Yet again, Whiskey Tango Foxtrot, over.

I'm not sayin' that a potential $77 billion that might get dumped in taxpayers' laps isn't bad enough. But compare that to the trillions and trillions of unfunded SS and Medicare liabilities that taxpayers are on the hook for, due to past congressional (1) over-promising of benefits, and (2) wasting of ALL the "trust fund" revenue as it came in, and the auto pension liability seems a drop in the bucket. Sigh.

Personally, I look forward to the collapse of society.

One, I'll finally have the chance to kill people who truly piss me off with no legal repercussions.

And two, its better for humanity in the long run.

The ashes of failure raise up new innovations. Were it not or the massie plauge deaths in europe we'd probably still be living in a fuedal society

Simple. "The government's Pension Benefit Guaranty Corporation insurance program" should not exist.

Pensions are kind of a dumb idea. Contributions get invested, and if the returns fall short, the company is supposed to pick up the tab. So how are they going to support all these retirees for several decades? They end up paying more for people who used to work there than they pay current employees. Unless the former employee produced a long-lasting innovation, he or she is DONE contributing anything of worth to the company. Yet the company promises to pay and pay, and so on. Way to drive your company to bankruptcy! Clearly they have made promises they cannot keep. Well, too bad. Why should this be the taxpayers' problem?

401Ks and IRAs, on the other hand, can lose money too. But at least it won't bankrupt a company. Responsibility is placed on the individual, where it should be. The bottom line is, there are no guarantees with ANY kind of investment program. Sorry, but that's the way it is. The government should stop trying to pretend otherwise.

We see society being divided into two classes, the entitled and the non-entitled. If there is ever another civil war in America, this will be the cause.

Maybe, but the entitled have more guns. They just don't drag them around, blazing away at anyone who angers them, so their number of guns aren't as obvious.

If retirement plans were implemented as they were originally intended to work, this would not be a problem.

The original and obvious plan was the company contributed a certain amount each pay period to a retirement plan as part of the pay schedule.

I made $16.25 an hour when I retired from my union factory job in 1997. (Not all union employees make a fortune; I was in the highest pay bracket in our union.)

The company takes out taxes; also Social Security contribution; tacks on their SS contribution; adds their contribution for medical insurance; etc., etc. Then, tacks on the retirement contribution, based on each hour or pay period.

That is reasonable, if you don't work, nothing goes in the kitty. So, everything is fully funded. When you retire, they give you an annuity based on what you accumulated over the years, in real money.

But, then the razzle-dazzle starts, with Enron / derivative / fancy paperwork stuff. "Hey, we don't have to fund this now. We got our buddies down in the Beltway to let us 'postpone' the retirement contribution part, which means we can offer greater retirement benefits with no real cost to us. Now. And, I'll be retired with $20,000 a month retirement income before the brown stuff hits the ventilator."

Repeat after me: Ponzi.

Also, though I am not current on the government back-up for retirement plans, but in the 90's, they gave us a hand-out, which said the government was not at all obliged to supply the same retirement benefits the failed company had promised. Those with much larger pay-outs simply were scaled down quite a bit.

My memory is not perfect after this many years, but I thought other retirement plans were supposed to contribute to this scheme, sort of like FDIC, not just tax-payers. Not sure, but before anyone says anything too strong, perhaps it would behoove you to check it out.

It seems only the Chinese know how to deal with this sort of fancy, surreal financing crap. When someone has jerked around the system, and caused major suffering to the public, they just drag them out and shoot them.

"but the entitled have more guns"

Like the white farmers of South Africa.

Gas pedal....floor board....cliff (you know the routine).

Tangential issues/Offtopic Twofer—

1. For years on this blog I've been asking what's up with all those air marshals we got after 9/11. Now we know.

2. Here's a brilliant tweet.

—As you were. Smoke if you got 'em.

Deets.

I wonder how this compares to the total of all government worker's pensions? This isn't sustainable in the long run, and I suspect the end is closer than anyone wants to admit. I'm betting the obligations are defaulted on, or inflated away.

Things that are unsustainable always end, and the end is usually catastrophic.

Only catastrophic for the people who have become dependent - for those footing the bill, it will be a welcome sigh of relief.

All I know is I'll never be able to retire, even if I want to. I'm really grateful for the pension my husband earned working at a mill for thirty years, because he's had to dip into it since the mill closed, he went back to school, and is now seeking work alongside all the kids half his age.

"The cattle all have brucellosis, we'll pull through somehow"...

"We see society being divided into two classes, the entitled and the non-entitled. If there is ever another civil war in America, this will be the cause."

Not convinced that the majority know which of the two groups they fall into. I don't think most people fully recognize the programs they benefit from and I don't think most people are aware of who does benefit from some of the massive programs that don't benefit them.

47% pay no income taxes? Okay, I was leaning this way anyway but now I'm convinced. The U.S. tax code makes little to no sense.

