$ hole in public pensions-- not just S.S. but all the state and local pension funds that are each billions underwater. If we're to retain our credit rating, Romney or whoever follows Barry will have no choice but to cut our defense budget.

Posted by lex 2010-07-06 12:00|| 2010-07-06 12:00|| Front Page Top

#5 Or we could cut the ridiculous pension promises by 50%

Posted by Hellfish 2010-07-06 12:56|| 2010-07-06 12:56|| Front Page Top

#6 Or we could cut the ridiculous pension promises by 50%

Perhaps I'm wrong but I believe that ERISA legislation forbids any alterations to contractual pension obligations. Much less 50% cuts.

Posted by lex 2010-07-06 13:28|| 2010-07-06 13:28|| Front Page Top

#7 Defense (and the military) is one of the prime responsibilities of the Federal Government.

Social Security, Medicaid, Public Pensions, Housing, Education, Labor, EPA, etc... are *not*.

Not that it matters - Protecting our borders is also a primary responsibility of the Feds.

Posted by CrazyFool 2010-07-06 13:38|| 2010-07-06 13:38|| Front Page Top

#8 The bulk of the budget is S.S. and medicare. No way on god's green earth that either of those will be cut significantly. Aside from defense, there are no other agencies that can produce anything more than chump change in terms of budget savings.

Posted by lex 2010-07-06 13:53|| 2010-07-06 13:53|| Front Page Top

#9 Well, hell, lex, let's start with that chump change: Education and HHS come immediately to mind for complete elimination, but there are plenty of others....

Posted by Barbara Skolaut 2010-07-06 14:05|| 2010-07-06 14:05|| Front Page Top

#10 "I believe that ERISA legislation forbids any alterations to contractual pension obligations. Much less 50% cuts"

Does ERISA apply to the gummint?

And if it does, why expect the present federal gummint to follow it? They ignore other laws.

Posted by Barbara Skolaut 2010-07-06 14:08|| 2010-07-06 14:08|| Front Page Top

#11 ERISA doesn't apply to the gummint. Basically, it sets standards for private pension plans.

(Odd, ain't it, that the gummint exempts itself from so many of these excellent laws it creates.)

Posted by Matt 2010-07-06 14:33|| 2010-07-06 14:33|| Front Page Top

#12 'Odd, ain't it, that the gummint exempts itself from so many of these excellent laws it creates."

Not odd, really. As far as the ~~Emperor's Ass-kissers~~ Congress is concerned, that's not a bug, that's a feature.

Posted by Barbara Skolaut 2010-07-06 14:46|| 2010-07-06 14:46|| Front Page Top

#13 'Odd, ain't it, that the gummint exempts itself from so many of these excellent laws it creates."

Apparently not, per this article in Barron's that notes that "the constitutions of nine states, including beleaguered California and Illinois, guarantee public-pension payments. And most other states have strong statutory or case-law protections for these obligations...."

Excerpt: The size of the legacy-pension hole is a matter of debate. The Pew report puts it at $452 billion. But the survey captured only about 85% of the universe and relied mostly on midyear 2008 numbers, missing much of the impact of the vicious bear market of 2008 and early 2009. That lopped about $1 trillion from public pension-fund asset values, driving down their total holdings to around $2.7 trillion.

Other observers think the eventual bill due on state pension funds will be multiples of the Pew number. Hedge-fund manager Orin Kramer, who is also chairman of the badly underfunded New Jersey retirement system, insists the gap is at least $2 trillion, if assets were recorded at market value and other pension-accounting practices common in Corporate America were adopted.

Finance professors Robert Novy-Marx at the University of Chicago and Joshua Rauh of Northwestern University asserted in a recent paper that the funding gap for state pension plans alone might exceed $3 trillion, in part because state funds are using an unrealistic long-term annual investment return of 8% to compute the present value of future payments to retirees, as is permitted in government standards for pension-fund accounting.... The academic pair, using modern portfolio theory, claim that state funds, as currently configured, have only a one-in-20 chance of meeting their obligations 15 years out.

MAKING THE STATE AND local pension problem all the more trying is that government entities can do little to wriggle out of their exposure, even if spending on essential services is threatened. The constitutions of nine states, including beleaguered California and Illinois, guarantee public-pension payments. And most other states have strong statutory or case-law protections for these obligations.

Posted by lex 2010-07-06 14:59|| 2010-07-06 14:59|| Front Page Top

#14 lex, agreed and a great point. My little joke referred to the fact that ERISA (among many others) does not apply to the feds. In a sense, the least regulated institution in the country is Congress.

Posted by Matt 2010-07-06 15:18|| 2010-07-06 15:18|| Front Page Top

#15 "~~In a sense,~~ the least regulated institution in the country is Congress."

FTFY, Matt.

As for states being stuck with out-of-control pensions because of their constitutions, have they considered changing their constitutions? I guess whether it would work would depend on whether more people are getting paid outrageous sums by the state or more people are going broke paying the taxes for those outrageous sums.

And yes, I'm aware that in most states, the legislature has to approve putting the constitutional amendment on the ballot.

Posted by Barbara Skolaut 2010-07-06 15:25|| 2010-07-06 15:25|| Front Page Top

#16 aha, got it, Matt. A little slow today, still trying to get back to work....

Posted by lex 2010-07-06 15:32|| 2010-07-06 15:32|| Front Page Top

#17 Aside from defense, there are no other agencies that can produce anything more than chump change in terms of budget savings.

I dunno about that. Seems we went from $300 billion to $1600 billion a year deficits in less than two years. I'm guessing there's at least $1300 billion we could cut without touching defense ...

Posted by Steve White 2010-07-06 16:20|| 2010-07-06 16:20|| Front Page Top

#18 There is an immoral way to lower the debt...
if the bondholders and their ancestors have accidents....

Posted by 3dc 2010-07-06 22:22|| 2010-07-06 22:22|| Front Page Top

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