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States Turn To Pension Ponzi Scheme To Close Funding Gaps
One thing we’ve covered quite extensively of late is the growing fiscal crisis facing state and local governments in the US.
To recap a few of the more important (and amusing) stories, recall that Chicago recently saw its debt downgraded to junk status by Moody’s after the Illinois Supreme Court struck down a pension reform law which would have paved the way for Mayor Rahm Emanuel to push for similar changes in Chicago where underfunded pension liabilities are set to triple by 2018. Adding insult to injury, Moody’s decision also triggered some $2 billion in accelerated payment rights for the city’s creditors and jeopardized the refinancing of some $900 million in floating rate paper.
Meanwhile, in Kansas, GOP Governor Sam Brownback’s tax cuts have backfired, helping to blow an $800 million hole in the state’s budget resulting in cuts to education and proposed worker furloughs and prompting one angry waitress to advise Brownback to “tip the schools” rather than his server.
Down south things aren’t much better as falling oil prices have plunged Louisiana into a $1.6 billion fiscal abyss that’s now threatening to bankrupt LSU.
Visually, the situation looks like this...
Now, lawmakers fear the Illinois Supreme Court may have set a precedent that will hamper efforts to cut pension costs meaning state and local government officials will need to figure out alternative ways to plug the holes and as you might have guessed, option number-one is ...drumroll… more debt.
The New York Times has more:
Facing a shortfall of more than $50 billion in his state’s pensions, and with no simple solution at hand, Gov. Tom Wolf of Pennsylvania is proposing to issue $3 billion in bonds, despite the role that such bonds have already played in the fiscal woes of other places.
And he is not alone. Several states and municipalities are considering similar action as they struggle with ballooning pension costs.
Interest in so-called pension obligation bonds is expected to intensify in the wake of a recent Illinois Supreme Court decision that rejected the state’s attempt to overhaul its severely depleted pension system. The court ruled unanimously that Illinois could not legally cut its public workers’ retirement benefits to lower costs, forcing lawmakers to scramble for the billions of dollars it will take to keep the system intact.
While the Illinois ruling is not binding on other states, analysts think it may influence lawmakers elsewhere to look to alternatives to cutting public pensions…
“My reaction was, ‘Yeah, that’s going to play here,’ “ said John D. McGinnis, a lawmaker in Pennsylvania, which has also been diverting money from its pension system, setting the stage for a crisis as more and more public workers retire. The state has no explicit constitutional mandate to protect public pensions, as Illinois does, but that is irrelevant, said Mr. McGinnis, a Republican and former finance professor at Pennsylvania State University.
“The judiciary in Pennsylvania has been solidly of the belief that there are ‘implicit contracts,’ and you can’t deviate from them,” he said. If lawmakers in Harrisburg were to unilaterally cut pensions now, he said, they could be taken to court and be dealt a stinging rebuke, like their counterparts in Illinois.
'Solving' this problem by issuing bonds is an enticing option but at heart, it amounts to what one might call a "pension liability-bond arbitrage." The idea is to borrow the money to plug the pension gap and invest it at a rate of return that's higher than the coupon on the bonds, thus saving money over the long-haul.
Of course, much like transferring a balance on a high interest credit card onto a new card with a teaser rate (or refinancing a high interest credit card via a P2P loan) this gimmick only works if you do not max out the original card again, because if you do, all you've done is doubled your debt burden. As it relates to pension liabilities, this means that what you absolutely cannot do is use the cash infusion as an excuse to get lax when it comes to pension funding because after all, that's what caused the problem in the first place. Here's NY Times again:
Fiscal analysts say it is possible, in theory, to shape a pension obligation bond deal responsibly, but that is not what they usually see.
Instead, the deals are typically used to make troubled pension systems seem a little less troubled for a few years, allowing elected officials to celebrate a pension reform without having to make the system sustainable over the long term.
The flood of cash from the bonds may also tempt officials into taking a break from their pension-funding schedule — the very action that has caused so much pension distress to begin with. Skipping annual pension contributions produces an off-balance-sheet debt that can start growing exponentially.
