Are Collapsing Pensions "About To Bring Hell To America"?

Tyler Durden's picture

Authored by Mac Slavo via,

The toxic dollar is bringing hell in a handbasket.

Along with the student loan debt bubble and other major financial factors, the looming pensions crisis is bound to be the death of us all.

Because it’s based on a future promise to pay, it has long been a benefit dangled to solve strikes and union disputes – because, in the end, it is just more debt, whether private or public.

With tens of trillions in unfunded liabilities, the weight of an avalanche remains dangling over our heads. An aging population is cashing in on needed retirement benefits while the younger generations must support multiples that are unsustainable financially.

Somewhere between the retiree that needs clothing, food and lodging, and the bankruptcy of cities and state governments is the makings of the next economic crisis.


This is one of those things that few will pay attention to until it’s a 5 alarm fire. Then the policymakers will run around with their hands in the air saying they didn’t see it coming.


Of course they did. But addressing the problem is hard and will make people unhappy in the short term.

This blog pointed out the sad, and quiet fact that entities like the government of South Carolina are deep in debt over pensions. Everywhere there are failing social systems.

And somewhere, the rubber is going to met the road, and people are going to get hurt.

As SHTF previously reported:

In 2014 a new Federal law made it possible for pension funds to cut benefits for their recipients.


[I]n October of [2015] the canary in the coal mine fell over and died when Illinois announced that the State was posting pension payments because it ran out of money.


Fast forward a few more months and things have been taken to the next level. The Central State pension fund in Kansas became the first such fund to take advantage of the 2014 law as 400,000 Americans who depend on their monthly pension income to pay for such things as their mortgage, groceries and medical expenses saw an average of $1,400 per month sliced of their monthly benefits.

Unfortunately, there may be no avoiding some very painful lapses in checks in the difficult years ahead.

As Market Watch reports:

But take a look South Carolina’s government pension plan, which covers roughly 550,000 people — one out of nine state residents — but is a staggering $24.1 billion in the red.


This is not a distant concern, but a system already in crisis.


Younger workers are being asked to do much more to support the pensions of retirees. An analysis by the The Post and Courier of Charleston noted recently that “Government workers and their employers have seen five hikes in their pension plan contributions since 2012, and there’s no end in sight.” (Most now contribute 8.66% of their pay, vs. 6.5% before the changes.) At the same time, the pension fund has been chasing more stocks and alternative investments instead of relying on stable investments like bonds that may be much less volatile but generate only meager returns.


And if that’s not troubling enough, South Carolina’s pension fund is far from alone.


California’s Calpers public retriree system is notoriously underfunded and doomed to implode. Chicago, Detroit and other urban wastelands are sagging under abysmal debt. Dallas, Texas pensions went insolvent. Puerto Rico is nothing but a propped up holding corp(se).

Something massive has been swept up just under the carpet.

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junction's picture

Don't worry, Mr. Tiny Hands will solve everything by hiring more banksters from the Squid.

nuubee's picture

Inflate their retirement away, or let their system collapse. Either way I should come out ahead. Ready and waiting for this bullshit to enter a crescendo.

LowerSlowerDelaware_LSD's picture
LowerSlowerDelaware_LSD (not verified) nuubee Mar 16, 2017 10:05 AM

Go hang your leftist politicians and take it from their wealthy estates.

Don't have the government point guns at me, taking from MY earned and saved retirement savings, to pay for you.

nuubee's picture

Funny, I thought that's what all boomers said their entire lives. "Don't take from me, Take it from the unborn."

LowerSlowerDelaware_LSD's picture
LowerSlowerDelaware_LSD (not verified) nuubee Mar 16, 2017 10:10 AM

No, just what the leftist politicians have been saying... and doing.

So, you are for government forcibly taking honest earnings from people becasue politicians promised others stuff in the future?

Douche McGoosh's picture
Douche McGoosh (not verified) LowerSlowerDelaware_LSD Mar 16, 2017 10:18 AM

Got Bitcoin for your retirement plan??

LowerSlowerDelaware_LSD's picture
LowerSlowerDelaware_LSD (not verified) Douche McGoosh Mar 16, 2017 10:23 AM

Yep! 50% tulip bulbs, 50% Bitcion. Going to make KILLING on this speculative move...

Douche McGoosh's picture
Douche McGoosh (not verified) LowerSlowerDelaware_LSD Mar 16, 2017 10:26 AM

Tulips? You mean what mentally vacant ZH readers obsess over?

LowerSlowerDelaware_LSD's picture
LowerSlowerDelaware_LSD (not verified) Douche McGoosh Mar 16, 2017 10:29 AM

No, not tulips. Tulip bulbs. Get your investments straight mentally vacant ZH reader.

