Posted on 08/07/2013 12:33:47 PM PDT by Lorianne
Detroit, you're not alone.
Across the nation, cities and states are watching Detroit's largest-ever municipal bankruptcy filing with fear. Years of underfunded retirement promises to public sector workers, which helped lay Detroit low, could plunge them into a similar financial hole.
A CNBC.com analysis of more than 120 of the nation's largest state and local pension plans finds they face a wide range of financial burdens as aging work forces near retirement.
Thanks to a patchwork of accounting practices and rosy investment assumptions, it's not even clear just how big a financial hole many states and cities have dug for themselves. That may soon change, thanks to a new set of government accounting standards that could serve as a nasty wake-up call to states and cities relying on rosy scenarios and head-in-the-sand accounting.
Even less clear is who will pay to clean up the messes. Will it be the millions of retirees owed trillions of dollars in benefits, the bondholders who lent states and cities trillions more, or local taxpayers who may have to pay more to cover the shortfalls or see deeper cuts in public services?
Regardless, the painful process will likely play out for years.
"Moving pension plans is like steering a blimp: you turn the wheel and you go six miles before it starts to turn," said John Tuohy, Arlington County, Va., deputy treasurer, who chairs the pension committee of the Government Finance Officers Association. "In the political process, that kind of patience is very difficult."
(Excerpt) Read more at nbcnews.com ...
“Nine states – Hawaii, Alaska, Kansas, Rhode Island, New Hampshire, Louisiana, Connecticut, Kentucky and Illinois – have now set aside less than 60 percent of what they need. Illinois has saved just 43 cents to cover every dollar of what it needs to pay 350,000 retirees and 500,000 current plan participants who are counting on a pension check.”
The RATS slush fund
Large pools of money like Social Security and pensions are too much for our criminals in government to stand. Our money burns a hole in their pockets.
That particular pool only exists in the figment of imagination of "policy analysts" at AARP.
Well . . . Liberals and people younger than fifty . . . I guess.
You are correct, we had this discussion today about every bureaucrat or city worker who pays in a dime (or less, or zero, in the case of BART workers) and pulls out a dollar.
There were promises made by union-enriched politicians who kicked the can, now, the pensioners want what the 50-60-70-80-90’s negotiated retirements to come in. It’s all gone.
Detroit is just the beginning in this mess.
The government has spent somewhere around $150T that they do not have. Federal employee retirement fund FERS is the largest unfunded retirement system in the world.
This will continue until the Rats are convicted and sent to prison for lengthy terms
That's a real paradox for the politicians.
Most of the people who could have prevented this mess benefited from the system. Staff of the state legislature, departments of finance, and the elected officials all got increasingly more attractive retirements. So it was an inherent conflict of interest.
If you ignore them long enough, they will eventually offer you a one year free trial membership.
If we would simply get our workforce back to work, revenues would flow into cities, counties, states, and the federal government.
Failing this, there’s simply no income stream to meet all the promises. There could be, but this president and Congress are currently unfit to serve.
And so it goes...
In the private sector, you would be jailed for life for what Washington and Sacramento have done with our money.
You are correct.
Social Security could be fixed like this...
Over 65, nothing changes, no political opportunity.
Under 65, get paid out 100% of what you put in (no interest accrued) to be put into a private account to only be accessed as age 65. No more paying in.
Never put in - SOL.
The bottomline is that the deal that was promised -- the deal that many people are expecting -- cannot be fulfilled. Some folks are going to end up feeling screwed. The only thing left to decide is the precise nature of the settlement. Your idea may be a viable contender for that settlement.
That’s what happens when real interest rates go below zer0.
We pay FAR too much to these employees, and they over-reach their authority consistently, Regulating us into 3rd World Status as businesses go to offshore operation, to avoid the over-Regulation AND taxes.
Until the Government size is reduced by at LEAST 50%, there is no end to this. TRUE Un-employment has been reduced by reporting meaningless Federal workers as "Employed", and taking credit for "new jobs created", via such un-Constitutional creations like Obamacare, EPA Regulatory schemes, IRS doubling in size, etc., not including the Czars and their staffs.
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.