Aside from the rather obvious fact that borrowing huge sums of money to paper over problems has a tendency to promote the very same type of irresponsible behavior that got the borrower into trouble in the first place thus setting the stage for a scenario that ends up being twice as bad as it was initially, there's also the fact that, as documented in these pages extensively, investment return assumptions for public pension plans are often at odds with reality. That is, projecting a 7% return in a world governed by ZIRP and NIRP means that in the best case scenario you are being absurdly optimistic and in a worst case scenario you're likely taking greater risks in an effort to maximize returns. Reinforcing the latter is the following graphic which shows the extent to which pensions have moved increasingly into riskier assets over time in an effort to stay solvent in a low rate environment:

And, for those who missed it, here is a sampling of the return assumptions from Chicago's local government pension plans (ask yourself how one can possibly hope to hit these targets by investing conservatively in today's markets):
As for pension obligation bonds well, they aren't necessarily something you want to get involved with if you're a yield-starved investor because as it turns out, helping broke states and municipaltiies perpetuate pension ponzis sometimes ends very poorly:
After declaring bankruptcy in 2013, Detroit sought to have $1.4 billion of pension obligation bonds voided outright, saying they had been sold illegally in 2005 and were not enforceable. Ultimately, Detroit settled the debt for about 13 cents on the dollar, the lowest recovery rate of any of its bonds.
Meanwhile, in San Bernardino, California (a city which still finds $650,000 to pay off victims of post-horse chase police brutality), investors learned the pension obligation bond lesson the hard way.
Via Bloomberg:
U.S. Bankruptcy Judge Meredith Jury on Monday threw out a lawsuit in which investors had claimed their pension bonds must be paid off at the same rate as the California Public Employees’ Retirement System in the San Bernardino bankruptcy. The $304 billion fund is the biggest in the U.S.
Jury acknowledged that her decision may discourage investors from buying pension-obligation bonds in the future.
“What I see as unfair, and might seem unfair to the outside world, does not matter under law,” Jury said, referring in part to the powerful remedies Calpers can seek if the city doesn’t honor its contract...
An investor who buys pension-obligation bonds “is just asking for trouble,” said Cohen, who manages $345 million for individual investors. The cities’ bankruptcies show that pensioners and municipal employees have an advantage over bondholders, she said.
In the end, at least one concerned Pennsylvania citizen (who is ironically a retired state employee) gets it and because we appreciate his candor, we'll give retired accountant Barry Shutt the last word:
“When you’re borrowing money for pensions, you’re getting a new credit card to pay off the old one, and you still haven’t paid off the old one.”
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Don't like the output? Change your inputs.
<That was easy.>
You suggesting that if we input fiat tax dollars (IOU's) instead of hard earned tax dollars that might help?
Ha, no I think he means that if you ain't lookin for the 'easy' then you're not a good 'merican government employee.
I'm thinking none of this ends well. And I'm also glad that I control my own retirement rather than letting some pension be the one that decides I cannot under any circumstances ever retire.
Never loan money to fools who cannot pay you back, this includes labor for pensions. Did you ever ask yourself why public workers get the best pensions? Simple the governments can’t afford the labor, so they write you an IOU. As with most government schemes it is just a scam.
I’m sorry to say but as with any con, the con man should go to jail (state govt officals) the victim (pensioners) should eat the losses, and people who didn’t have anything to do with the con (future taxpayers) should have nothing to do with any of it.
Ponzi schemes are not inherently void, they are illegal because legislatures have made them illegal. If certain Ponzi schemes (such as looted pension plans) are declared legal then they are legal by definition, and those entitled to collect need to be made whole. They're not "owed" the money, it's already their money.
Pensions are nothing less than money already earned, paid and held in trust by mutual agreement between employer and employee. Failure to pay a pension is worse than merely reneging on a contract, not merely failure to pay a supposed debt, it is failure to disburse wages--canononical criminal theft. If the employer has to pick someone else's pocket because the funds held in trust were squandered, so be it. This same logic needs to be applied to banks holding deposits. If a bank fails and is unable to give depositors' money back, the bank principals should be treated under criminal law exactly as if they broke into people's homes and ransacked them for cash and valuables.
Attacking pensions is an attack on property rights. Pension holders have an inalienable property right in the wages they earned and set aside inside the pension system.
