Pay Our Pensions Or We'll Throw You In Jail: The Legalization Of Looting

Tyler Durden's picture

Submitted by Charles Hugh-Smith of OfTwoMinds blog,

Rather than deal forthrightly with the reality that unrealistic promises made to their employees cannot be honored, local government has pursued a strategy of legalizing looting.

The gradual erosion of civil liberties, legal rights and government ethics are connected: our rights don't just vanish into thin air, they are expropriated by government: Federal, state and local. Though much is written about the loss of civil liberties at the Federal level, many of the most blatantly illegal power grabs are occurring in local government.

This expropriation is under the radar of the average citizen because the process slowly chips away the fundamentals of legality and justice: bit by bit, due process and the rights of the individual have been eroded by state and local governments until the fundamental Constitutional protections simply cease to exist.

When local government looting is legalized, the entire system is illegal. Here are three recent examples of blatantly illegal looting by local governments.

First up: privatizing the collection of traffic fines and probation to create a modernized debtor's prison. We turn to The Nation for the story:

The Town That Turned Poverty Into a Prison Sentence Most states shut down their debtors’ prisons more than 100 years ago; in 2005, Harpersville, Alabama, opened one back up.

What happened to Ford in the small town of Harpersville was tangled and unconstitutional-- but hardly unique. Similar tales have been playing out in more than 1,000 courts across the country, from Georgia to Idaho. In the face of strained budgets and cuts to public services, state and local governments have been stepping up their efforts to ensure that the criminal justice system pays for itself. They have increased fines and court costs, intensified law enforcement efforts, and passed so-called “pay-to-stay” laws that charge offenders daily jail fees. They have also begun contracting with “offender-funded” probation companies like JCS, which offer a particularly attractive solution—collection, at no cost to the court.

Harpersville’s experiment with private probation began nearly ten years ago. In Alabama, people know Harpersville best as a speed trap, the stretch of country highway where the speed limit changes six times in roughly as many miles. Indeed, traffic is by far the biggest business in the town of 1,600, where there is little more than Big Man’s BBQ, the Sudden Impact Collision Center and a dollar store.

In 2005, the court’s revenue was nearly three times the amount that the town received from a sales tax, Harpersville’s second-largest source of income. Fines had become key to Harpersville’s development, but it proved difficult to chase down those who did not pay. So, that year, Harpersville decided to follow in the footsteps of other Alabama cities and hire JCS to help collect.

It was a system of extraction and coercion so flagrant that Alabama Circuit Court Judge Hub Harrington likened it to a modern-day “debtors’ prison.”

Her fines for the three charges added up to $2,922, court papers show. Ward sentenced her--and others who said they couldn’t pay their full fines that day-- to probation. Once a means of allowing convicted offenders to stay out of jail on the condition of good behavior, probation had now become a court-sanctioned tool for debt collection.
Burdette reported to the JCS office in nearby Childersburg, where she paid her probation officer $100. Of that, $45 went toward her fine, $10 toward a one-time “start-up fee,” and the last $45 went to JCS as a monthly fee for service.

Next up: illegal search and seizure under the pretext of traffic violations. As if "driving while black" isn't bad enough, now "driving with cash" is pretext enough to be stripped of your rights and your property stolen by local government:

Lawsuits over cash seizures settled in Nevada

Tan Nguyen of Newport, Calif., and Michael Lee of Denver said in lawsuits filed in U.S. District Court in Reno they were stopped last year on U.S. Interstate 80 near Winnemucca about 165 miles east of Reno under the pretext of speeding. They said they were subjected to illegal searches and told they wouldn't be released with their vehicles unless they forfeited their cash.

The lawsuits claimed the cash seizures were part of a pattern of stopping drivers for speeding as a pretext for drug busts in violation of the Constitution.

Nguyen was given a written warning for speeding but wasn't cited. As a condition of release, he signed a "property for safekeeping receipt," which indicated the money was abandoned or seized and not returnable. But the lawsuit says he did so only because Dove threatened to seize his vehicle unless he "got in his car and drove off and forgot this ever happened."

"He wasn't charged with anything. He had no drugs in his car. The pretext for stopping him was he was doing 78 in a 75," John Ohlson told KRNV-TV. "It's like Jesse James or Black Bart," he told AP in an interview last week.

The district attorney's statement said both men were stopped legally and that "every asset that was seized pursuant to those stops was lawfully seized."

Exhibit # 3: guilty until proven innocent: State of California seizes cash from "suspected" tax evaders with no evidence, no court action, no recourse. I have documented in detail how the jackboot of the State of California has pressed on the necks of thousands of law-abiding citizens whose only crime was moving out of California.

