Three stories below sum up the delusion, corruption, and idiocy of the politicians and public employee unions. State politicians across the land have promised government employees $900 billion more than they have actually funded. Liberals pretend they don’t understand the term unfunded liability and completely ignore the fact that the only way to honor these unfunded promises is to jack up your real estate, sales, and income taxes by 50% or more. Essentially, it is mathematically impossible to honor these promises without crushing the American taxpayer. Are you willing to pay an extra $1,000 per year in real estate taxes so a high school gym teacher can get a $100,000 per year pension?
Now for the bad news. The 2nd story made me laugh. The mental midgets that run the City of Pittsburgh refuse to even examine the possibility of changing the return assumption on their pension plans from 8% to 7.5%. They actually believe their pension plan will return 8% per year over the long term when 10 Year Treasuries yield 1.7% and the S&P 500 is priced to return 4.5% over the next ten years. Someone needs to tell the delusional numbskulls in Pittsburgh that just because you choose to pretend that reality doesn’t exist, doesn’t mean your pension fund will have the cash to pay out to government drones.
The 3rd story reveals the reality of the situation. CALPERS, the biggest public pension fund in the world, returned 1% last year. That was slightly below their 7.5% assumption. This country continues to act like a 3 year old child. We want our candy and will throw a fit until our mommy gives in. Pretend and extend, while faking the accounting, will not create the cash needed to pay our unfunded liabilities. Using a REAL return assumption of 4% would make the unfunded state pension liability approximately $1.6 trillion.
I predict hundreds of municipal bankruptcies in the next five years when reality meets delusion and false assumptions.
5 comments:
Thanks for the article. I believe the author however, knows better than to call it idiocy, numbskull behavior, or errors.
The actions of our governments (local, state, and federal) are usually criminal. They don't make mistakes. They get exactly what they want. They KNOW the pensions are unfounded. They want the labor now, forget about the rewards promised to get the labor.
The smart people don't work in private industry. It doesnt pay as well as the Feds. That is, assuming the pension promises are kept.
I guess we might as well halt social security...I mean after all...it is an empty promise as well to anyone under 50 years of age. Guess you all don't want to hear that though....as long as you get yours, right?
Sorry, 846, but I was forced into paying for it all my life. I worked hard for that money, and was forced to give it to my government in a promise that it would be saved with interest and made available to me when I got too old to work. Well, it's time that promise comes about, but if it doesn't, then it's lawsiut time. If there's no money to back it up, well, then it's just revoution time.
It's that easy.
This is why we need Romney/Ryan and like mind elected officials instead of the one who are either pretending this isn't a problem or are ignoring it.
This is going to be a big problem and I just don't understand the casual calm indifferent attitude most government employees are taking. This is a disaster that has been building for awhile. I don't even understand why they are content with letting someone else control their money. In their short sightedness they are letting the unions control them. I don't know how people can be like this and I am so glad that I won't ever have to rely on anything that is funded by the govenment including SS and Medicare.
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