Although it does help to explain a survey result I saw a year or so ago that suggested over 1/3 of Americans think the US Government has its own money. If you don't pay taxes, why wouldn't you think this?

I suppose we could be thankful that the liabilities aren't in the tens of trillions, a la Social Security.

Were it not or the massie plauge deaths in europe we'd probably still be living in a fuedal society

You get the Captain Trips, I'll get the crop duster.

> Sigh.

Why do I hate when people do that so much?

"I don't think most people fully recognize the programs they benefit from and I don't think most people are aware of who does benefit from some of the massive programs that don't benefit them."

This is brilliant - We could identify a single program and ask two questions about it: 1) Who benefits from it? and 2) Who pays for it? The most incendiary programs would without a doubt be the ones where the answers to 1) and 2) are not the same people.

I am actually satisfied with the way roads are funded. Mostly (in my state, anyway) it's through gas taxes. The people who use the roads the most pay the most gas taxes. But even if you never drive, you still benefit from the roads ... and you still pay for them, just not directly. That bottle of shampoo you just bought had to be loaded onto a truck and driven across a couple of states to reach you. So the price of it includes a few cents that ultimately pay for gas tax. My only gripe with the system is that the amount of tax you pay on gas is not revealed to you at the time you buy it. Income taxes irritate me, because it's like assuming people who earn more money use more public services. In fact, the opposite is usually true. Can anyone think of an example where it WOULD be true?

Just as a side note, our previous governor wanted to try and raid the fund supported by our gas taxes. Because a group of people had voluntarily formed an organization whose specific function was to act as a watchdog for that fund, he was not successful in his attempt.

"> Sigh.

Why do I hate when people do that so much?"

Maybe because it communicates a sense of futility and despair? Is somebody killin' your buzz, Crid? Here, have some wine. ;-)

"Income taxes irritate me, because it's like assuming people who earn more money use more public services. In fact, the opposite is usually true. Can anyone think of an example where it WOULD be true?"

I'd say the entire public infrastructure built around air travel (airports, air traffic control networks, transportation security, etc) benefits working people (or at least, those for whom they work) more than it would those who don't work. Not saying the poor don't benefit at all from air travel, just that the lion's share of the benefit is not accruing to them. There are probably other examples but that one seems reasonable.

Economists generally agree with you that taxes on consumption are better than taxes on income. I think the tax system should follow follow the principal of "less of what you don't want, more of what you want". Tax pollution, tax environmental damage, tax bad consumption, tax high risk financial plays that imperil the whole system. Don't tax income, don't tax good consumption, don't tax savings, don't tax job creation etc.

Air travel ... I would guess that the airports and runways may be publicly (locally) funded, but the airlines themselves are privately run and paid for by passenger tickets? What about all the gas the planes use? Do those gas taxes go to roads, runways, both?

But people travel for many reasons - business or pleasure are the usual categories. If you travel for business, your costs are picked up by your company, and ultimately the customers of those companies, so that is still user-based. When you pay your cell phone bill, a dollar or two may be covering the travel expenses of the cell phone companies' employees. If you travel on vacation, it comes out of your own earnings, while you benefit the lodging/airline/restaurant industries. Who pay taxes for the infrastructure they use, and so on ...

What do you mean by "tax high risk financial plays that imperil the whole system"? What kind of "financial plays" are you referring to?

I'd wager most airports were originally built by government so there is a store of public good in that infrastructure. I may have misunderstood your query, but I think there is a great deal of public services around and supporting the air travel industry. LIke the NTSB and the ATSA etc. And I guess not having planes randomly falling out of the sky qualifies as a public good, though one that is shared pretty equally admittedly.

Well sub-prime was pretty hgh risk but there is the broader idea of a Tobin Tax floating around as well.

> Maybe because it communicates a sense
> of futility and despair?

That ain't it, but I'll have some wine anyway, thankyouverymuch.

Also, what Scott said.

Rich people are usually good at exploiting infrastructure that the entire society has put in place. Wal-Mart wouldn't have happened without the interstate highway or the kind of tax and zoning breaks that middle- and smaller-sized cities were ready to give to retailers just outside the city limits. They need customers who can afford to drive away from the traditional shopping areas to save a few bucks. All that context has value, and the people who benefit ought to be paying for it.

The recent fortune that comes to mind as the creation of a single man would be Microsoft, but no sane man would dispute that Gates success was mostly a land-grab. A land grab by an aggressive, brilliant visionary, but a land-grab nonetheless.

"I'd wager most airports were originally built by government so there is a store of public good in that infrastructure."

It would be interesting to know where their original funding came from. I am currently working for a water utility and can tell you that most of the funds used to build it were borrowed. 40-year bonds, to be repaid by the users of the system through their water bills. All the trenches and pipes will still be there 40 years in the future, so when it is all paid for, does everyone just get a big reduction in their water bill? It would be kind of fun to look at the financial reports of these airports, their job costing, and where the money actually went. When you say "built by government," do you mean local government? I assume so. With that, then the people who pitched in property taxes (or sales taxes, what?) that went to the building of these airports must have assumed that the increased traffic would benefit their businesses and local economy, thus paying for itself?

