Posted on 05/23/2017 10:12:55 AM PDT by george76
Guv Brown is going to “loan” $6 billion from a previously unknown slush fund to keep CalPERS doors open. That is after he GIVES then $500 million, so they can keep sending out checks. This is an economic disaster for the people of California—and another reason to leave for a Free State beofre your family finances are destroyed.
...
employees don’t share in the cost of Unfunded Liabilities. 100% of that cost falls on citizens, whose services get crowded out and taxes get raised to pay off the liabilities.
Jerry Brown proposes to borrow from a citizen-funded restricted fund to boost pension contributions. The loan would be of a variable rate nature that, based on current yield curves, is expected to cost 3–4% but is not capped. The proposed source of repayment for the loan is a taxpayer-funded account established by Proposition 2 to accelerate payments on certain state debts but that’s just a fig leaf since state debts eligible for acceleration dwarf the size of the Proposition 2 fund. No investment return is guaranteed and citizens have all the risk. Employees take no risk and will collect their pensions regardless of the outcome.
If enacted, Brown’s proposal would set a terrible precedent. With $70 billion in restricted funds and more coming in from a recently boosted gas tax, what’s to stop more such loans? Every public-employee-controlled pension fund would learn the same trick and be rewarded for transferring wealth from citizens to employees by setting Normal Costs unfairly low. Also, who would enforce payback of the loan? In which state official’s political interest would it be to press for repayment? There is good reason to believe repayment would be deferred or ignored.
Brown should withdraw his proposal.
(Excerpt) Read more at capoliticalreview.com ...
The governor thinks Bernie Madoff is a role model!
Who says slavery and involuntary servitude have been dead in America? Why not everyone get on the govt payroll, then EVERYONE wouldn’t have to worry!! /s
Unless your state has an “exit tax”...
No. Absolutely not. You people contributed to the sewer known as kalifornia, and you should be required to stay there. Everyplace you go, you ruin.
The free world is closed to you.
...ping....
I’ll be begging at the intersections.
There will always be property and people in a state to tax ever higher. If you can't pay the new, super-high tax rate, they get your property for free and sell it to someone else.
“States can’t file for bankruptcy, nor do they ever have to.
There will always be property and people in a state to tax ever higher. If you can’t pay the new, super-high tax rate, they get your property for free and sell it to someone else.”
1. Yes, it’s true States can’t file for bankruptcy but their cities and counties can and have here in CA. Most of the pension deficit is from local entities, not the state. And in the municipal bankruptcies here thus far, the courts have told the cities that they CAN cut pension benefits as part of their reorganization. But thus far, they have managed to avoid having to take that avenue. It is also true that they have papered over their financial problems and will be back in bankruptcy court sooner rather than later and then the pension cuts will, of necessity, be on the table.
2. Proposition 13 limits property taxation. It was a vote of the people and would have to be overturned by a similar action. So the State hasn’t an avenue here to raise revenue and/or take your property. And besides, there would needs be have to bel someone who wanted to purchase it. The only time real property here can be reassessed is when it sells, and that is allowing us aging folks to stay in the homes we bought/built 30 or 40 years ago, and is stagnates a large part of the RE market here.
Puerto Rico is a territory, and they have managed to file for bankruptcy.
It will happen in states—they will simply stop paying their bills and the creditor attorneys will find a way...
They may give it another name (lawyers love to make up new concepts) but it will be de facto bankruptcy.
“The free world is closed to you.”
I understand the sentiment but the free world does not actually exist.
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