The State of California presumes anyone moving out of the state who still has a source of income in California--for example, a few dollars of interest earned on a bank account--owes California income tax on all their presumed income, even if they have filed income tax returns in another state.

If this isn't the acme of illegal seizure and denial of basic rights, i.e. presumed innocent until proven guilty, then what is?

Here is one reader's account of how this legal looting works: I wrote about this inWelcome to the United States of Orwell: Law-Abiding Taxpayers Are Treated as Criminals While the Real Criminals Go Free (March 27, 2012).

I received a letter last year that we owed the state of California's Franchise Tax Board $90,000 for taxes in the year 2008.We replied to the Franchise Tax board in a similar manner as RT stating that:

-- Did not reside in California in 2008
-- Did not file a State income tax return in California in 2008
-- Did not have any outstanding tax issues with California in 2008
-- Did no business in California in 2008
-- Owned no property in California in 2008


The CA Franchise Tax board responded by putting a lien on us in the state - fortunately, our banks and assets have no business in CA or I am certain our accounts would have been robbed as well.


After a great deal of uncertainty and angst, I found an accountant in CA who advised us that we needed to file a complete CA tax return for 2008 even though we did not owe any tax. We filed the return and received a response that we owed the state $625 to cover the State's collection fees. We paid the fee and within two weeks received a "refund" check for the $625.

On reflection, we felt as if we had been "held up" by some powerful gangsters and if it had not been for an honest tax accountant we would have suffered much financial damage.

In other words, honest taxpayers are reduced to begging the predatory state of California to return their own money. Meanwhile, the bagmen for the local government thieves, Wells Fargo and Bank of America, among others, get to keep the $100 fee they charged the taxpayer for stealing their money. If this isn't Orwellian, then what do you call it? "Legal"? If this is legal, legality has lost all meaning.

For more on the blatantly illegal seizures of cash from people who aren't even residents of California and who filed income tax returns in another state, please read:

Welcome to the Predatory State of California--Even If You Don't Live There (March 20, 2012)

The Predatory State of California, Part 2 (March 21, 2012)

Just as pernicious as outright looting is the growing dependence of local government on fines and related rip-offs. Correspondent Joel M. recently submitted this article which features New York City officials whining that the recent snow storm deprived them of sorely needed revenues from parking fines.
Costs Have Piled Up Along With the Snow of a Difficult Winter (

"If the winter was costly for individuals, it was even more so for municipalities. The snow triggered repeated suspensions of New York City’s alternate-side-of-the-street parking rules, delighting car owners but costing the city an average of $270,000 a day in potential fines, officials said. That added up to $4.3 million during a three-week stretch in February alone, money that would have gone to help pay for city services, including the fire and police forces, city officials said."

Everyone who believes local government is "here to fill potholes and help disadvantaged people" needs to wake up and ask what kind of government we have when due process has been replaced with "legal" looting. Is local government focused on serving citizens or on funding public employee pensions and healthcare benefits?

The erosion of ethics of those in government service is as pernicious as the rise of legal looting. Let's be honest, shall we? Those in local government tasked with collecting all these forms of legal looting are "just doing my job," but how many protest the process? How many public employee unions are outraged by the legal looting that fills the coffers of their pension funds?

For context, government employees constitute about 15% of the employed workforce in the U.S.: 22 million out of 142 million. Unlike the other 85%, their employer can legalize looting on their behalf.

Local government spending has soared for decades.

So has local government debt.

Promises were made to local government employees by craven, bought-and-paid-for politicos that cannot possibly be honored in a stagnating economy with widening wealth inequality. But rather than deal forthrightly with that reality, local government has pursued a strategy of legalizing looting.

From the point of view of the hapless tax donkeys and debt-serfs being looted, this strategy boils down to a stark threat: Pay Our Pensions Or We'll Throw You in Jail.

Here's the deal: government is supposed to serve the people, not the insiders. Please read the above news stories; can anyone claim that legalized looting is OK because the "ends" (public services) justify the "means" (legalized looting)? How many public employees care about where the money that funds their paycheck, pension and healthcare benefits comes from?

Maybe public employees should start caring about where the money is coming from, because taxation approved by elected officials or direct voter approval is one thing, and legalized looting is another. If you don't care that your pay/pension/benefits may be partly funded by legalized looting, perhaps you should start caring.