Tobin tax, from Wikipedia: "A Tobin tax, suggested by Nobel Laureate economist James Tobin, is a concept initially associated with a tax on all spot conversions of one currency into another ... The tax is intended to put a penalty on short-term financial round-trip excursions into another currency."

So, when one currency fluctuates wildly in value compared to another (I have no idea, but let's say Japanese yen compared to British pounds), there are some geeks out there who follow this and try to make money (it's basically gambling) on what they predict the changes will be. Is this tax designed to penalize them? For making profits if their guess ends up being right? Well so what? The could just as easily lose. Why should the average person care? As a root investor, you're basically saying, 'Okay, I expect the Japenese economy to do better/worse than the British economy.' You pays your money and you takes your chances ... Is this hurting anyone?

"Rich people are usually good at exploiting infrastructure that the entire society has put in place."

But what I'm wondering is if the rich aren't basically the ones paying for that infrastructure in the first place? You say the "entire society" has put it into place, but what do you mean by that? Where do the dollars come from?

Take capital gains taxes, and Warren Buffet's silly comments, comparing his tax rate compared to his receptionist's. He buys something, and until he sells it, no matter how much the value of it grows, he doesn't pay tax on that. His balance sheet improves, but his cash flow doesn't. He's leaving his money there, helping some company hire new people or rent space or create a new product or whatever, though - why is that bad? I don't really give a shit what his balance sheet says - those businesses could fail, too, and it would take a big dive.

If you're talking straight annual income - and granted someone can earn a lot of money but have zero wealth, because they spend just as fast as they earn - aren't these people already paying a shit-ton in sales taxes, mortgage interest, and so on? Just the fact that they're earning a lot of money, is that any reason to punish them? Hells bells, if I earned very much income, I'd probably spend it too.

"... tax and zoning breaks that middle- and smaller-sized cities were ready to give to retailers just outside the city limits ..."

Which just tells me that those Mom & Pop stores inside the city limits were being taxed too much!

Airplane fuel is not taxed the same as automobile fuel. My brother and his friends got busted for burning "ave gas" in their high performance '60s cars. One of them worked at the county airport. The plane gas is leaded gas. The reason it is illegal is because the "roads" tax was not paid on it and that it was leaded. The gas has a special die in it so it is easily identified.

The 47% is the edge of the cliff. Numerous authors have noted, in one context or another, when the end of democracy comes: when the majority can vote themselves ever more benefits paid by the minority.

These days, a lot of airport improvements are paid for by earmark grants from Congress. However, at nearly all airports that serve the commercial airlines, operating costs are paid for by landing fees, leasing the gate and ticket space to the airlines, parking fees, and concession income. Small general-aviation airports usually get most of their income from renting out hangar and ramp space to aircraft owners, and by taking a percentage from whichever flight service companies are permitted to operate at the airport.

The FAA and the air traffic control system are paid for by ticket taxes, license fees, and taxes on aviation fuel. I'm not sure how the NTSB is funded, but note that it serves the entire transportation industry, not just the aviation sector.

"Numerous authors have noted, in one context or another, when the end of democracy comes: when the majority can vote themselves ever more benefits paid by the minority."

Will democracy's demise be at the hands of a tyrannical majority or of a tyrranical minority? The former is populism run amok the latter is oligarchy. Doesn't really matter, I guess, as neither is appealing. Frost got it right:

Some say the world will end in fire,
Some say in ice.
From what I’ve tasted of desire
I hold with those who favor fire.
But if it had to perish twice,
I think I know enough of hate
To know that for destruction ice
Is also great
And would suffice.

PS had to change my handle as I realized there's another scott prowling these boards.

"But what I'm wondering is if the rich aren't basically the ones paying for that infrastructure in the first place? You say the "entire society" has put it into place, but what do you mean by that? Where do the dollars come from?"

If I read you correctly, you are worried about the free (or discount) riders. You might be right but is there any point in keeping a great ledger? I pay a fair bit in taxes, certainly well above the average, but it doesn't particularly bother me. By any reasonably historical comparison, I live like a king: I have access to world class educational opportunities, very good health care, excellent infrastructure and so on. And I fully leverage these things to my own benefit -- certainly I extract far more benefit out of them as an individual than I contribute to their maintenance as a taxpayer.

What I'm trying to say is, if these things weren't available in the form of public goods (from schools to sewers to port facilities to roads to weather satellites etc -- so many things that contribute to making my life easier) I could never replace the benefits I extract from them out of my own income. It simply wouldn't be possible for me to maintain my standard of living if I paid zero taxes but also had zero access to public services/goods.

So I consider that I'm on the winning end of the equation. The fact that there may be somebody out there winning more than I am is probably true, but it doesn't really trouble me too much.

Let the execs pay the pensions out of their bonuses.