The problem with your logic is that the pensioner never "earned" the pension in the first place. The only way your logic works is if the pension was deducted dollar-by-dollar from their paychecks, and put in a savings account for their later use. That didn't happen. What did happen is that they were paid a wage, and then promised an open-ended ENTITLEMENT once they retired.
Shit, even if the money was put into the bank, it wouldn't create an obligation. It is a well-known fact that bank depositors are merely unsecured creditors of a bank. Given that a municipal government hardly meets the legal definition of a bank, a pensioner is something even less than an unsecured creditor.
The Supreme Court has ruled that Social Security is not a savings plan, it is an entitlement benefit that can be curtailed or even eliminated at the whim of the Federal Government, no matter how much money you as a person "paid into" the system. If the Supreme Court won't even stand behind Social Security, what makes you think they would stand behind state or municipal pensions??
Not necessarily true: in many defined benefit public pension plans the employee does indeed contribute to the pension plan by a pre- tax deduction from wages; the balance is paid into the plan in addition to wages. The proportion paid by the employee varies.
Supposing your take is correct (though I do disagree with aspects, for sure) then from where will the dineros come?
In private scenarios, you cannot make the public pay.
In public scenarios, the pensioner is the person who voted for it. Morally, you cannot hold succeeding generations liable for the debts of their elders that the elders promised to pay themselves.
Either your dear pensioners are hosed or the rest of us are hosed. I vote for them since they made the decisions. We are all, firstly, responsible for ourselves. They voted to put responsibility for their future retirements on the backs of younger generations without their consent. Shame on them.
I do feel bad for their suffering to come but the piper is on his way and the money just does exist.
Caveat: Janet could get out the helicopter and rain down some QE to the pensions (banks holding the funds that is). If that be the case, enjoy your $50 happy meal on that $1,500/month pension.
QE it shall be - insofar as the FED will buy the pension obligation bonds.
+1 -> so fucking simple, a gs5 can understand it!
As an aside, this is late-stage bullish (or bearish if you're a contrarian) stock market behaviour.
These bonds are sold as the article correctly states as an arbitrage. You borrow at 5% and reinvest in the stock market at 9% (or whatever the assumption is.) Obviously this only works if stocks go up.
This is exactly what you see in the late stages of a bull market.
I got an idea! Let's take on some more debt!
Gosh! Why didn't I think of that?
Gee, I dunno, but maybe you oughta be a politician with that kind of um ... uh.... kind of solid um .. uh . ... insights and creativity when looking at fundamentally complex problems and uh ... mmmmm ... coming up with really ... ah .......... uh
Fuck, you know what I mean.
Like giving each of the hungry folks a frozen Claim Jumper's Pizza
Say, what time's the private jet leave for the island? Bill and Menendez are coming this week, no? Parteeeeeeee with the chickies!
All Depends on your propective: Borrow at less than 2% with a fix rate loan 20yr loan. Wait for the inflation genie to exit the bottle, then pay off the loan in inflationary economy. That said I doubt Politicans are "that smart". I am sure they are aware of the problem, but by the time the loan comes due, the poliications will be out of office and it will be someone elses problem to deal with.
well, it the fed wasn't around, with it's tally-wacker in the open window, it might require a bit more creativity.
At the end of this shitstorm (and believe me, it WILL be a shitstorm of epic proportions) the choice will come down to funding current basic services- police, fire, water, sewer, power- or paying pensions. Then and only then will pensions lose. However, this will only be done after all other options have been exhausted. Including cutting services to a bare minimum, selling state-owned assets (PA is going to privatize their liquor stores eventually because they will be FORCED to, not because it's the right thing to do), raising taxes in every way possible and asset seizure laws so draconian you don't dare leave a bank account inactive for even three months.
If you're young enough right now you WILL live to see the day when "I was PROMISED!" is met by the middle finger. You may not believe me, but it will happen. You will barely crack a smile, however, because you're not going to like how things look across this land by the time it happens.
it'll also cause a discussion about pensions in the basest sense - ie, why have them at all? which is long overdue. all (govt) compensation should be in annual salary so it's clear to taxpayers what exactly they're paying, and those govt employees will simply have to save for retirement just like us serfs do. most people would freak if they knew that some $100K cop was really getting an amortized $250K.
pensions are just a liability to future citizens, but one which those citizens didn't vote for. i almost think they should be voidable for just that reason. in the same way congress can't bind a future congress, state/local governments shouldn't be able bind future reps to mandated expenditures 10, 20, 30 years out. states will still do their best to honor their obligations so that credit is available to them. but, using illinois as an exmaple, if their 2015 voters don't want to fund pensions at the current rate then they shouldn't be bound by a contract some 1985 union-friendly pol made. govt contracts need to be treated differently than private contracts.
yea, hold on bro, my actuaries said that after an annualized 8% growth over the next 50 years, we'll all be livin in a big puddle of unicorn foam.