JRobby's picture


"THEY" wish to usher in, in the midst of the chaos:

New World Government

New World Currency and Bank

New World Police & Surveillance State

Massive theft of assets during "the reconstitution" phase where all contracts will be worthless and no courts to enforce them anyway.

Elimination of complainers like myself 

NoDecaf's picture

Mr Yellen, we need a few more hawkish dove hikes like yesterday.

Manthong's picture

Heck, those things are not like your credit card where one day everything stops abruptly.

They roll over and over and over until…

The banksters want them to stop and take their short rewards.


Manthong's picture

Oh, F me…

Hell to America?

..try the Englewood neighborhood in west Chicago..

..courtesy of Mayor Rahm.

MagicHandPuppet's picture

Anyone who tries to make THEIR pension MY problem is begging to meet my two friends named Smith & Wesson.

lexxus's picture

Hell to America is an understatement. The CURSE is unforgiving.

stizazz's picture

My small pension south of the border goes a looooong way.

bamawatson's picture

CRUSH the .gov BloodSuckers

 Prseident Trump, Please RESCIND EO 10988   It would drive a stake through the Deep State in ways interesting to contemplate.


"Executive Order 10988 is a United States presidential executive order issued by President John F. Kennedy on January 17, 1962 that recognized the right of federal employees to collective bargaining. This executive order was a breakthrough for public sector workers, who were not protected under the 1935 Wagner Act." 

AGuy's picture

"Anyone who tries to make THEIR pension MY problem is begging to meet my two friends named Smith & Wesson."

Suicide? FWIW: Its already your problem, As states & Fed jack up taxes. States are raising taxes (gas tax, property taxes, income taxes, states taxes). Fed keep on raising the SS cap, now at ($127K for 2017). And of course Obozo care forcing you to pay for other people's healthcare.

BTW: I don't think we are just seeing the begginnig of tax hikes. The only way to not get screwed is to go on welfare, or drop out of the laborforce.

Got The Wrong No's picture

Which adds to the problem and many will do it. Be prepared. the wealth divide is about to get a whole lot bigger. They will be stealing are homes in the next round. 

cowdiddly's picture

REALLY? OMG this is the Revelation of the century. This pension fraud ponzi has been building for 20 years. Its almost like this guy was locked away in prison or something and just got out.

Lorca's Novena's picture

You dont understand! They had and signed a contract!!!! Benefits will be paid no-matter what, even if its in the form of puppies and kittens from starving households... 


muh penshon

Herd Redirection Committee's picture

This system has been HELD TOGETHER BY FALSE PROMISES.  OK, think about that.

Misplaced trust, is what we will learn from this debacle, as a society.  If there is EVER an honest debate on the topic. 

Unfunded liabilities have been a HUGE red flag since at least the 2008 crisis.  But it was able to be kicked down the road, so they did, and never mentioned anything to anyone. 

The reason faith in government has been so stable is because PEOPLE BELIEVED THE GOVERNMENT'S PROMISES.  That is what will be so vastly different in the new era.

So of course, we can see that the government will seriously need a scapegoat.  Maybe even a good war, to thin out the herd of violent, rioting protestors. 

Shift For Brains's picture

See Martin Armstrong's long held writings on just this topic. What is rolling over is trust in institutions or as MA says, public institutions. We will return to trust of private entities (I assume that we examine for ourselves) and the large institutions will collapse from all the unfunded promises and lack of trust in them to solve the problems.

For the gold bugs: MA is NO gold bug but he says the time precious will shine is during the shift away from public trust. It is not inflation that drives PM higher, it is a lack of trust in established social institutions to be there to make it all keep happening.

If that is not an apt description of what we're getting into, nothing is.

38BWD22's picture



Excellent analysis.  Whether Armstrong is right wrong or (likely) in between, he is a font of ideas with a great knowledge of financial history.

booboo's picture

Martin just needs a proof reader.

BurningBetty's picture

Love reading his blog and financial history. I am kinda sitting tight to see what their model is predicting for 2017.9. That is supposed to be a downturn according to their model.

AGuy's picture

"hat is rolling over is trust in institutions or as MA says, public institutions. "

Its not just public pension plans, but also private and Union pensions that are grossly underfunded. The Teamsters (Trucking Union) when bust last week.

A lot of pension money was invested in bond and stock bubbles, which resulted in negative returns. Plus the low interest rates From the 1990s (Greenspan Put) through today have been below real inflation rates.

FWIW: In my opinion Pensions are just a stupid retirement plan. You are total dependent on the entity to remain solvent and fully funded for at least 50 years (30+ year working career + ~20 year in retirement). 401K are slightly better, but they are under the risk that the gov't can change the rules or devalue the currency.

