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Khan Academy: the Future of Taxpayer Reeducation?
theodp writes "Illinois Governor Pat Quinn has launched a website and gone social on Facebook, Twitter, and YouTube to educate taxpayers on why they must make good on pension promises to state workers. And, in addition to Squeezy the Pension Python, Gov. Quinn is enlisting the help of Khan Academy, the tax-exempt, future-of-education organization funded by tax-free millions from Google, Bill Gates, and others, to help convince taxpayers that a state-pension-promise is a promise. In the Khan Academy video commissioned by the Governor, Illinois Pension Obligations, Sal Khan concedes that the annual annuity payouts for IL state employee retirees do look 'pretty reasonable' — e.g., $43,591 for the average teacher, $117,558 for a judge — but goes on to argue that 'in all fairness, this was promised to these people,' who he speculates 'probably took lower compensation while they were working,' 'probably stayed in the jobs longer,' and 'probably sacrificed other things' to get these 'great benefits.' 'We're delighted to have his [Khan's] help in enlightening Illinois citizens about how the pension problem came to be,' said the Governor. Of course, not everything can be explained in one video — perhaps other contributing factors like 'pension spiking', lobbyists' maneuvers, sweetheart deals, creative job reclassification, golden parachutes, bruising investment losses, and other wacky pension games will be taught in Illinois Pension Obligations II!"
I'm not sure about Illinois, but in California, the problem isn't current pension payouts. The problem is the payouts we've promised to future retirees are sorely underfunded. In the late 90s the state legislature made the calculation that the stock market would keep going up and up, and expected that the DOW would be around 30,000 right now. Add to the problem that CALPERS hasn't made the best investments, and California has a $500billion unfunded liability.
Note that if any CEO of a company managed retirement funds like the state legislature does, he/she would be in jail. I don't know if Illinois has a similar problem, but I do know enough about politicians to think Governor Quinn is not telling the whole truth.
"First they came for the slanderers and i said nothing."
Taxpayers that are struggling to feed their families and find jobs for themselves and maintain their workforces shouldn't have to pay for cushy retirements.
Then they should have voted for politicians better at negotiating contracts, and got what they deserved. The taxpayers are only paying for what was promised by their elected representatives. If there's a problem, the taxpayers need to reexamine their choices for representation.
Learn to love Alaska
It's still true in many government jobs. I know some people doing government IT work, and they get paid a lot less than they could make in the private sector. They do it for a mixture of the benefits, and because they're big-data advocates who have sort of an ideological commitment to getting more government data online, so enjoy their jobs. Professors at state universities also have lower average pay than at private universities.
10 PRINT CHR$(205.5+RND(1)); : GOTO 10
The problem with Illinois pensions isn't the level of benefits. It's that the legislature has been underfunding the pensions for more than 20 years. Legislators and governors have kept tax rates low and spent most of the tax revenues on the general budget, always promising to catch up on pension contributions "next year." As a result, the state's retirement system is now only 36 percent funded. Decent pension fund management would keep it around 80 percent funded. In addition, the legislature gave the state all the responsibility for making pension payments for all local school districts in Illinois except the city of Chicago, letting those places keep property taxes lower rather than taking some responsibility for the pensions they negotiate.
Taxpayers that are struggling to feed their families and find jobs for themselves and maintain their workforces shouldn't have to pay for cushy retirements.
Then they should have voted for politicians better at negotiating contracts, and got what they deserved. The taxpayers are only paying for what was promised by their elected representatives. If there's a problem, the taxpayers need to reexamine their choices for representation.
Also expect to pay me a shitload more money if you take away my pensions. As a teacher I gave up jobs that would pay $60,000 a year for a job that pays $40,000 a year. Besides a change the only other reason why I would voluntarily do so is because of retirement being taken care of. If you bitch and whine how it is so unfair that I get that and you don't keep in mind your IT jobs pay A LOT MORE so you can afford to save more.
I will quit and go back into IT as well as many other teachers if you take our pensions away. That was the deal you made upon we agreed to work for less. Who in their right mind would sign up for $70,000 to $100,000 of debt to train for a job that pays $35,000 a year with no pension otherwise? You simply wont find any qualified teachers or any other public servants otherwise.
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These state workers paid into their pension accounts over the course of their careers; they have reduced their lifetime earnings by dozens of thousands of dollars to fund their pensions. The state is responsible for providing matching funds for their pensions, but only rarely has actually paid up fully. Teachers and social workers are funding their own "cushy" retirements. Or at least they're trying to, but their funds keep getting stolen by lawmakers.
Except that a big part of this retirement INCLUDES payments and contracts made instead of social security. These employees don't get SS, these ARE their retirement payments.