In the early days, government employees were paid less than the private sector with the understanding that public employees had job security and a pension plan. It is only after the down turn that central Florida teachers have better jobs than those in the private sector. We have people in my county that have worked for the last eight years for $35,000 with no pay raise. I’m at the top of the pay scale and now make $8,000 less than what I made ten years ago. So, local governments are trimming their sails. Now that I am retiring after 43 years in the classroom I thank God Florida is not one of the states on the list. But trust me I have no illusion. I know the pension fund could collapse in a heartbeat. I worry about how much money FRS put into the oil bubble. I have socked some money away but if all this goes south I pray for a short life.
If you give me this money it will grow at 8% or more for the rest of time, I promise you....sounds like something a ponzi artist would say that you would never believe. For some reason when the government says it no one bats an eyelash....fucking noobs.
Remember the good ole days when Pension Funds were happy investing in Bonds that earned 8%, or even 6%. But....that was before the FED destroyed the market....and no one will blame the FED for destroying all the Pension Funds....it's a shame. A GIGANTIC transfer of wealth from every single "would be" pension recipient and even SS recipient to Wall Street 1%ers....and the beneficiaries of massive debt piles.....and did you see the Yachts lined up in MonteCarlo for the Formula One race....wow, I heard some of them can even be rented for $850,000 per/week.....Thank you Mr. Privately owned FED Reserve Bankers, hope you enjoyed the race.
I will. I am going to blame every individual I can find when the checks stop coming.
And because that transfer turns into salaries and profits for WS coys and their employees, it is counted as an accretion to GDP. The more theft occurs this way, the faster GDP grows according to government numbers.
Uh, you might have an insurance policy that promises that, not a pension fund. Un -intended consequences of the Fed's ZIRP plan to save their Franchisees.
In my small Florida town, the pension obligations (including heath care) for the average police or fire retiree who can retire at 50 and has a life expectancy of 77 are (drum roll), more than $3million.
That's a paltry $111K a year for 27 years. You heartless bastards are starving those poor pensioners.
I have long been astounded at the pay and retirement benefits for police and firemen. A retired teacher may get 20% of their salary as a pension after 20 years service, but P&F get about twice that for shorter service. Don't get me wrong - its difficult work and they should be well paid, but huge pension benefits for P&F are simply unaffordable and likely unnecessary to attract qualified applicants. It would appear that politicians aren't afraid of teacher's unions or other public employee unions but are totally cowed by P&F unions. Why?
P&F know how to shoot guns and not put out fires. And they are still sane enough to understand when they are being fucked, as opposed to the average teacher who is a mental slurpee after dealing with teenagers for 30 years.
The extraordinarily erudite economics professor, Richard Wolff, earlier this year went into this topic on his weekly radio show/podcast. In a nutshell, Politicians make promises to certain parties, in this case, public unions, and say that if the union endorses him or her, that he or she will make sure legislation is passed that ensures excellent pension (and other) benefits to the union members. The burden of the pensions don't become apparent for many years into the future - so it's an easy quid pro quo.
The time we're in now is when these things are "coming due". Grab a seat!...
A neighbor retired from the sanitation dept. a few years ago at 59 saying how he had logged so much overtime in his last year that his pension was gonna be awesome! 'Course, he now has taken on a cash job too - to help out his grown kids!
Richard Wolff audio shows: http://www.truth-out.org/author/itemlist/user/44661
and this is one reason why Bernanke/Yellen printed and will continue to print. if they ever stop printing then the market corrects, unleashing devastation on those 8% assumptions (especially as the funds have had to shift more into equities).
