Another Bubble About To Burst – “Wimpynomics” For Pensions
Repeat after me: I will gladly pay you Tuesday for a hamburger today…..
Have you noticed those new signs and ads out there, developers and home builders are saying that if you’re upside down in your current home mortgage that they will build you a brand new home and take your old home in on trade…. yeah, why does that sound eerily familiar?
Anyways, there’s a story on pensions I’d like to rant about. To those that get them, its awesome. The money they get grows on trees. Like: if you pay (read have deducted from you paycheck) 2 to 5% of your salary into a pension fund, and your employer is required to match it, you’ll be able to retire and collect that pension at half or more of your current income…..
Up to 10% a year goes into the fund, yet you get back 50 to 100% of your whole salary if not more…. Sounds like bullet proof accounting to me, maybe we should get Mr. Pension to take over at the Social Security administration. [snark] The money magically multiplies. Really? Like what you paid in to Social Security is just sitting there in a lock box waiting for you to retire….
Can I interest you in a slightly used bridge?
Well, the pension bubbles are all coming home to roost and the outlook is grim. Promises were made, but we can’t afford to keep them.
Already-strapped state and local governments are coming under increasing pressure to reduce pension benefits or increase taxpayer contributions that help pay for them because of new rules that would require them to report those obligations more honestly, advocates say.
The latest rules come on line from the bond-rating firm Moody’s at the end of this month. They are projected to triple the gap between what states and municipalities report they have in their funds and what they have promised to pay out to retirees. That hole would stand at $2.2 trillion.
The donut hole in the pensions is $2.2 Trillion. That’s almost twice the Obama annual deficit average over his term in office. Meaning that in order for Obama and Democrats to bailout pension funds we’d have to run a 100% deficit Federally to bail out the pension funds.
I know, I know, you paid it in so by gosh, you deserve to get yours… well, that “yours” is very likely going to come right out of someone else’s paycheck and should be going to fix a bridge or pay for a Cop or Firefighter but instead is going to go to you.And of course, taxpayers will be on the hook because who will want to be the bad guy and stand up and say, no. I know you are “owed” it, but you were lied to. Are you selfish enough to bankrupt future generations because you fell for a ponzi scheme?
Its the new Obama’s American dream. Write as big a check as you want, promise the world to someone to get their support, then blackmail the taxpayers to bail you out when that road you’d been kicking the can down finally comes to the edge of the cliff….
America’s downfall is going to be the promises Government made to maintain its power, not the poor choices of Wall Street, Boards of Directors, or business owners…..
Another trojan horse is waiting to unleash its ugly little ticking time bomb. Politicians of the past have kicked the can down the road. The cliff is in sight, will we stay the course, protect the status quo, and refuse reforms and honest solutions?