Re: RE: pensions and the stock market

[Michael Perelman <michael@xxxxxxxxxxxxxxxxx>]

Max, I think that you are corect.  My question had to do with the real
consequences of a stock market flop.  The pension linkeage implies that
either profits take a hit or that firms cut back on pensions.  I think
that we know which is more likely.

On Mon, Jan 01, 2001 at 12:05:13PM -0500, Max Sawicky wrote:
>
> My impression from a distance is that firms can
> back pension surpluses/losses into their profit
> totals, so there would be tax consequences.  But
> not necessarily budget consequences, since corp
> taxes are a small share of total revenues and not
> a big factor in revenue growth and budget surpluses.
>
> The surplus, net of inflation-adjusted spending
> growth, is being moved up from $4.6 to over $5 trillion
> over the next 10 years.  It hasn't begun to disappear yet.
> There's plenty of money for a progressive tax cut.
>
> mbs
>
>
>
>
> I have a question about pensions.  A couple days ago, the Wall Street
> Journal had article about companies' manipulations to lower pensions.  I
> suspect that the massive stock market run-up had a major impact in
> creating surpluses for many pension plans.  Now that some of those
> surpluses are disappearing, what will the impact be?  Lowering benefits or
> a reduction in profits to make good the disappearing surplus?
> --
> Michael Perelman
> Economics Department
> California State University
> Chico, CA 95929
>
> Tel. 530-898-5321
> E-Mail michael@xxxxxxxxxxxxxxxxx
>

--
Michael Perelman
Economics Department
California State University
Chico, CA 95929

Tel. 530-898-5321
E-Mail michael@xxxxxxxxxxxxxxxxx