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New Calls for Middle-Class Tax Hike to Pay For Gov't Pensions
STEVE FORBES: Some states will do this, some states will say no because they realize raising taxes will put their economies in an even deeper hole, short-term and long-term. What you're going to see is eventually new workers coming into 401(k)s, existing workers might pay more into their pension funds, extend their retirement age, or go from an old system to a new system – benefits you've accrued you get to keep, but after that you go into 401(k).
QUENTIN HARDY: Cast your mind back a couple of years, remember the financial crisis? And remember how we had to pay bonuses to people who had essentially destroyed the financial system and given us this recession because those were contracts? These are contracts too. If rule of law matters at all in this country, you have to honor these pension obligations. And if that comes down to raising taxes or the state going bankrupt and renegotiating these contracts, you'll raise taxes.
ELIZABETH MACDONALD: The facts are the government accountability office found they are not contracts. Most states do not have contractual obligations, they have basically rules that say these funds must be funded, but not how they are funded, that they have to be protected, but not how they have to be protected. More states are moving to 401(k) plans. Only 8 or 9 states you'll see contractual obligations for pension plans, but not for 401(k)s.
MORGAN BRENNAN: As much as I'd like to not see tax hikes to honor these pension agreements, and I completely agree that these programs need some reforms and it's great news that some states are reforming their pension plans, I just don't see how that's going to be enough. Two of the biggest looming threats are actually retiree health care and non pension benefits. I think taxes are going to have to be a part of this puzzle.
RICH KARLGAARD: I want to address Quentin's point. It is legally and ethically proper to void a contact when the contract is fraudulent. And it's fraudulent this idea that we can pay people who work, a policeman, for 20 years a $100,000 a year pensions for 40 or 50 years because the money is not there and was never there.
MARK TATGE: I think Illinois is going down the right path, they are raising taxes and owning up to an obligation. There's not only a legal obligation, there's also a moral and ethical obligation. Many other guests on this show are ignoring a basic fact and that is in exchange for low pay these people were given decent benefits. Yes we've dug ourselves into a big hole with this, but this is a contractual obligation that states and municipalities need to live up to.
New Plan to Pay People to Move Away From Disaster-Prone Areas
ELIZABETH MACDONALD: It is a good idea, this is a great idea for flood zones as well. Illinois, Missouri, these other states have it right though we don't know where tornadoes are going to hit, but if we know there's been a history of tornado activity in an area it would be a good idea to move people to safer places to live.
DENNIS KNEALE: It is a kind idea and it's a nice idea – the problem is it's a terrible idea, too costly, too complicated, you're talking about moving potentially millions of people out so we can save hundreds of lives over 40-50 years. I don't think this is the way to do it.
MARK TATGE: You have to separate two things here. One, you have to separate tornadoes from floods. We can't predict where tornadoes are going to hit, but we can predict what areas are going to flood. And over the past 40 years we have basically tripled about $4 billion a year in flood loses because we are developing wetlands. We are developing areas that flood. And we're giving people incentives, in terms of both crop and land incentives, to develop these areas. We need to stop this and relocate these people to higher ground. Let's take the money and move them out of the flood prone areas and put them in areas that do not flood. Wouldn't that make more sense? Otherwise the loses are going to continue to escalate.
STEVE FORBES: Tornadoes you don't know where they are going to hit, but on flood zones there are two things you can do. One is building codes, if it's in a flood area you don't have a code, if you do it has to be a fortress or something. And charge realistic insurance rates. That will solve the problem. Realistic insurance rates, proper building codes, problem solved.
QUENTIN HARDY: I go one step further from Steve. I agree there are building codes and they are a good idea – that's social engineering too and we seem to approve of this one. We're going to see more and more of this kind of thing as climate change creates greater and greater imbalances. We should just declare these live at your own risk zones. We'll rebuild once, but we won't rebuild 20 times.
MIKE OZANIAN: I don't think the government should subsidize housing. When the government subsidizes something it causes the price to go up. It doesn't matter whether it's housing, education…I'd like to see the private market take care of it. And like Steve said, if people want to live in a dangerous area let them buy insurance.
New Calls to Halt Financial Aid to Nations That "Hate Us"
KYM MCNICHOLAS: We have more than $1.6 trillion in debt here in the U.S. We're cutting off critical funds to millions of Americans, critical programs and yet we're sending money overseas to foreign governments that hate us. That doesn't make sense. Someone actually argued we need to for security purposes, but I say why give lunch money to the school bully. We need to eat.
MIKE OZANIAN: A very wise man once said, keep your friends close, but you're enemies closer. Look, I don't want to send our boys over there to die sometimes we have to pay people who don't really like us, money to do things we don't really want to do. And there are a lot of people in France that don't like us, but I don't think we should distance ourselves from the French either.
ELIZABETH MACDONALD: There is a lot of corruption. I think you're right, we saw that with Egypt, tens of billions of dollars being squirreled away. I say spend the money on aggressive audits, really see how the money is being spent.