Posted on 04/11/2016 7:28:43 PM PDT by Lorianne
The US public pension system has developed a $3.4tn funding hole that will pile pressure on cities and states to cut spending or raise taxes to avoid Detroit-style bankruptcies. According to academic research shared exclusively with FTfm, the collective funding shortfall of US public pension funds is three times larger than official figures showed, and is getting bigger.
Devin Nunes, a US Republican congressman, said: “It has been clear for years that many cities and states are critically underfunding their pension programmes and hiding the fiscal holes with accounting tricks.” Mr Nunes, who put forward a bill to the House of Representatives last month to overhaul how public pension plans report their figures, added: “When these pension funds go insolvent, they will create problems so disastrous that the fund officials assume the federal government will have to bail them out.”
The Stanford study found that the states of Illinois, Arizona, Ohio and Nevada, and the cities of Chicago, Dallas, Houston and El Paso have the largest pension holes compared with their own revenues.
In order to deal with the large funding shortfall, many cities and states will have to increase their contributions to their pension funds, either by raising taxes or cutting spending on vital services.
Currently, states and local governments contribute 7.3% of revenues to public pension plans, but this would need to increase to an average of 17.5% of revenues to stop any further rises in the funding gap, the research said. Several cities and states, including California, Illinois, New Jersey, Chicago and Austin, would need to put at least 20% of their revenues into their pension plans to prevent a rise in their deficits, while Nevada would have to contribute almost 40%.
(Excerpt) Read more at ft.com ...
What’s the worry? Alan Mr. Andrea Mitchell Greenspan said we can just print whatever money we need to pay on our debts. Crank ‘em up boys, we need $3.4 Trillion this time.
The United Socialists public pension system has developed a $3.4tn funding hole that will pile pressure on cities and states to raise taxes.
Awesome. Wish they’d toss a bit my way before the hyperinflation hits. Of course, some say it will be the devaluation of assets.
We’re on the cusp of a huge mess, fer sure.
These pensions simply won’t be paid.
Government pensions are the number one priority for government "workers". They'll eliminate the military, tax the public 80%, and anything else they need to do to keep their gravy train on the tracks.
Unfortunately only the Fed Govt can monetize its debts, not state or local.
Technically they are obligations that must be paid. The solution, other than massively increasing taxes, is to stop giving out pensions to new hires. Government entities at all levels that are in a funding hole should work with unions and inform them the gravy train is over. Any new promotions given will come with reductions of pension formula; if employees balk then don't take the promotion. All new hires will receive greatly reduced pension formulas or no pensions at all. Of course these recommendations will not be done, and local and state pension funds will go dry and crash. Simple math.
to be followed by... 
Developed? Like out of the blue?
Oh darn. Time for a federal bailout.
Of course I think many cities are headed for bankruptcy court.
Is that money? I never saw the movie.
Hyperinflation or deflation, place your bets.
“Technically they are obligations that must be paid.”
I had a conversation with an Illinois teacher who quite smarmily reminded me that her pension was “guaranteed” by the Illinois Constitution. I replied that when there was no more money she could take her copy of the Illinois Constitution to the bank and try to cash it.
The look on her face was absolutely priceless.
L
Yup. In the movie, that’s the cartel’s money. And sitting atop the burning pile of cash was the cartel’s money launderer.
The joker in the dark knight is one of the greatest villains ever.
I’ve seen the pic before but never noticed it was money because I didn’t look close. Thanks.
Utter fantasy. These unfunded promises by people who mostly left office years ago will all go bust. Imagine it; a city council is elected, outlines a budget 20 years in advance, and the follow on city councils are left to figure out how to pay for it.
Would this hold for library funding or street repairs? Not unless it was from issued bonds.
It will fall apart; 50% of most municipality budgets are going to people who are doing nothing. End the embezzlement of public funds and walk away from these promises of councils long gone.
Batman Dark Night, the Joker lights the money and says to the mobsters: Oh, I am(a man of my word). I'm only burning my half. All you care about is money. This town deserves a better class of criminal...and I'm gonna give it to 'em
Why does the federal government have to bail them out? I had no part in promising these people the world, like the idiots who agreed to the contracts did.
“vital services”
Translation: Handouts to illegals.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.