I promised Pioneer Preppy that I would try to explain Defined Benefit Pension accounting but I'm going to start by embedding a couple of lectures that explain the basic concepts and the moral hazards inherent with Defined Benefit Pension Plans.
I'll explain more inside baseball if you folks want, but this stuff is not only mind-bending but asinine.
Great videos. I followed it all pretty closely but then again I have been studying this sort of theft for a years now.
ReplyDeleteThe guy speaking went on and on about how these people earned it or were counting on. Cry me a friggin river. It's theft and unrealistic promises made on the backs of those who had no say in it and as far as I am concerned carries no legal or moral weight period. If my neighbor came down and ask if he could have my back pasture but his kid would pay me twice what it was worth in 20 years I would tell him to shove it. No person or government can make promises like that on the backs of others who have no say in it.
Well I think the instructor was trying to come across as impartial. I agree that the whole kicking the can phenomena is one of the prime moral hazards of any debt, which is how Pension Benefit Obligations are carried on the accounting ledgers.
DeleteEntities that are treated as immortal legally(companies and governments), have an even greater tendency to this because they aren't treated as having an inevitable date that what they own must stand against what they owe(death). Of course since governments and companies are actually finite this often leads to an end by what is basically denial.
I hear ya and see your point. Don't get me wrong. But these people should have known it was a scam on someone else. Who or how any Republic government ever got the idea they could give away pensions anyway is beyond me. In my mind it goes against the very fundamental value of why this Republic was formed anyway.
DeleteGiven that pensions came about around the same time as the fashionably of Marxism and that a favorite tool of the Marxist elites is buying power with other people's money is a least a correlation if not a causation(though you could probably get there with some study).
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