No public expenditure in future years is funded. Governments have obligations to pay for a vast range of salaries, benefits, subsidies, purchases, etc etc - and yes, pensions - but the money to pay them in each future year has to be found within that year. There is no building up of a "deposit account" today which can be used to pay the bills tomorrow. The interesting question is why people keep going on about pensions being "unfunded" when exactly the same applies to everything else.
More about people being duped into paying for a retirement they were promised but will never get. At least as far as the majority are concerned. Our current government wants to make the State pension means tested.
When there is a financial obligation or expectation relating to future years, it is always possible to value it, i.e. carry out a valuation exercise aimed at calculating an approximate notional current value. Being able to calculate the notional current value of a future commitment is not remotely the same as having set aside a capital sum (or "pot") of money to pay for it. People to whom promises have been made often worry whether those promises will in the event be honoured or welshed upon. No surprise there then.
Not just state pensions. Don't forget Gordon Brown's raid on private pension tax relief. For millions of people, not only will the state pension they have been paying into through taxation not be worth the paper it is written on, neither will their private pensions. They've been shafted twice over. And by a Labour government. If you replace the term "public services" (as in "delivering public services/rolling out public service" etc) with "state dependency" it all starts to make sense.
The recent reduction in interest rates will increase the calculated deficits in pension funds to an even higher level. On the other hand, if (when?) interest rates were increased by a few percentage points, the deficits would obviously disappear. I can remember a time when interest rates were typically much higher, with the result that many pension funds were in surplus.
It is the idea that as those on defined contribution pension schemes were given the opportunity to access the pension pot that they had built up with their, and their employers, contributions that those on final salary unfunded schemes should be able to do the same that I find objectionable.
If interest rates were increased by a few percentage points could we continue to service our debt. In Japan investors are buying government bonds with a negative yield. What does that tell us ? We are caught between a rock and a hard place, the game has moved on and the old rules no longer apply.
Three examples of calculated theft thought up by powerful Unions in different Public Sector organisations,and allowed,for some reason,by those who should oversee the public purse. All of these people are known to me,and two of the three have described the practices they themselves benefit from as ridiculous and unsustainable: (1) Prison officer takes voluntary redundancy after twenty years,but is told to return after five years retirement to collect his £30k 25 years service gratuity.He is told that he will get it because,"it's not his fault he's not working the full 25 year". (2) Police sergeant in the Met gets bumped up to acting Inspector months before retirement,as his pension is calculated using the rank reached at retirement.Needless to say the difference between Sergeant and Inspector pension is considerable,and he admits his "Guvnor",only did it for the enhanced pension. (3) Senior fire officer goes on long term paid sick leave and then early retirement claiming he was overworked in the Fire Service,(he's far too senior to be attending fires or climbing ladders),even though for years he has been running his own event services company at the same time.Last I heard he was trying to sue the Fire Brigade for work related stress... If I've mentioned these before,I apologise for boring you a second time. Contracts of Employment can be changed,and the employee has two options.Accept it,or fuck off and maybe try to claim constructive dismissal. Unsustainable pensions are unsustainable pensions are unsustainable pensions.What is good for some should be good for everybody. My personal opinion is that if some people stopped being so bloody greedy and lost some of their sense of entitlement,their would be a bit more for everybody else.
This what we need, helicopter money Want to avoid recession? Then shower UK households with cash | Simon Jenkins | Opinion | The Guardian Switzerland will be the first country in the world to vote on having a national wage of £1,700 a month | Europe | News | The Independent
When you say "our debt", perhaps you are referring to the government's debt, often known as the "national debt". What this tells us is that for interest rates to go up has both advantages and drawbacks - just as interest rates going down also has advantages and drawbacks. Japan is in a situation of having persistent low growth, low or negative inflation, and a gigantic overhang of government debt (much larger proportionately than, for example, Greece's). Switzerland has also toyed with negative yield bonds, although for different reasons. You are right, I believe, in supposing that higher interest rates would not only make solving the pension funds deficit issue easier, but at the same time would make servicing government debt more difficult, among other things. Don't forget that when the government pays interest that money does not disappear; it goes back into the economy and circulates again.
Interest rates will never go back to what they were before 2008 in my lifetime. It all comes back to the same thing that all current government expenditure in practically every country in the world is not sustainable. I'm thinking out loud here but if the national bank charges banks for holding their money and they pass that onto their customers, is it not possible that governments could offer negative yield bonds that work out cheaper than keeping your money in the bank?
But I don't want the EU to keep going :Bucktooth: not in its current guise anyhoo :Bucktooth: So there :Bucktooth:
The BBC on the news this morning was still analysing "what went wrong" with the referendum. Was it Jeremy Corbyn's lukewarm contribution to the Remain campaign or his actual obstructionism (asked the superannuated millionaire Euro-pensioner, Mr Peter Mandelson), or was it a failure to take seriously the question of immigration, as claimed by the acerbic Anna Soubry (who long before the referendum campaign began was virulently pro open-border immigration and never missed an opportunity to take to the screens and spit venom at the racist, knuckle-dragging, moronic apes who didn't share her enthusiasm for mass migration or her general view of the world). What these people don't get is that the referendum didn't "go wrong". There was no preordained result. There never is in democracy and that is the point of it. The people were asked their opinion and they spoke their minds. If analysis is needed it should focus on why the metropolitan liberal elites in the media and on both the left and right of politics are so utterly in denial about the long-evident fact that a majority of the population reject the imaginary "consensus" which ivory tower liberals claim exists in support of the way they think we should live and be governed; and that they (the electorate) do not share their (the liberal's) preoccupations or world view and they have had enough of being at best mocked and ignored and at worst vilified and denied political representation. What is "wrong" is not the result of the referendum but the refusal of the ruling chattering class to accept that they do not, never have and probably never will speak for the majority of the nation. It isn't the stupid, under-educated, out of date electorate who need to get up to speed on current political thought, its the political class that needs to get in tune with the electorate. The nation has spoken for itself and they had better get used to it.
Gove ought to be sacked and prosecuted for the lies he told about the Queen and Brexit. What a vile piece of shit he is.