Rather sounds like instead of buying one and getting a second half price or free, you buy two and pay for three. Against the Grain and ends badly, very badly.
how about a chart of retirement age and per person pension! Nothing like a pension 100% of wage...when you are 55 years old
so let me get this straight...the pensions lost tons of money in the stock market melt down...so they now give a greater amount to hedgefunds that lost huge amounts in the last crash...to make up the difference. We have truly gone through the looking glass.
The ones that were adequately funded hve more than recovered from the stock market crash. Just as the market has recoveredm and more. those greatly underfunded had to tap into the very low asset base during the period and a much smallr amount was left to appreciate and recover.
The real ripoff is that current employees have continued to make contributions without the adequate government match. Those monthly contributions increase the liabilities of the fund in the future, but are used to fund the current payouts as little is comming in from the govt. It seems that government can commit fraud by investing the employee funds into a certain default situation. A 401K with your name on it and controlled by the employee is a much better option. at least the bastards cannot give it all away to someone else.
Brownbacks tax cuts did NOT create a $800MM deficit. Spending $800MM too much by the Kansas State legoslatire did....
Get the fuckin' story straight ...
So Brownback cut taxes, but had no input on the expense side of the equation? Seems odd, dontcha think?
Kansas will be fine. Takes time for spending and taxes to equalize. They will have to cut some spending but the tax revenue will rise. Brownback was the only Governor who stands up to federal tyranny by threatening to arrest federal officers - if he has the gall for that - he can make this work.
I'm reminded of an old James Bond flick where the arch villian was circling the earth with a giant laser gun - the villian wanted to demonstrate the power of his laser weapon but upon checking the coordinates discovered he was over Kansas and concluded that it might be a year or two before anyone noticed it had been destroyed.
Beware of the Wolf in sheep's clothing.
Let me display my ignorance of Finance.
"Moody’s decision also triggered some $2 billion in accelerated payment rights for the city’s creditors .."
So the Finance Crook sets up the Loan or Credit with provision that downgrade by Moodys, Fitch or S&Ps forces early repayment... and people sign this stuff knowing they are dealing with some kind of Crook or Mafia.
What other mafia tricks are acknowledged in these Loans?
- Early Repayment in Credit Downgrade
- High Interest Rates compared to FED Rate
- No such thing as Public Bank to Loan to States
- Loan may be resold or put into Tranche for Derivative
- Loan maybe be discounted and sold off
- There is so much money in Banking, the Bonuses & Executive Pay even in a bailout year is higher the profits of many large businesses
I'm not familiar with the details of the Chicago debt portfolio but these provisions are typically written into transactions tied to swap agreements.
For instance:
Slick bankster pitches this deal: why issue fixed rate debt when you can issue floating rate debt enter into a swap agreement (floating to fixed), pay the same annual amount and get a nice fat check up front? You look like a genius. win-win. Ignored is: 1) event risk, for instance downgrade, as with Chicago; 2) counter party risk - swap counterparty goes tits up--it many cases it is the issuers OBLIGATION to replace the failed counter party! Also, the floating rate debt will typically have a direct pay letter-of-credit attached to it. The LOC typically has downgrade risk and of course counterparty risk. Counterparty risk became very real in 2008 -- there were very few writers of letters of credit. Some issuers spent the next couple of YEARS restructuring this ill-advised hairball bullshit. Sometimes collateral has to be posted upon a downgrade.
Jim Grant, back in the mid-late 90s when this crap was rolling out, was one of the very few who spoke out against these transactions, saying municipalities had not business taking on these embedded risks. Very few even knew they were there. The more cynical didn't care. The foolish were conned by the assurances of the banksters.
The fact that Chicago still has these deals means either they couldn't or wouldn't refund them to fixed rate bonds or they are so damn stupid they entered into new ones.
BTW a fixed income bond is almost always fire-and-forget -- no contingent liabilities at all on the issuer after issuance.
They, the politicians of yesteryear, the union leaders, the lobbyists, all knew this day would come. Still they promised that you could retire at 50 and make more in retirement than you did while working. All for votes and political favor. Now, here comes the judge.
Why do unions exist when the vast majority are government unions or work on or in government facilities like convention centers, mass transit and schools? Who is oppressing them so badly that they need a union? It's political incest.
So here we are having to choose between keeping the unkeepable promises made by kissing cousins or firing police and firefighters.