These pensions were part of their *compensation package* by contract when they were hired, and just because the state of IL didn't set the money aside like they were supposed to, it doesn't mean they aren't obligated to honor the contracts. It would be no different from the Federal government saying "ok, we don't have enough money for social security even though you paid into it for 40 years, so too bad".
'in all fairness, this was promised to these people,'
It's easy to promise money, especially when it's not your own money.
That is the nature of Government; it confiscates resources under threat of violence and then squanders them. Government is a bad company that won't go out of business because it can force you to pay for goods and services even if you don't want them or even if you know they won't be fulfilled.
Private employees shirk unionization, then experience pay and benefit cuts, and somehow believe that this is just how the world SHOULD work. Having failed to defend their livelihoods when they had the chance, they become so bitter they demand that no one have decent wages or benefits.
Public workers have been vigilant in defending their standards of living; maybe you could learn something from them.
The civics of, say, giving teachers in Portland a pension at 105% of the income they retired at, per year, with "PERS" that essentially bankrupted the education system?
There's a (not necessarily too) fine line between education and indoctrination.
You're quire obviously trolling, but I'll explain anyways. He didn't say he took a shitty job. He said he took a job whose compensation package traded immediate income for a stellar retirement package. It's no different than taking a slightly lower paying job anywhere else for alternate benefits (like free gym memberships, free snacks at work, extra vacation, flex time, etc.).
If the state doesn't want to foot the bill for the extra benefits, they will be stuck paying the increased income required to attract anyone decent. It's on the state that they chose not to bank the income difference to pay for the pensions. Quit making this out like the teachers are to blame.
"They that can give up essential liberty to obtain a little temporary safety deserve neither liberty nor safety."
Because you're retroactively making it shittier. The fact that there's a pension of a certain size was part of their pay--they received some of their pay in salary and some in pension benefits. Retroactively deciding that they don't get it the pension is no better than retroactively taking $25 out of their salary every month, except that since the salary is already in their pocket and the pension isn't it's a heck of a lot easier to take away the pension.
It is even better when you consider the first thing cut at EVERY company in times of trouble is the pension funds.
What I don't understand is why we keep letting the people we work for control our medical and retirements.
If you are under 40 chances are your going to work for 6-10 different major companies in your life. You don't go down the street and work at the local factory for 50 years anymore.
We really need to pull the companies we work for out of those equations. it will be a nice break for them and it will be better for the rest of us.
i thought once I was found, but it was only a dream.
Why is that such a bad thing? I work for the state of oregon and I'm under pers. The idea is we pay into that pension fund - they re-invest it (making more money) and pay it out.
I already take a 20k a year pay cut for working for the state - 105% seems reasonable for doing that.
Maybe it's because the world is globalizing, and because of places like China, all unionizing will do us price us out of the marketplace.
I don't see union detroit doing all that great, do you?
When government screws you over, there's nothing you can do about it, because they are the law. At least when a company screws you over, you can sue them or something.
"First they came for the slanderers and i said nothing."
Exactly. I'm in my mid 50s and I've had the honor of working at a couple companies for 5 years, but most jobs I've had since moving up to the Silicon Valley lasted on average from a year and a half to two years. At one level I get your point. Business today won't keep anyone on long enough to get a pension. This is however leading to a real problem. I and a significant number of my friends went to great length to prepare for our retirement only to see the greedy banking industry obliterate our savings by hijacking the economy. On the other end, what threatens to be runaway inflation caused by printing dollars in an effort to fake the world into eating our debt, threatens to turn whatever little is left into rolls of something squeezably soft (ask Mr. Whipple.)
I'm a boomer on the back end of the boom, but I have no illusions that there are a lot of converging forces that threaten social security and I don't want to have to depend on Social Security or Medicare to survive. What I see is a growingly hostile environment for the graying and gray, and I could imagine a society that marginalizes its aging members, even perhaps helping them leave the world in large numbers to accommodate those who are younger. I also see another possible trend that is equally frightening. Breakthroughs in technology and medicine dramatically increase lifespan and more important vital lifespan. With fewer and fewer young people taking science and technology as professional directions, Those of us with these skills may be pressured (using a number of means) to remain part of the workforce into what might have otherwise been our dotage. This would actually be just fine with me, if the gray didn't somehow become part of a marginalized class. Keeping us around as a slave class to stoke the machine keeping the young'uns in Big Macs and Mood Enhancers, isn't my idea of a utopian society.
