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Public sector/benefits to be savaged FT article
Comments
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The worker's 'sacrifice' of income is rather meaningless as it isn't being set aside anywhere. In fact it's worse than meaningless because the money is taken out but isn't saved, it just reduces the wages bill.
Ask yourself, what happens to pension money? Mostly, it's invested in shares and corporate bonds which reduces the cost of funding for corporations which in turn means they can produce more at lower cost which will increase GDP. It's an unintended consequence of pension provision and probably impossible to measure in any meaningful way but that you can't measure it isn't the same thing as saying it isn't there.
I think you're missing my central point - the Civil Service pension scheme is unfunded and the liability unaccounted for. The chances of all Civil Servants working today receiving anything like what they have been promised is remote given the current levels of overspending by Central Government.
Do you really think that a National Debt of 80% of GDP and a GBP1,000,000,000,000 liability can be paid out of taxation while maintaining current levels of spending? I'd be very interested in any explanation you can give for how that could be acheived.
I didn't explain myself well. Sacrifice was perhaps the wrong word here.
My point is that the workers at any given time must pay for the consumption of all the people and so 'pay' the pensions of all, irrespective of whether these are funded or unfunded scehmes. As I've said before the mechanisms are either taxation or company profits.
Whether pensions funds do enhance the overall level of investment doesn't seem at all obvious to me. I'm not saying you're are wrong, just that is doesn't seem obvious to me. e.g. over the last few years it would be hard to argue that investment capital was scarce.
I had missed your point about civil servants pensions.. the good news is that future taxpayers' wouldn't be burdened as often predicted; the bad news is that civil services pensioners will be screwed.
The level of nation debt at 80% of GDP is very high. As I understand it about 35% is directly related to the bank bale out. Against these debts hopefully there are some assets that will prove to be of value.
However looking at the G7 counties per capital Japan, Italy, US, France and Germany all have higher levels of debt than we do.
I do however, agree that there will need to be expenditure cuts and increased taxation... Darling has already outilned increases for 2010 and 11 and Cameron is promising the same.0 -
donaldtramp wrote: »http://www.timesonline.co.uk/tol/news/politics/article6256717.ece
This is the most recent Yougov poll. And 54% of respondents would back a 20% cut in public expenditure.
It's coming public sector workers whether you like it or not.;)
I'm glad the general public are coming to their senses after allowing labour to balloon their benefits and mollycoddling the public sector.
The boot is most definitely on the other foot. Public sector employees, you better start polishing up your cvs!
The problem is that if you put a squeeze on Public Sector worker's conditions the good workers will leave and all that will be left is the dross.
I for one would have no problems in leaving my public sector job if my working conditions (Pay, Pension etc) were to deteriorate. I would probably end up doing exactly the same work but as a contractor and at a vastly inflated price.
Also you may want to consider that the government is probably UK industries largest customer in many areas. A cut in government spending will almost certainly affect commercial businesses and will lead to job cuts in the private sector.0 -
donaldtramp wrote: »I'm sick of knocking this point down....
But lets hope this sinks in to some of the public sector employees this time.
You might pay 7.5% in but government contributions to your pensions can be up to 23%. NO-ONE in the private sector receives that. Further to your point, that means 2 million other people receive these massive top-ups from the government!!
Do you see why people are getting a bit peeved?
I've heard all this before,
"but I'm only entitled to x as a pension"
What about all the poorly paid private sector workers topping up YOUR pension when they will only get the state pension???
As for articles like this bringing down public sector pensions, GOOD!!!
Excellent, we should have more of them.
Anyhoo, doesn't really matter as the public sector pensions will all be cut, whether you guys like it or not after the next election. Whichever party gets in.
At least you know it's coming.....
Where did you get the 23% figure from?
Just to clarify, for anyone on here who might imagine from donaldtramp's posts that 23% is somhow the norm, it isn't; nor is the 7% figure he quotes.
Pension contributions vary depending on the nature of the public sector job and when the individual joined and what pension scheme they chose - most pay in at least this themselves, but do NOT get anywhere near 23% employee contributions.
Someone, somewhere, may do, but to suggest this is across the board is highly misleading.
To agree with the last poster, 2 equivalently qualified people I know, both working in management, one private, one public.