An educated and virtuous citizenry is needed to maintain our form of government. Ditto the leaders that citizenry elects. We have neither and down the drain we go.
Ugh!
Frank Zeidler, the Socialist Party mayor of Milwaukee, Wis., from 1948 to 1960, writing on the consequences of collective bargaining by public employees, in the magazine Personnel, July- August 1969:
This sharing of powers in wage determination and conditions of employment through the negotiation process has in turn diminished public officials' authority in other areas of policy involving organized employees.
The net effect has been to create what amounts to a two-chamber local government. One chamber is made up of elected representatives and chief executives—aldermen, councilmen, county board or commission members, mayors or other chief executives—the traditional decision-making body for local government. The other chamber comprises the organized public employees who have gained official recognition to negotiate. The public business on wages and conditions of work, and therefore indirectly on policy, cannot be carried on without mutual agreement between these two Chambers. . . .
The implications of this new method of reaching decisions in local government put an entirely different aspect on the sovereignty of councils and executives and elected officials as well. The challenge of organized public employees can mean considerable loss of control over the budget, and hence over tax rates and over government programs and projects.
The gravity of the challenge was recognized by some municipal officials at least ten years ago, but most of them took the position that to study the new phenomenon was to encourage it. As is usually the case, the ostrich stance was a mistake: When employee organizations suddenly burgeoned, municipal officials were not prepared with effective rejoinders before legislatures and in negotiations.
What about doubling down on state lottery, like Oregon? You won't run out of suckers wanting to get rich quick.
Cities always have BOONDOGGLE projects, regardless of how deep in debt they are, and the local newspapers always scream "YOU citizens NEED this year's boondoggle project". Make-work for builders, architects, engineers, bankers, planners, attorneys, realtors, and NEWSPAPERS: the usual suspects. So the Cities' workers pension funds are left unfunded, and go belly-up, and the local businesses which needed retired City workers to be customers go belly-up, but citizens can take CIVIC PRIDE in all the beautiful boondoggles sitting around town, gathering dust, and in the fact that the usual suspects pocketed enough money to pay their country-club memberships for ever and ever.
This country is a fucking cesspool there I said it
This country is a fucking cesspool there I said it
BOO-YA!!!!
adrift in a sea of shit
I got the solution right here!!!! The various pension funds can buy each other's pension obligation bonds!! Problem solved!!!
I can take credit for having killed one of these scams by asking questions in a public meeting--basically drilling down through the bullshit to the simple facts: you're borrowing money on the bet that you can earn more than you are paying in interest on the debt. What will you invest in? How can you be certain the return will exceed the borrowing cost for the the 30 years? What if it doesn't? Doesn't that increase your liability? This is a bet. Can you tell me the odds? Etc.
Boy was that sleazeball bankster pissed! Payday of a lifetime up in smoke.
Prep for the obvious.
A nephew is a Union Officer in Illinois. I tried to tell him the pensions would do in the state budget. All he can hear is 'we earned it and we want it'. Any effort to show the political nexus to sweetheart pensions, salaries and benefits for state and local government workers and the unrealistic sums they have negociated is interpreted as ' I hate you for being so successful'.
I also advised gold but with a pension like he is expecting who needs it?
Tell him he's gona earn a 12ga shotgun rammed up his fucking butthole if thinks people are gona put up with huge personal real estate tax hikes. And you wonder why there's such a 'save the children we need the guns' campaign running. These rotten bastards KNOW EXACTLY WHAT IS COMING.
Most of pension fund managers are crooks. Paid off by Wall Street to ruin pensioners. They massively gamble on derivatives to cover their salaries bonuses and exuberant costs or go strait forward for theft, violating stated fiduciary duties as a result they are massively over-leveraged and hopelessly insolvent.
They do it since they know they are TBTF and will be bailed out (for cronies and security apparatus who get it all and some), bailed-in (for enemies who loose it all and some more) and nationalized for rest of morons (who get a pittance). This is scenario already approved in US and played in many countries all over the world. Watch out.
Cash, pensions, savings, gold, land etc. poof gone, sucked up by Wall Street goons singing: Drill baby drill, kill baby kill, steal baby steal to please their god of money.
So let me guess, the 90% are going to get raked over the fucking coals to support a small minority of government employee fucktards! Have they considered what will happen if these huge stock market gains don't continue?