Remember that we (the general public) can't pull you over and "legally" steal your cash, nor can we order Wells Fargo to go into your bank account and "legally" steal your money without court review, evidence of wrongdoing or recourse. We can't award private collection agencies the powers reserved for representative government and rig the probation system into a cash cow that benefits us.

Please don't trot out the "good German" excuse: I only take orders. You're the ones who are pulling the levers of the legalized looting machine; us tax donkeys and debt-serfs are on the receiving end. Given that special interests own the state legislatures, the tax donkeys and debt-serfs have only three choices: opt out, move out or stop paying, and fill your modern debtors' prisons to the brim.

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I need Another Beer's picture    It will help U understand

Freddie's picture

Mark Levin likes amnesty Rubio and amnesty Ryan.  No thanks.  Another dual citizen and NeoCon.

knukles's picture

My uberliberal state of CA, local, etc., employee buds, the very one and the same from the hippie dippie counter culture, now Progressive Democrats, big goobermint, laws and regulations as to how you shit, Preaching Freedom, Equality, Democracy, Social Justice, et fucking cetera, are the very one and same when confronted with the absolute appalling largesse of their salaries, health care, pensions and post retirement health care benefits sound exactly the same as the hedgies and private equity bazillionaires, "That's Mine I Worked (sic) for It and You Can't Take It Away From Me, Fuck You, Mr Taxpayer."

Hypocritical assholes
Plain and simple fucking theft which they view as an entitlement.

Fucking theft at the point of the governmental spear.

bcups's picture

Let's see how this works out for the leeches in Detroit. 

pods's picture

Just another example that the police are not on your side.

They are on the side of the government.  

Sticking a gun in your face and saying sign this over to the police and the DA calls it lawful?

Gonna be ugly when this goes down.  Fucking blue uniforms are going to be burned with their shitstained undies.


Ifigenia's picture

"It is pretty clear that this last sentence expresses Russia's view on the level of civilizational and cultural degradation the AngloZionist Empire has imposed upon the people of Europe and the USA. Furthermore, when Putin says that “destruction of traditional values from above not only leads to negative consequences for society, but is also essentially anti-democratic, since it is carried out on the basis of abstract, speculative ideas, contrary to the will of the majority” he is clearly stating that the AngoZionist Empire is not ruled by the people which live in it, but by minorities, special interest groups, behind the scenes lobbies and cabals who impose their warped agenda upon the rest of the people." in The Vineyard of the Saker

It is a dangerous path that the politicians of the West, controlled by a few, but rich, chosen people, want us to follow.

JLee2027's picture

Once a means of allowing convicted offenders to stay out of jail on the condition of good behavior, probation had now become a court-sanctioned tool for debt collection.

Same with child support. Pay or go to jail. It's all against the Constitution (indentured servitude is illegal per the 13th Amendment) You have to out-determine the bastards, even they have limited resources. Fack them!

Real Estate Geek's picture

+1 just for the (sic), which made me snort with laughter!

Nostradumbass's picture

So what about the worker in a public agency who is skilled in a trade, sees to it that the water/power etc. are delivered to your door, pays 14% of his/her gross pay into a pension system for decades and expects to receive the pension he/she signed up for? Fuck off?

Not all are leeches...

FredFlintstone's picture

That would be inhumane. Just convert them to the Social Security system and then make them work 10 more years.

Nostradumbass's picture

Social Security is an anti-poverty program, not a retirement system. 

FredFlintstone's picture

Yep, we don't want the retired public servant living in poverty, do we?

Raymond K Hessel's picture

I don't mind pensions.  What I mind is the retirement age being so low.  No one should retire at 45 with money that was sourced from taxes.  

And the SS program is a joke.  It should be repealed.

Canoe Driver's picture

Then why does Steve Wynn collect it, retard?

toady's picture

Agreed. I dislike this version of divide-n-conqure more than most. Public vs private employment just pits two groups of poor people against each other. These groups would be better off paying attention to the man behind the curtain.

Canoe Driver's picture

Sorry, but all ARE leeches, even though some may not understand why.  If the money you were planning to pull out was equal to the 14% plus a reasonable rate of growth, then it would still be too much because your salary was unreasonably high. But at least it would be your money. As it stands, it's not.

Nostradumbass's picture

You are four years old. Your mother crosses the US-Mexico border illegally with you and your sister and you are raised in a suburb in southern California. You attend public school through high school and your English is perfect. You had no say in your being here illegally and in fact, did not know until you were in high school.

You cannot get work legally though you are a bright, honest, caring young man of 26.

Fuck off?

True story. I know this person.

Raymond K Hessel's picture

The problem of immigration is that there are so many benefits being paid for by taxes and debt (future taxes) that people feel not paying in to the system is wrong.  

