Posted on 01/22/2016 3:05:04 AM PST by expat_panama
Wall Street has only recently ended the third-longest bull market in history. But in July, when stocks were still near their 2015 high, the Pew Charitable Trusts reported that state and local pension debt nationally had barely fallen since 2009, despite years of market gains.
Now, with markets down more than 12% since summer, new pension debt is piling up...
Absent some startling development â like an even bigger runaway bull market, which few market watchers anticipate â the crisis will worsen.
At the root of the problem is a change in the financial structure of public pension funds...
Another problem: When funds did well in the market, politicians often gave away the gains...
After five consecutive years â from 1995 through 1999 â when the S&P 500 advanced by at least 21% annually, many pension funds were fully funded and handing out new benefits. But the bursting of the dot-com bubble in 2000 and subsequent broader market declines proved devastating. By 2003, government pensions had accumulated $233 billion in debt.
Where'd The Money Go?
Governments have made little progress since, especially after the 2008 financial crisis hammered stocks again. Even though investment gains averaged double digits for eight of the years since 2003, including increases in the S&P 500 of 29% (2003), 27% (2009) and 32% (2013), debt has now swollen to at least $1 trillion.
Many state systems have higher unfunded liabilities today than in 2003....
Taxpayers should also seek laws that bar politicians from being able to make key decisions that impact pensions, including manipulating accounting standards...
The biggest impediment to real reform has been the notion that a few good years of investment returns, combined with some additional contributions, will solve most pension underfunding. That's turning out not to be true.
(Excerpt) Read more at news.investors.com ...
Bingo!
IMO, the solution is online learning. It’s cost efficient, plus it weeds out quickly those who aren’t motivated to achieve.
The solution is returning to service based. Get rid of the property taxes, and those that have children pay for the education of their own brood.
Education centers would sprout up overnight to get in on the $$ pot. The best will be sought to teach for a price THEY can negotiate; and the parents can enroll with those teachers/centers that best suit their $$ and curriculum.
Beyond 8th grade, parents and children can decide where they’d like to be further educated. Trade, apprentice, vocational, arts, science, math, etc.
Then The People get to decide. Those w/out kids, or out of school age, will get to keep THEIR $$. Those that wish to f* off...get to pay for the ‘privilege’, until the learning centers kick ‘em out (services = $$, biz won’t allow f*-offs vs. bottom line). Teachers are hired on ability and/or knowledge. No taxpayers are held at point of gun for teacher/admin pay/bennies, facilities or overhead.
Yeah, it’ll never fly BECAUSE of the loss of political clout.
Online learning would be great, but the government has to prevent the shock to the system caused by telling the millions employed in the education industry that they are obsolete.
Not just that, but (especially here in NJ) many of the people having children are NOT the people paying taxes; the divide is becoming more and more clear with each passing day. I don’t believe any census numbers or projections because the reality I see around me is much more stark. If whites are still supposed to be 60% of the population, they are probably 10% of the under-20 population; these demographic changes are happening more quickly than anyone acknowledges (or the government will admit). Any walk past a playground or schoolyard belies the government’s official line.
One situation they did eventually admit was when Hispanics were projected to pass blacks by 2010, and it was announced after the 2000 census that it had already happened. Whites will find out the same way; they float a date of 2050 around now, but I suspect 2020 is more realistic. Less than 1% of white women I see are pregnant, while for Hispanic women it is probably 20% (I’m not kidding); this isn’t a temporary bump due to open borders, but a genuinely higher birthrate within our borders.
The service-based education centers you describe wouldn’t materialize because so many “breeders” have detached having children from supporting them financially; too many of the people having children today do so with the expectation that someone else will definitely be footing the bill for their schooling - and in many cases footing the bill for their housing and groceries as well. NJ is facing an evacuation of American taxpayers and their employers because both have tired of paying other peoples’ bills; now more and more of these areas abandoned by Westerners are simply teeming with non-whites with outstretched palms.
anyone on a govt pension had to realize that it was an outrageous scheme from the beginning...they had to know it was unsustainable....yet they kept asking for more...
I hope to be off the tax grid in a year or two, so I hopefully won't be bailing these fat pensions out....I'll be "poor" enough on paper....
I read the obits daily, and its astounding how many retired military live into their 90's receiving their pensions for over 50 yrs....and then wonder why their grandsons and grandtrs have such poor prospects in our economy....the govt eats all the economy to death...
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