----- Original Message ----- From: "JDG" <[EMAIL PROTECTED]> To: "Killer Bs Discussion" <brin-l@mccmedia.com> Sent: Friday, May 13, 2005 6:36 AM Subject: Re: US Pensions
> At 10:29 PM 5/12/2005 -0500, Dan M. wrote: > >> And what happens if the company goes bankrupt? > >> > >The pension fund wasn't owned by the company...it was not considered a > >company asset. The problem was not that the pension obligations went to > >other creditors (the employees were creditors after all). It was that the > >company was able to use vodoo ecconomics to fund the pensions. > > Wow, how surprising. It really all always comes back to bashing > Republicans with you, doesn't it? Well, supply side ecconomics was voodoo. Bush I was right. Creative accounting was allowed to overstate the values of the pension assets. > First, we are talking about companies in bankruptcy. I find it very > difficult to believe that everything would be hunky-dory if the company had > just made even *more* payments in the past. Not everything. You may not know the dynamics of what's going on. Bankrupt companies are competing on price, _after_ they've been able to write off major obligations. As a result, their cost structures are lower, and they can undercut companies that were better off....forcing them down. As a result of the bankrupt airlines competing (contributing to oversupply and a price structure that's impossible for most airlines which have not gone bankrupt to compete with, one by one the other carriers are going down. If one or two of the worst actually disappeared, then the rest could stay out of bankrupcy. > Second, many of these funds are invested heavily in the company's own stock > - perhaps not in the case of United - but it does exist, and this practice > should be discontinued. That's one of the things that was allowed in the '80s. My memory was that was a change from the government regulations requiring prudent management of the pensions before that. > So, by your logic, I can presume that you favored the Bush tax cuts, as > cutting taxes for the rich surely builds support among the rich for helping > the poor - without which we'd be leaving our grandparents to eat dog food.... No, because the net effect is to direct money away from the poor and toward the rich. Let me give a corporate parallel. If a particular company within a has high costs and higher income, the company is still profitable. Slashing the high costs in that company may be more detrimental than cutting lower costs in another. SS can be thought of as an entity. There are SS taxes, and SS payments. The SS taxes are not enough to pay for future payments, so I suggested a mechanism for slowing their growth. The net effect is progressive. I really don't see the problem with me assuming the properties of algebra in discussing economics. Dan M. _______________________________________________ http://www.mccmedia.com/mailman/listinfo/brin-l
