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Old 01-04-2013, 21:52   #22
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Originally Posted by jpa View Post
Yes, I understand in many cases the board is the owners of the business who have a direct stake in the success of the company but at the least are appointed by the ownership. In cases where they are not the owners, they have a fiduciary duty to the owners as you stated. However, they have no stake in the operation of the company and could do what they wanted as long as they were acting "in the best interests" of the company.

I know you're intentionally being dense on this parallel I'm drawing because you refuse to admit that it's the same thing.
I'm intentionally being dense on this because it wasn't a valid analogy and I was using "density" to illustrate that. Instead of picking the above excerpt apart, lets just let it go and address the meat of the issue:

Lawmakers have a fiduciary duty to be fiscally responsible when handling the taxpayers' money, wouldn't you agree?
No. They don't. I wish they did but they don't. If they did have such a duty they most certainly would have been jailed for creating most of these public pensions in the first place because by creating them they would have been in violation of it.

Furthermore, if they had a fiduciary duty at the present they would likely be in violation of it for allowing the pension funds to continue, and for most public employee union contracts.

A fiduciary duty is a legal obligation:

A legal obligation of one party to act in the best interest of another. The obligated party is typically a fiduciary, that is, someone entrusted with the care of money or property. Also called fiduciary obligation.

Read more:
The people who manage the funds within the pension plans DO have a fiduciary duty.

How is it fiscally responsible to knowingly incur debt and spend the money that was budgeted to pay that debt anyway?
Well, it isn't. I agree. However, your point is based on a fallacy. There is no debt if the legislators legislate it away.

In other words, taxpayer funds in public pensions are only guaranteed so far as the last law written to protect them. It is taxpayer money. The lawmakers can simply pass a law and re-allocate it. The taxpayers have a right to have their interests represented. If they, via their legislators, decide to remove taxpayer money, stop depositing taxpayer money or dissolve the pension (assuming not contractually bound), they have a right to do that and can do it.

I'm not passing judgement on it one way or another. I'm just saying they can.

However, current taxpayers/current legislatures cannot be bound by previous legistures. In other words, just because some legislature 30 years ago promised you a pension package, the current legislature can change that obligation and they should be able to. The current taxpayers were not represented by the previous legislature.

Truth be told, this is generally the biggest problem with public union contracts and public pension systems. Some politician years ago made an agreement to spend some other person's money in the future for their own political benefit today.

Just because they say "oh well, we spent your pension money" doesn't mean that the gov isn't still obligated to pay that pension. There have been court cases regarding that very issue. This is why changes to the pension system only apply to new members going forward, not to those already in the system. Because they would find themselves on the losing end of litigation.
Sure they can walk away from it. Courts may or may not rule against them. If they so choose, they can amend their respective constitution. Nothing with the government is iron-clad, and it shouldn't be. That's my basic point.

Remember that though we put judges in black robes and call them "your honor", they're still just lawyers and most of them are political hacks or politicians themselves. It is what it is.

I trust the government as long as its' employees fear going to jail or its elected officials fear losing election.
I don't. Government has proven it is untrustworthy. It has proven it does not have a fiduciary duty or even a "fiduciary mindset". I truly feel sorry for honest hardworking NECESSARY government employees who are put in this compromising postion. The good news for you folks is that in reality, not paying you would be political suicide in MOST cases. However, as the fiscal crises grow public opinion seems to be changing a bit as well and should the taxpayers send politicians to the state house with a mandate to relieve them of pension obligations, rest assured it will happen. I think it is highly unlikely though because the government pretty much has a monopoly on force and will bring as much pressure to bear on the taxpayers to force them to pay in order to protect their political status.

I believe the current legislators should honor the commitments made by prior legislators,
I do too, if possible. But I don't believe I should have to bail it out at any cost, as a taxpayer. You have to be conscious of the possibility that it may not be feasible at some point. No matter the reason or the malfeasance involved, there is a limit, unless the federal government starts bailing them out with printed money. Even still, there is a limit, you just might realize that limit slowly.

otherwise disband the entire system and refund my contributions (and those of everyone else).
I would vote for that in a heartbeat and put public employees on a 401k type plan with very conservative taxpayer contributions/matches, like the productive sector has.

I suspect that can't happen because it is mathematically impossible and would trigger collapse in any number of areas. So to that extent, we're all in it together.
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