In my opinion, probably the only reasonable option is to own a small stable business, so you can count on income for life. If the Gov't devalues the currency, you likely to be OK since you can raise your prices to adjust for the devalument. I don't believe PMs are a safe haven either because the gov't can just make them illegal.

general ambivalent's picture

Nah, it's more like complacency than belief. People have been complaining for a long time about the government and most know it is pure evil, but they are more concerned for their own short-term interests and safety.

'Screw the other guy so long as I'm still king of my castle.' That's the American way. Has been from the beginning, and if it's not fixed this same shit will return again in another rhyme.

RockySpears's picture

  Wars do not thin herds.


 Your Civil War lasted 4 years  or so, but only managed to knock off 2.5% of the population.


  That is 7 million or so today, not really a dent is it?






allgoodmen's picture

The next war will include women of prime breeding age. The resultant depopulation will be unlike any other time in history.

BarkingCat's picture

Today that percentage would be lot higher. 

If there was a civil war today and the Welfare state collapsed there would be a lot of gimme girls dying of hunger.

The men who live off of others would be starving too. So the FSA would see huge numbers die off.

Lots of cubicle farm animals dying too, expecially those from big cites. 

Stop foor deliveries to the supermarkets and majority of the population is starving.

rockstone's picture

Depends on the 7 million.

Offthebeach's picture



Sloppy, real sloppy.

2.5% of total. Is...

5% of all males 

But abot 20% of prime 15-30 males in a era of physical labor.  Add on physical disabled in a era on near zero rehabilitation, plus mental effects .  So you might be looking at near 50% of working class males between 15-30 dead, crippled or messes up.

BTW, units were often local units of males. A bad hour at Cold Harbor or Gettysburg for the New Hampshire 3rd Infantry could and did result in half  of all the males of a county being killed .





I Feel a little Qeasy's picture

Yes, but there are loads of us in other countries that would love to take part and get rid of many more of you. You're welcome!

DocBerg's picture

The false promises are also what are going to detonate the financial markets.  Greenspan let the cat out of the bag with his "cascading cross defaults" terminology.  There is no place to safely invest money any more.  All that is based on promises to pay.  And what if those promises cannot be kept?  Oops!

OverTheHedge's picture

"  But it was able to be kicked down the road, so they did, and never mentioned anything to anyone. "

It's an interesting thought to consider that the people kicking the can would have been the top management, so you would assume closest to retirement? They hid the disaster during their peak earnings, and now the crash is coming, they are probably retired, out of office, and no longer able to influence the outcome. There's thinking ahead!

You would think that recipients of the pension would have the highest motivation to ensure that it will continue to be solvent? Wouldn't you? Or is it just that the people making the decisions have made "alternative arrangements", so don't give a shit?

When I started working in the late mid-80's I was already cynical enough to assume that there would never be any kind of pension provision - what a pessimist! Looks like I was right, but hardly anything to be smug about. I would think inflation is the best way out of this mess, but it might be that the US does the implosion thing too - it's all a bit too much, too suddenly to be massaged with "gentle 20% inflation).

newdoobie's picture

Good idea but war wont kill all the old peeps on retirement. What we need is another Spanish Flu.

New_Meat's picture

u must b whicked whorried 'bout this

All Risk No Reward's picture

Obama is a tool.  Geez, you haven't figured out he's a hapless puppet for the Sith Lords of the Banking Clan who have run this Debt Star for over 100 years running?

You don't to be the last one to figure it out.

“In the technotronic society the trend would seem to be towards the aggregation of the individual support of millions of uncoordinated citizens, easily within the reach of magnetic and attractive personalities exploiting the latest communications techniques to manipulate emotions and control reason.”
- Zbigniew Brzezi?ski, Between Two Ages: America's Role in the Technetronic Era

Offthebeach's picture

Oh,I thought you would mention Wilson, or Teddy Roosevelt....

Illusory logic's picture

It's in south Chicago, but point taken.

johngaltfla's picture

Nah. Seattle-Tacoma has hell all to themselves. I mean dayum, they got Satan tax-exempt IRS status in just 10 days!...

IRS Acts Fast When Satan Applies for Tax-Exempt Status
PT's picture

Oldies have to go back to work so they can pay taxes so the young can get unemployment benefits becoz the robots took all the jobs.

Now my head hurts.

rmopf2010's picture

Guess you're right. How ? the WORLD gave Boomers these generous pensions with no strings attached.

We're gonna pay the hard way, Boomers votes for their nice socialism


Arnold's picture

Not all of us are/were Union pukes there, diaper Dan.

Countrybunkererd's picture

when i can no longer publicly complain i think i prefer elimination.  May be much sooner than i though.  as KS would say "DEATH TO THE MONEYCHANGERS! (and their peers in .gov)"