Posted on 05/12/2009 2:41:53 PM PDT by SeekAndFind
For years, states all across the country have been starving their retirement plans. Here's a look at how the crisis is playing out in New Jersey, where the bill is coming due, and the state doesn't have the money to pay it.
Even as the nation's economy is showing some tentative signs of bottoming out, another calamity looms: the public pension bomb.
For years, states nationwide have shortchanged the retirement programs that cover teachers, police, and other public employees; now the stock market plunge has wiped out billions of dollars from already underfunded plans. California, New York and Illinois are among the states scrambling to plug multibillion-dollar holes in their pension systems. The growing obligations raise the specter of higher taxes, diminished services, or even another round of costly federal bailouts.
"States have long needed to reduce their unfunded liabilities, and widespread investment losses have made it even more necessary to put money in," says Lance Weiss, author of a 2006 Deloitte study of state pensions. "But the market crash also means there's less money available to use for contributions. Everything is coming together to create a crisis."
To better understand this ticking time bomb it helps to focus on a single state, and New Jersey makes a compelling case study. For one thing, its situation is dire. In June 2008 the state estimated that the plan - one of the nation's largest, covering teachers, state employees, firefighters, and police - had $34 billion less than it needed to meet its obligations. Since then the market value of the plan has dropped from $82 billion to $56 billion (a new estimate of underfunding is due in July).
(Excerpt) Read more at money.cnn.com ...
Should be the same way for the government workers.
But fat chance of that.
Expect a dollar to be worth about ten cents by the time all this is done, printing money is rapidly becoming the only option available to our fiscally and morally bankrupt governments.
Small fiddle! I wonder if even Social Security will be there.
Declare bankruptcy... renegotiate with the unions for more reasonable retirement benefits?
All of this just means massive, massive increases in every state and local tax and fee mechanism available to the state and local governments. When the people that can still move elect to leave that Eden, he state and local governments will pander to the Fed for Stimulus - give us Stimulus.....we must have Stimulus!
The answer is SECESSION. Let NJ, NY and CA work it out on their own.
Great!
One of the biggest unaddressed economic farces to address, is
“Civil Servant” salaries, pensions, perks and the ridiculous concept that “Civil Servants” should be allowed to have unions....
They have used their collective strength as a MOB - to extort undeserved benefits for far too long..
Time to bust their unions and ALLOW their pension funds to collapse - WITHOUT taxpayer liability to make them well.
They should be in the EXACT same boat as the rest of society....
Their boat should also rise and fall with the tide.....
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Some Public pensions are codified into state law. An example is DC 37 in NYS. Paying the pensions is a legal mandate.
The political whores in the past have really left us a nice present inter-generational present, like the one growing in DC now.
I just read about the Fed backing and insuring muni bonds. Lemme find a link
Are you suggesting all states other than NJ, NY and CA secede? Or perhaps the other states could expel them.
Couldn't happen to a nicer bunch of politicians and administrators stuck on "stupid."
Of course, that goes for the incompetent public employees, too.
Even simpler solution: 100% tax on pensions, less the cost of sending out checks for $0.
“For years, states nationwide have shortchanged the retirement programs that cover teachers, police, and other public employees; now the stock market plunge has wiped out billions of dollars from already underfunded plans. California, New York and Illinois.”
Wow, if these four states went for McCain, right now they wouldn’t be dealing with this.
Now you tell me!
Sorry for the delay folks, my cable went out last night just as I was getting ready to hit ‘post’. Here’s the link I spoke of in #11
http://www.freerepublic.com/focus/f-news/2249492/posts
Thanks, I missed that.
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