Great chat! My contact info is in my profile, and I'm always interested in solving macro problems such as these if you want to chat more.
People get...optimistic, right? Pensions assumed an 8% return, which at the time, was realistic. And then the return curve declined. We're close to 5% returns into the future [1]. So what now? Where does the money come from to top up these pensions? Are we going to break our contract to pay these people because of poor forecasts? No, we're likely going to raise taxes (in a hopefully progressive manner).
Same thing with Social Security. Why did Social Security "lend" its funds to the US government [2]? Because the US government is the safest, most reliable investment in the world. But then, politicians go and spend that money. They're not around to deal with the fallout from their shortsightedness (and arguably, greed). There is no accountability built into the system. That's a flaw in the system, that we don't account for those incentives and guard against them. A better system needs to be constructed that accounts for centuries of existence and benefit delivery.
> So yeah, it seems a little unfair that one sector of the economy gets paid for being mediocre at best, and other fires people and demands performance. Yeah, I'm a little upset.
Sidenote: I think the labor system in the US is seriously dysfunctional compared to the rest of the Western world and needs to be fixed as well (more labor protections). One election at a time.
People get...optimistic, right? Pensions assumed an 8% return, which at the time, was realistic. And then the return curve declined. We're close to 5% returns into the future [1]. So what now? Where does the money come from to top up these pensions? Are we going to break our contract to pay these people because of poor forecasts? No, we're likely going to raise taxes (in a hopefully progressive manner).
Same thing with Social Security. Why did Social Security "lend" its funds to the US government [2]? Because the US government is the safest, most reliable investment in the world. But then, politicians go and spend that money. They're not around to deal with the fallout from their shortsightedness (and arguably, greed). There is no accountability built into the system. That's a flaw in the system, that we don't account for those incentives and guard against them. A better system needs to be constructed that accounts for centuries of existence and benefit delivery.
> So yeah, it seems a little unfair that one sector of the economy gets paid for being mediocre at best, and other fires people and demands performance. Yeah, I'm a little upset.
Sidenote: I think the labor system in the US is seriously dysfunctional compared to the rest of the Western world and needs to be fixed as well (more labor protections). One election at a time.
[1] https://www.bloomberg.com/news/articles/2017-08-02/5-is-the-...
[2] https://www.ssa.gov/oact/progdata/fundFAQ.html