How to solve the pension debt crisis

[dtcbnd03]

Originally Posted by Grlzrl

Are you referring to public pension? Or private?

Both.

[LakeLifePA]

Funny that this thread is still going. Just looking at the first page, I crack up at all the naysayers and doomsday predictions from 3 1/2 years ago:

Originally Posted by dtcbnd03

States will be forced to figure out a solution soon because interest rates will skyrocket and the market will fall in the next 2-3 years putting more pressure on the actuarial problems.

Interest rates still at all time lows and market has performed amazingly well over this time period.

Originally Posted by lepoisson

I suspect that as interest rates continue to increase on the pension debt, Illinois and Chicago will get junk bond status. When no one lends us money, our politicians will be forced to take action. They need to cut all pension payouts by 10-20%, tax retirement income, and eliminate pensions for new employees (get a 401K instead). This will all happen in the next 5 years.

Hasn't happened yet.

Originally Posted by dtcbnd03

100% agree. Interest rates will be around 7-8% in a couple years and for Illinois junk status it will be like 12% which is unsustainable and will cause the collapse. I'm just amazed that lawmakers haven't been forced to take action sooner.

[chicago_expat]

Originally Posted by jasperhobbs

Legalize recreational marijuana and use the tax revenue to solve pension debt crisis.

I don't think this is helping.

Everyone driving on the highway is smoking pot, judging from the odor. I don't imagine they'll ever pay enough taxes to fund pensions though.

[chicago_expat]

Originally Posted by Robert20170

Funny that this thread is still going. Just looking at the first page, I crack up at all the naysayers and doomsday predictions from 3 1/2 years ago:

Interest rates still at all time lows and market has performed amazingly well over this time period.

Hasn't happened yet.

Interest rates are being kept low by the Reserve, right? That's by choice. And the market was booming due to lower federal taxes in 2017 but the market is kinda meh right now and the job market numbers this year are dismal.

Maybe five years was a bad prediction but the problems with Illinois still seem unsolved.

[dtcbnd03]

I was slightly off by my prediction by 1 year. Social Security COLA for 2022 is 5.9%...inflation is taking off...and once Fed tapers in November and starts raising interest rates next year it will put downward pressure on the market. The most important factor in stock price valuations is interest rates. The higher the interest rates, the lower the valuation and vice versa.

[BOBNCHI]

Originally Posted by chicago_expat

I don't think this is helping.

Everyone driving on the highway is smoking pot, judging from the odor. I don't imagine they'll ever pay enough taxes to fund pensions though.

I get around the city and suburbs alot and the strange thing that I've noticed is that there is less pot smell on the streets since legalization. YMMV!