The private sector one is responsible for about £2m and manages 1 person; salary c 80K, bonus 8K this year. The public sector 1, manages several hundred million pounds of public funds and team of 8; salary 50K, bonus maybe 1K.
Curiously, the private sector 1 works for Shell, so if Stevie's figures are correct, then their pension is equivalent or better too!
Basically, if you cease to pay the people in charge of hundreds of millions of pounds of public fnds a reasonable wage and pension, you will get either corruption, or only the real dross left, who will waste many, many times their salaries AND pensions in utter incompetence.
You get what you pay for.0 -
The worker's 'sacrifice' of income is rather meaningless as it isn't being set aside anywhere. In fact it's worse than meaningless because the money is taken out but isn't saved, it just reduces the wages bill.
Ask yourself, what happens to pension money? Mostly, it's invested in shares and corporate bonds which reduces the cost of funding for corporations which in turn means they can produce more at lower cost which will increase GDP. It's an unintended consequence of pension provision and probably impossible to measure in any meaningful way but that you can't measure it isn't the same thing as saying it isn't there.
The money's being used for public services. It's not being saved, it's being invested in the goverment , not unlike an offset mortgage. Private sector pension funds also invest in the government via gilts. They are more secure than shares and bonds.
If money was set aside, we'd all pay more tax (or receive less services) in order to get the money to set aside. That extra money's got to come from somewhere.
I can see the point in private sector firms needing a pension fund to be set aside in case the firm goes bust. The fund can still pay the firm's pensioners.
The government can rely on being there in the future so needs no fund. State pensions work on the same principle.
I think you're missing my central point - the Civil Service pension scheme is unfunded and the liability unaccounted for.
Civil Service pension scheme doesn't need to be funded and the liability is accounted for
Can't post a link but google for "civil service resource accounts"0 -
The government can rely on being there in the future so needs no fund. State pensions work on the same principle.
Does the term pyramid scheme mean anything to you?
With the passage of time state pensions, interest on government debt & public sector pensions will grow and take up a bigger and bigger slice of the proverbial pie (due to every increasing public debt & an ageing population).
At some point it will become unsustainable and the wheels will fall off the wagon.
That may not happen for a few decades, but you can bet on it happening. State pensions are the biggest ponzi scheme there is.0 -
This is no longer true, the always excellent Gillian Tett on this very matter a couple of weeks ago:Private sector pension funds also invest in the government via gilts. They are more secure than shares and bonds.
A company that peddles chocolate coins, in other words, is currently deemed a better credit bet than the British Treasury itself.
So, for that matter, are tobacco giant British American Tobacco, services provider Compass, consumer goods group Unilever, energy group Centrica and Pearson, owner of the Financial Times.
It is a startling pattern, not least because last summer all of those companies had CDS spreads which were notably higher than the UK government’s.
http://www.ft.com/cms/s/0/1e8cd910-2f57-11de-a8f6-00144feabdc0.html
The rise in cost to insure against the British Government's default is rather scary."The state is the great fiction by which everybody seeks to live at the expense of everybody else." -- Frederic Bastiat, 1848.0 -
Does the term pyramid scheme mean anything to you?
With the passage of time state pensions, interest on government debt & public sector pensions will grow and take up a bigger and bigger slice of the proverbial pie (due to every increasing public debt & an ageing population).
At some point it will become unsustainable and the wheels will fall off the wagon.
That may not happen for a few decades, but you can bet on it happening. State pensions are the biggest ponzi scheme there is.
Unlike a pyramid scheme, the contributions go up, in line with earnings and are reviewed to ensure the wheels stay on..0 -
Unlike a pyramid scheme, the contributions go up, in line with earnings and are reviewed to ensure the wheels stay on..
The wheels only appear to be staying on due to some completely unrealistic government growth assumptions.
Stick around for a couple of years and see what's going to happen to public sector spending. It definitely won't be one for the faint-hearted.0 -
Old_Slaphead wrote: »The wheels only appear to be staying on due to some completely unrealistic government growth assumptions.
Stick around for a couple of years and see what's going to happen to public sector spending. It definitely won't be one for the faint-hearted.
Do you think your other half will still have her public sector job?0
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