Posted on 02/04/2016 6:11:39 AM PST by artichokegrower
A credit bubble is created when the amount of money borrowed exceeds the capacity of the borrower to pay it back. This concept is easy to understand, but the financial foundation of borrowing has been manipulated to an historic extreme by government. Not just through the national debt but through the agreements to create debt through public sector union contracts and municipal bond issuance.
(Excerpt) Read more at americanthinker.com ...
And 12.5 million Californians are on Medi-Cal (Medicaid).
California was in this pickle more than 20 years ago. It has just gotten worse as it has for may of the bigger states like Illinois and New York.
If you are invested in government bonds.
Get out while you still can.
Google “Theresa Ghilarducci” and you’ll see how they plan to wiggle out of this.
These schemes depend on 2 things in order to succeed: More people working in the private sector paying taxes and less people collecting money from the state.
The Democrat plan is less people working in the private sector and more people collecting from the state(hostage voters).
Guess which party runs California.
The even bigger problem is the so called ‘disability’ roles. All the benefits workers collect under ‘disability’ schemes are non-taxable. One can collect a military pension and military disability and still be eligible to collect s.s.d.i. on to of it all.
There are a number of states that have more or less fully-funded employee pensions. For the most part, they are smaller states, required employee contributions that were matched by the government agency, and don’t have ridiculous payouts.
Of course, California, Illinois, New York and New Jersey are complete basket cases as far as government employee pension systems go. They never financed them properly.
In addition state government officials receive kick-backs to award asset management contracts to hedge funds and other money managers.
Then the states estimate 8% annual returns that can only be achieved through wildly risky investments.
When everything crashes the government officials have since retired, the money managers have received their fees, and the taxpayers are left holding the bag.
Its even worse than this. In California, the two main public pension authorities, CalPERS and CalSTERS, calculate their funding deficit based on expected return models for their current assets that are based on historic return models. The models have laughably high rates of return (which, while historically might have been true from the 80s through the 2000s, are not going to be true going forward). If you reduce returns to a more realistic model, a number of CA counties already would be bankrupt. It likely is the same in other states.
<><>(1) using long-term financing to cover day-to-day expenses,
<><>(2) using bond proceeds to pay pension obligations, and,
<><> (3) misappropriating returns from the interest rate swap portfolio (a sub rosa ATM for paying the citys day to day expenses).
The stench from Chicago's poplitical sleaze is permeating the putrid city hall air... starting w/ Obama's ex-COS Chi/Mayor Rahm Emanuel. ....and remember, these kingpins of Chicago criminal politics moved into DC with Chicago kingpin Barack Obama.
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ANALYSIS Bonding is eternal taxation----the insider deals bonding companies made w/ shady pols to get bonding business would tell a tale of greedy pols accumulating riches through massive govt corruption.If these bonding deals were effectuated by way of referendum at the ballot box----and misled investors into buying tax-fee muni bonds----the SEC would be interested.
EMAIL enforcement@sec.gov
Massive govt corruption might include forgery, falsification of official records, fraudulent state budget entries, tax evasion, illegal wire-transfers, misuse of public office.
Tax-exempt municipal bond investors (including public education bond investors)-- have legal grounds to sue if they were deceived about deceptive bond offerings. In many cases, bond issues are approved by voters---at the ballot box--so that voters may have also been misled WRT uses of fraudulent bond offerings.
Also culpable are:
<><> bonding companies underwriting possible fraudulent bond issues;
<><> banks holding possibly fraudulent bond proceeds;
<><> State/city's modus operandi in allocating tax-exempt bond proceeds,
<><> the sub rosa acceptance of bond proceeds.
<><> state/city vendors accepting possible fraudulent bond proceeds.
<><> publicly-funded state/city agencies advocating the uses of fraudulent bond proceeds.
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The SEC, FBI, banking overight agencies, and the IRS, would be interested in the activities of state/city entities WRT bonding.
EMAIL---FBI TIPS PAGE https://tips.fbi.gov
EMAIL--enforcement@SEC.gov
Contact the IRS Fraud Unit
EMAIL Banking oversight agencies
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Taxpayers should find out which banks are facilitating this.
<><> Which banks are designated the official repositories of municipal tax dollars.
<><> Which banks are dispensing the ill-gotten proceeds....and to whom.
The public pensions themselves are not founded in constitutional authority to tax since they are future appropriations of tax revenue. So they, in effect, impose taxes upon residents who are not yet born. This is not consistent with the concept that appropriations require the consent of the governed.
If you had any cash to invest, where would you recommend? I have land, so looking for another way to protect what I have.
Muni bonds used to be taken out by governments that were of sound financial backing as audited by financial institutions. Now, those financial institutions are corrupt and without sound financial backing, so the muni bond industry has gone that direction.
Whatever you buy make sure it is not paper (stocks, bonds, certificates of whatever). If you don’t hold it you don’t own it.
imho you shouldn’t let any “money manager” near your money.
Under Indiana law, the “issuing counsel” gets 3% of any bond issuance. Outside of the major cities, the local “town/city/county attorney” is an attorney in private practice who has the connections with the government who gets to be “issuing counsel.” Even though he may take the 3% off the top, he is not actually doing the legal work for the bond issuance; there are two large firms in Indianapolis who do the nuts and bolts paperwork for the whole state. The typical fee arrangement is the local attorney gets 1/3 (1% of the bond issuance) of the attorney’s share, the issuing firm takes 2/3 (2% of the bond issuance).
Thus, a $10,000,000.00 bond issuance lands the local attorney $100,000.00 for signing his name to some papers he doesn’t even prepare. That attorney has a financial incentive to recommend bonds be issued for every government project even though the government may have cash on hand to pay for it. There is a joke around here that one of them tries to get bonds issued for every park bench.
Financed? Ponzi schemes are pretty hard to finance.
As these plans amount to little more than economic slavery for the taxpayers, let alone the conflict of interest and kick-backs that would make the mob blush (where’s RICO when you need it?), the plans should be terminated w/ EXTREME prejudice.
Oh, how I wish we still had a Constitution.
“By this logic, all tax laws would need to be renewed every generation in order to get the explicit consent of the governed.”
Wait, are you saying that’s a BAD idea?
IMO, in times of peace (IE: we are attacked, not this BS of ‘nation building/etc.’) there should NEVER be a deficit. No progeny is/should-be responsible for the (bad) choices of the past.
Course, even the ‘consent of the governed’ doesn’t allow one to become a slave to another.
So, again, it all goes back to FOLLOWING THE CONSTITUTION....being mothballed 100+ yrs. ago.
You guys can give me your money to hold onto.
You can reach me anytime at PO Box 4756 in Antigua : )
Amazing....thanks for the realtime input.
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