If there were a way to square that circle, more people would be for immigration, not against it.


Then there's that visa program that MSFT and Silicon Valley are pushing.  That's complete shipping jobs overseas.  That needs to stop STAT.

mofreedom's picture

Then his government owes us for the edu, meds and ebt or we come and get it.

Canoe Driver's picture

He should be out of luck, and should blame his mother for it. Also, he should go to Spain and marry an EU citizen. That's the way it works, genius.

Nostradumbass's picture


He'll stay here in the only country and culture he has ever known. He'll use fake documents to drive an automobile, do what he can to find employment and hope for someday when intelligence leads the people to let him become a tax paying citizen. The culprits are business and government - not him.

You should actually meet someone like him before you harden your heart and close your mind - I once thought like you...

mofreedom's picture

Neither the amnesty part nor the bohnor-loving part Levin like so stop with the straw man.

Balanced Integer's picture

Lies and bullshit. If you ever listened to his show, you'd hear how he gives a hard time to themb oth over amnesty. Ryan in particular about the so called "bipartisan budget deal."

chemystical's picture

I doubt that he's a dual citizen (unlike so many of his wormy brethren), but the ADL, AIPAC, etc, all know what you meant by that :)

Maybe some day we'll be free to stop using code words like that.

He's the same false dichotomy as (D):(R).  No different than controlled opposition, or the idiots who pat themselves on the back and think that calling themselves (I) means they get to choose either (D) or (R).

"Curiously" Levin never mentions his over-represented co-religionists as being amongst the problems.  No one with air time does.  Them thar dang Mooslims, however, well, they are the real problem and those with air time never fail to remind you of that "fact".

Surging Chaos's picture

You do realize that Mark Levin is a dyed-in-the-wool neocon, right?

Once you peel the constitutionalist veneer off of him, you reveal Levin for what he truly is: another statist talk show host.

EDIT: Ah yes, here come the downvotes. Let's see if those red arrows come out of the woodwork.

Greenskeeper_Carl's picture

Surprised this got the red arrows, I wouldn't have figured there would be a bunch of mark levin fans on here. I used to like what those people said until I realized a couple years ago that they were full of shit. They were A-OK with all this warfare, patriot act, extraordinary rendition, domestic spying, when it was done by bush. It's only now that it's a democrat doing it that it becomes illegal and immoral, and they suddenly remember the constitution after not giving a shit for the last 8 years. You are right, it is only a veneer of constitutionalism. A consistent person who actually cared about Te constitution and the immorality of the police state would have been speaking up about this long before Obama moved into the White House. Mark levin is full of shit

pods's picture

They are merely the opposite side of the same coin.

Pukes, all of them.


Greenskeeper_Carl's picture

I guess I should be surprised there are a bunch of mark levin fans on here, now that I think about it. When myself and a couple others dared to question the wisdom of Sarah Palin a couple weeks ago we were flooded with red arrows. I've been reading this site for a couple years, but only been participating in the discussions for a few months now, but I have noticed a lot more of the neo con palin/levin types here lately.

pods's picture

Wait until the Rep primaries.  I usually diappear for a while then when the next non-savior is hoisted upon us.  RP excluded there are maybe 3 who actually are constitutionalists. (other two are not elected and local guys here)

The red green thing is part popularity contest.  Shoot for an even amount and you know you are getting somewhere. Piss off enough and that is a good thing.


Greenskeeper_Carl's picture

Haha there's the red arrows. Not trying to win any popularity contests. Id just end every post with 'palin 2016', probably get nothing but greens. And I meant to say "I SHOULD NOT be surprised about the neo con" in the above post. And ya those primaries should get entertaining on here. Although the red/blue debate does get quite tiresome. I don't mind the red arrows, but I just wish the down voters would take a minute and explain to me how it is that what I said in the above posts was wrong. How exactly are mark levin or Sarah palin or the rest of the red team pretenders NOT full of shit?

sylviasays's picture

and many of us have noticed a lot of senile old Palin haters and neo-Marxist fascist pigs lately here too!

Tim_'s picture

Mark Levin is a jew.

Mark Levin Net Worth

"Levin was born on September 21, 1957 in Philadelphia, Pennsylvania to a Jewish family."

Mark Levin - Biography

"Polar opposite of fellow Jewish-American, Alan Colmes."

Balanced Integer's picture

Oh noes!! NOT A JOOOOOO!?!?1?