Brownback might be a POS but he's at least slashing jobs. Do I want to see people lose a job? NO. Do I want my already bs real estate taxes going up? FUCK NO. Of course he has plans to raise those also but perhaps not as much.
Part of this mess is due to the fact that nearly 1/3 of the fucking country is sitting at home and government keeps rolling along as usual and in some cases even have the stupid fucking idea of expanding.
Tie a rope around your leg and have someone travel about 1000 miles on a gravel road to tent city and tie the other end to a 1rpm gearmotor. That's what this is going to be like. No need to take your shirt off, it will be slowly disintegrated.
Those assholes in politics have the money and keep it secreted away from the public in various little (NOT) "investments" in each state. The details can be found in each state's comprehensive annual financial report (CAFR). This IS NOT the summary report that is released to the public but the detailed report that is relatively hard to get. Go to http://cafr1.com/ for more (and disgusting) info on the nationwide scam . . . . . here's a headline from a video on the web site that summarizes things nicely and is typical for what is going on on a massive scale:
University of Wisconsin - Hides 1-billion dollars
The whole intent here is to plead poverty to the public to raise taxes and/or to ream the pensions while their little "investment" funds keep their power game going.
"Governor Florio, myself as a financial adviser, if I had a stock offering and sold 100% of the stock in my company and made a 10-million dollar profit this year but told my share-holders I made a 1-million dollar profit and paid dividends only on 1-million dollars to the share-holders this year, #1 that is misrepresentation, #2 that is fraud, #3 I would be arrested and thrown in jail. The State of New Jersey has inacted statutes that allow them to do what is totally illegal for any public company to do."
BELIEVE that the State of Illinois is the leader in this little enterprise . . . .
The parasitic class has already looted the rest of us to pay for their salaries, then they want us to pony up again for their gold-plated pensions? Sorry, bud.
I have a better idea: If you're a parasite getting your wage through coercion, you can pay for your own fucking pension. 100% of it. No more taxation, borrowing or inflation to fund 30 years on the golf course.
Pay one's own way? Wow, what a concept!
The pension mess is the pozi of ponzis, to be outdone only by SS and Medicare.
But here's the thing...
These deals were all made by state governments. The pnesion obligations were on the table and in teh budgets. Money was earmarked to be paid into them but was then diverted.....
That, by definition, is embezzlement.
Where are the inditements?
Squid
You forgot to mention Orange County, CA...remember the bankruptcy of this rich county..well they are at it again..bond sales $340 million for the pension fund...again..where PIMCO lives...
So the courts, staffed by government union employees receiving these pensions, have ruled that their own pensions cannot be reduced like those in the private sector... not even the bank CEOs would attempt such a blatant conflict of interest. Any state judge that doesn't recuse him/herself from these cases should be disbarred.
And second, it should be pointed out that these pension "promises" were made against other promises -- the union workers would clean the streets, fill in pot-holes, plow the snow, protect the public from being murdered (by thugs or cops), protect the public from having their property taken (by thugs or politicians)... what happened to those promises? Any corrupt and biased judge want to tell us why those sacred promises were not honored?
So the courts, staffed by government union employees receiving these pensions, have ruled that their own pensions cannot be reduced like those in the private sector... not even the bank CEOs would attempt such a blatant conflict of interest. Any state judge that doesn't recuse him/herself from these cases should be disbarred.
And second, it should be pointed out that these pension "promises" were made against other promises -- the union workers would clean the streets, fill in pot-holes, plow the snow, protect the public from being murdered (by thugs or cops), protect the public from having their property taken (by thugs or politicians)... what happened to those promises? Any corrupt and biased judge want to tell us why those sacred promises were not honored?
The thing about Sam Brownback is that I think he and his staff had no idea just how bad the US economy is and that the US economy wouldn't even respond to their Tax-cut defibrilator. He has a flat lining economy is the problem - not the tax cut.
Of course every fucking moronic democrat and republican is now saying "see, tax cuts don't help stimulate the economy!" which is true, in the same way that defibrilating a guy who has been dead for 6 years isnt going to recover from a paddle session.
Now you will have politicians looking at firing up the copy paper machine to gin up some muni bonds to pay for their pensions. Nothing good will come of that for sure.