We live in such uncertain and disruptive times, that its difficult to see ahead and make sane plans for the future. Even for those of us who have "made it", there are real concerns about what the future will bring. Our economy and the government manipulating it are utterly unsustainable. Our society will change, either in a planned and intelligent fashion or a catastrophic failure. In any case, There's no guarantee that current wealth will survive an economic reboot. Its time for all of us to begin looking at the obvious trend in technology, society and the environment and begin working to build a workable present and optimal future. Part of this includes giving up on the "I'm gonna cut me a slice" mentality. Managing for personal freedom and civil rights is profoundly American, that should continue, but now its time for us to also be responsible citizens of the world and work towards a world we can all live in together with the maximum happiness and opportunity for personal success and fulfillment.
The problem isn't you. its a private sector that continues to squeeze the average worker until he and his family bleed. When they look over at you and see you not bleeding their response is what makes you so special. Worse when the economy is broken and state economies are on or over the verge of collapse, private sector worker begin to see it as y'all being greedy (and your unions) rather than pinning the responsibility for the problem where it belongs with powerful and wealthy men who have used the American Economy as their own piggy bank. All they have to do to succeed, is pit us against one another so we don't notice their hand in our pockets and purses. Honestly, you aren't the problem.
Except the young'uns historically are not an exceedingly key voting demographic. The elderly ARE a very cohesive voting block. AARP has approximately 40 million folks. Not something politicians take lightly. Social Security and Medicare will be the last programs to ever be cut. FY 2013 has Social Security at $820 billion, Medicare at $523 billion, Medicaid at $283 billion.
I don't doubt the elderly will be squeezed on benefits. If you told me that the average person lost money on Social Security, I wouldn't be surprised either. I do know this. I'm 30. I believe folks my age will be lucky to see pennies on the dollar for Social Security and Medicare. Whether it is true or not, this is virtually a universally held belief for folks under 40.
I don't believe anyone wants to hold the elderly as a slave class, nor do I believe that will happen due to demographics. The young are statistically more likely the ones to become the economic slave class unless they basically refuse to pay for other folks' promises. Therein lays the interesting issue.
I always had an issue with philosophical and extremely popular notion of passing debt onto the next generation. Thankfully under most circumstances, for individuals, debts are null and void when an estate is settled. But not for governments. Tax revenue shortfalls have been solved by inflating the money supply and borrowing. We have a huge debt that will eventually come due. The last handful of generations have known this and done very little to do with it. I wouldn't be screaming "the young are trying to screw over my generation" when the young are looking at bleak economics, overpriced education, poor job market and several trillion dollars of debt.
That was my FATHER's generation, not mine!
NO IT WASN'T. Median job tenure in the 1950's was LOWER than it is today. "Lifetime employment" never applied to more than a small minority. Yet even today, most people spend a median of 21.4 years as their longest job tenure. In 1969 the figure was 21.9 years, nearly the same. This "lifetime employment" myth is an example of the "golden age meme" but things really weren't any better back in the "good old days".
Let's attempt to be honest here. Each and every presidency since I became aware of politics has left behind a debt greater than the presidency before it. The only exception was Clinton. As much as I despise the man, Clinton, and as much as I despise his "greatest" achievements, as much as I despise Clinton's politics (both of them, actually) his presidency did SOMETHING right.
But, yeah. Two wars. That put a huge freaking hole in what I'll laughingly refer to as a "budget". Tax cuts for the people who would have paid the lion's share of his wars? That was just adding insult to injury.
"Windows is like the faint smell of piss in a subway: it's there, and there's nothing you can do about it." - Charlie Br
The Civics lesson is that when the government enters into a contract with an individual that it cannot then decide later on that it doesn't liked the contract and legislate to undo it.
Why not?
There's this thing in the world called bankruptcy. It's a backdrop to contract negotiation. It basically says that if I make a contract with you that is so bad that you can't sustain the contract, you get to get out of honoring the contract.
Just because, 10, 15 or 20 years ago, a group of employees managed to convince a politician to give them a contract that no reasonable party could expect to be maintained doesn't mean that now, 20 years later, we can't say, "That was ridiculous. It's going to bankrupt the state and we have to undo it."
Illinois is a particularly good (bad?) example of this. Many years ago teachers convinced politicians to set up a state-paid teacher retirement system. And they put in things like a formula where the school districts pay into the system based on the salary of the teacher that year, but the retirement payments paid to the teachers (and administrators, superintendents and others are in the same plan) are based only on the highest-paid 4 years of each participants career.
I'll give to 15 seconds to figure out what happened.
That's right, unions and administrators all started negotiating contracts where the school district gave participants huge raises in the 4 years before their retirement. Didn't cost the school district much in retirement plan contributions (they're only paying the higher rate for the last 4 years of a 30-year career) and the participants get a huge benefit - a much larger pension for the remaining 20 to 40 years of their lives.... paid for by the state aka the taxpayers.
When you get down to it, it's just a short step away from a conspiracy to steal money from the taxpayers of the state, and at some point the taxpayers are going to put a stop to it.
paintball