What is it you people have against every Jew? Are you all so certain that they are all a part of the Great Jooish Conspiracy, to strip you of your wealth and liberties, to force-circumcise your foreskins and rape your daughters anally with candelabras?

Come to think of it, I'm not sure many of you can even spell "conspiracy" without spellcheck.

chemystical's picture

"What is it you people have against every Jew?"

Oy the irony.  "You people"?  No generalizing there, eh?

"...every Jew"?  Might want to brush up on your reading skills (while you comment on someone's spelling skills.

Otoh, if only 2% of the US population wore polka dot orange shoes and purple striped ties, but 1/3 of the folks you see on the boob tube were so attired, and if 1/3 of the folks who are kicking you in the nuts and picking your pocket and corrupting the minds and souls of you and your children were so attired...then you'd call that a coincidence, right?  Uh huh.  I call it a cohencidence.

rubiconsolutions's picture

Mark Levin? He's a fascist Irving Kristol / Leo Strauss neoconservative who speaks about liberty but doesn't know the first thing about it. His book, "The Liberty Amendments" is the most atrocious piece of garbage ever written. He has no problem continuing the practice of stealing by way of direct taxation, just wants it "capped at 15%." Yeah, like asking a rapist to just stick it in part of the way.

sylviasays's picture

neo-Marxist fascist pigs are quick to attack and label anyone whom they disagree with 

RonBurgundy's picture

Why should pensions come behind speculative actions like bonds? Pensions are contractual--deferred compensation. To abrogate them wholesale is to attack the rule of law. Beyond that its exactly the plan of the banksters. They'll always get theirs. They'll just get you to agree first that the middle class has to be put out of existence, because its "necessary."

steelhead23's picture

Whether bondholders or pensioners have stronger claims to municipal assets is being discussed in the Detroit bankruptcy case.  The argument here is different.  Mr. Smith is arguing that abusing individuals, be it outright looting, or debtors prison, is an afront to our liberty.  I think he's right.  What say you?

I tend to think that bondholders and pensioners have equal claims and Detroits assets should be divied up that way - but, like you, I doubt it will work out that way.

centerline's picture

Get real.  You know how it works.  Everyone except the insiders are unsecured creditors.  Last in line.  Wont collect.  End of story.  

If you don't know the names of the players on a first name basis - guess what?  Your an outsider.

Laughable to think that future generations will pay for anything.  It is coming much faster than that.

RonBurgundy's picture

true dat. so let the grey hairs have their gruel, and give the finger to the insiders at least once. Again, the threat here for the Gummint is that the hedge funds invested other pensions in these bonds at some level. 

Greenskeeper_Carl's picture

"Hedge funds invested other pensions in these bonds"
You know they did. It is all one big circle jerk, with all the local govts invested in each others garbage bonds. Eventually the real value of these bonds will be laid bare, and it will be a fraction of face value. Once the default train starts rolling nothing is stopping it. Unless the next round of QE starts gobbling up muni bonds....

centerline's picture

Once that wave really hits there will be nothing to stop it. And dont think for a moment the political class doesn't know it.  The entire financial system is rigged to blow (e.g. counterparty exposure).

Anusocracy's picture

Government is the primary affront to our liberty.

Accounting101's picture

So it's not the Oligarchs? I thought they controlled the government.

RonBurgundy's picture

Not really, because no one is going to get "anything" as you know. The only people in the real term who are going to pay for the ponzi are pensioners and the middle class--for everyone else, well, only TPTB get deferred compensation, as every "resolution" of insolvency has demonstrated. Greece. Cyprus. AIG. Dont fall for the lie

MeelionDollerBogus's picture

These pensioners, are they really middle-class? Or will those pensions rob the middle class and make their recipients massively rich?
Pension is a ponzi. I wouldn't agree to it in the first place knowing a) my wages aren't paid until later in life and may never be paid and/or b) my pension can be paid only by robbery of another

TheReplacement's picture

Fine.  Print them some dollars (devalue the dollar hugely, say to 0) and pay them off.  That is what they agreed to.  We never agreed that they could take my house because if they aren't willing to accept less and if the dollar doesn't go to 0 then that is what is going to have to happen - you and your pals coming with guns to take my house. 

What part of "there isn't enough money" don't you understand?


EDIT:  NVM, you got me.

A Nanny Moose's picture

Rule of Law was broken by stealing from the productive and unborn, in order to give to the unproductive, and when the idea of 8% growth rates were fraudulently foisted upon pensioners. You cannot paint picture of ethical behavior, when funding is the result of theft, and growth claims were outright fraudulent.

Rule of Law is irrelevant when juxtaposed to nobody having any money.