The U.S. government is doing something every bit as bad. The congressional morons reduced the Social Security Payroll Tax at a time when it needs instead to be increased by two cents on the dollar! They are trying to put more money in the pockets of the poor and lower middle class to buy some votes and stimulate consumer buying. Of course a cut in the lower bracket tax rate doesn't quite do the same job because the poor don't pay income taxes, so cutting their tax rate while making their paycheck look larger, would have just reduced their refund. What the morons in Congress should have done was raise the upper bracket rate back to Clinton era level (~4% increase), as Obama asked for, raise the earned income credit, and lower the tax rate of the lowest bracket to achieve much the same thing. Or they might have considered ordering fewer obsolescent F-35 fighters by knocking out 1/3 of the Lockheed Martin F-35 budget which would save 120 billion, and then just send out checks a'la our former idiot President, the "W". What a Country! God Bless America!
Pension nationalization will eventually happen to shore up the bond market after the dollar implodes. The idea has already been kicked around. I think that's what they did in Argentina? The same thing will happen in Europe if they can't get their deficits under control and opt to print, which appears to be the road they're going down. Physical gold and silver looks like a very good long-term investment. They'll probably try to confiscate that, too.
I thought we approved of taking away of some of the especially generous benefits from the public sector employees?
Well, that is precisely what's happening here... The previous UK govts (esp Labour) have promised retirees (esp in quasi-govt companies, like Royal Mail, British Airways, British Telecom, etc) extremely generous "defined benefit" pensions. As time went on, it became increasingly obvious that a) these pension provisions are unrealistic; moreover, b) these pension liabilities encumber an otherwise viable company with a sort of a "poison pill", which makes it impossible to privatise. So, simplistically, the current Conservative govt is trying to put an end to this by a) taking over the pension liabilities and eventually cutting some of the excessively generous benefits; b) privatising/selling the operating business. Personally I think it's the right thing to do.
No argument here. My post was in reference to private pensions. Not public sector pensions. I would bet the farm, within 5 years, the US (and probably most EU states) will nationalize private sector pensions as deficits explode.
Yeah, although it's a bit more tricky to separate "public" from "private" in the UK. Still it's relatively clear in the case of Royal Mail. This here is more of the same: http://www.telegraph.co.uk/news/ukn...kers-lose-pension-battle-with-government.html
Interesting. I have zero sympathy for public sector compensation, there or here. It's legal theft. All these paper promises will soon be meaningless anyway, as the Greeks have discovered.
You'll get no argument from Mr. Blankfein on that. He is as convinced as you that public sector compensation is way too low, and that private sector is the way to go. Let's put a stop to that "legal theft", as you put it, from the employees.