[MD] US democracy at work?

[Ian Glendinning]

I think we need to separate (at least) two issues here.

Two-house parliamentary processes, and tactics, used in mature
sophisticated democracies.

Public / private funding of services like pensions and healthcare (and
whether public employees get any advantage over private sector in
these arrangements).

I thought the original point was about the former, the practical
workings of a democracy, not the usual partisan claptrap of the
latter.
Ian

On Mon, Feb 28, 2011 at 1:06 AM, Dan Glover <daneglover at gmail.com> wrote:
> Hello everyone
>
> On Sun, Feb 27, 2011 at 3:04 PM, Horse <horse at darkstar.uk.net> wrote:
>> Hi All
>>
>> We have a similar problem in the UK to the ones mentioned here, in that the
>> cost of the public sector pensions and benefits have been increasing
>> enormously over the last few years.
>> I generally tend to have sympathy with those that are receiving these
>> benefits as that was part of the package that was agreed when contracts were
>> signed or agreed to. It's not their problem if, 40 years or so down the
>> line, the cupboards are bare.
>
> Hi Horse
>
> In a way I agree... it is not their fault that the costs have
> increased enormously. It is their problem, however, otherwise there
> wouldn't be such large demonstrations going on in Wisconsin at the
> moment. I think I read that it is the largest protests since the
> Vietnam war years. The costs are unsustainable though. So either
> everyone else is going to have to pay higher and higher taxes, or else
> the benefit packages are going to have to be amended to reflect the
> times.
>
>>Horse:
>> As a quick aside, I have no idea how it works on your side of the pond but
>> over here everyone pays into a general fund and is guaranteed a state
>> pension at a certain age - normally 65 - upon retiring. It's not that good
>> so the majority opt for an additional pension into which they pay so much
>> and the company they work for pays so much - that's pretty standard for most
>> companies. It's not a legal requirement but it is standard practice and part
>> of the majority of remunerative packages both public and private.
>
> Dan:
>
> Here, we have a general social security fund that all non-public
> employees and employers pay into, and which guarantees a minimal
> income upon retirement. The government is gradually raising the full
> retirement age. My father was able to retire at 65 and receive full
> benefits. I will have to work until I am 66 years and 8 months before
> I am able to receive full benefits. My children will probably have to
> work until 70.
>
> In addition, there are many programs which offer tax incentives to
> save for retirement, both for individuals and companies.
> Unfortunately, most employees fail to take full advantage of these
> programs. I remember the last "real" job I had offered what is known
> as a 401k program whereby my employer matched my own contribution 100%
> up to 5% of my income before taxes. Asking around, I was amazed to
> find that I was one of the few people actually taking full advantage.
> I mean, it was basically free money!
>
> I guess people tend to live for today, trusting that tomorrow will
> take care of itself. Maybe that's why we're having the problems we're
> facing now.
>
> Horse:
>> In the case of government workers you have a similar situation - workers pay
>> amount X every month and the employer (i.e. government, local or national)
>> pays amount Y every month and when you hit 65 you get various benefits.
>
> Dan:
> Here, not all public employees are covered by the general social
> security fund. The laws were modified in the 1990s to include public
> employees not covered by public pensions. Here in Illinois (and in
> Wisconsin as well), the government (re: taxpayers) funds the
> retirement pensions of public employees entirely. The Wisconsin
> governor is proposing changes that will result in state employees
> paying a portion of their pensions, as well as a portion of their
> health care.
>
> Social security is nowhere as generous as the public pension funds.
> Even social security is now running at a deficit with the recent
> economic downturn. That is a growing problem as more and more people
> retire and fewer and fewer are working and contributing.
>
> Horse:
>> One big problem is that the retiring age of 65 is a bit out of date - by
>> about 100 years or so as around 100 years ago 66 was the average age that
>> most folk (mainly men) attained before they popped their clogs and got
>> buried. So you retired at 65, got your stuff in order and then dropped dead
>> - more or less. And had a year or so, on average on the agreed benefit in
>> order to do this. Many people now live a lot longer than that so the amount
>> needed to pay all pensions has increased enormously over the last 30 - 40
>> years or so. One of the problems of having a decent state health system I
>> suppose!
>
> Dan:
> In doing some research, I've found that most of my ancestors (men
> included) lived well into their 80s and 90s, even back in the 1700 and
> 1800s. I suspect though that they remained active and vital to the
> community in ways that older folks today do not. I do agree that the
> problem is a decent health care system that entails spending hundreds
> of thousands of $$ a year to keep someone alive well past any sense of
> quality of life.
>
>>Horse:
>> So government workers and government contracted to certain agreed conditions
>> and rates of pay. The workers fulfilled their side of the bargain so now
>> they expect the government to fulfill theirs. Entirely reasonable really -
>> if you enter into a contract to fix someone's motorcycle or build something
>> or whatever, and you do your job then you're going to be pretty pissed off
>> if the other side tries to change the rules and not pay up. That's what
>> contracts are about. If I was one of these folk I would expect my employer
>> to fulfill their side of the bargain - it's not my problem if they're a bit
>> short of cash. We had an agreement and it should be honoured.
>
> Dan:
>
> The thing is, it is your problem when there's no more cash in the
> till. No one likes being handed the crappy end of the stick but the
> hard fact is, a lot of people are going to have to take hold of it.
> That, or the whole system is going to start crumbling.
>
> Horse:
>> It may be time for government to wake up and smell the coffee and realise
>> that they need to change the conditions for any new contracts but any
>> existing contracts should be honoured - as with any contract between 2
>> parties where one side has carried out their duties as requested. It's
>> difficult for government to do this without raising taxes or cutting
>> services but a deal is a deal - whoever makes it.
>> I can't see why there should be a problem with unions and collective
>> bargaining or whatever - there should be no need for it if each side acts
>> honourably and reasonably.
>
> Dan:
> If honouring existing contracts drive municipalities and states into
> bankruptcy, who is being served? In the short term, retirees continue
> to receive exorbitant sums. But in the long term, the cash cow dries
> up completely. Isn't it better to revise things now and maybe they
> won't get as much but they will still continue to get something?
>
>>Horse:
>> Perhaps those that are at the root of the problem, with respect to the
>> current financial problems, need to be educated to play their part in the
>> social structure within which they operate. You know, that old fashioned
>> principle of paying your way. Just a thought.
>
> Dan:
> Agree.
>
> Thank you,
>
> Dan
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