Retirement? Don’t count on it.

RetirementEspecially if you’re a “public employee.”

Public employees – and particularly cops, firefighters and teachers – have been working diligently and effectively with elected Democrats (for the most part) for thirty plus years to rape municipal and state taxpayers.  And I’m not using the word “rape” lightly, it’s intentional.

They may very well discover that greed doesn’t pay when they discover that their retirement will consist of learning to smile and repeating “Welcome to Walmart” 500 times a day.

Here’s there problem in a nutshell.

Cities and towns can no longer raise property taxes and local sales taxes in a willy-nilly fashion as they’ve been used to for 30 years.  Local taxpayers have pretty much been bled dry.  Most do not have the ability to charge an income tax.  Unlike the federal government, the vast majority are required to balance their budgets and they can’t print money.

For most places retirement plans and healthcare are the number one out-of-control budget item for local governments.  They appear to be locked into “defined benefit” pension plans that enrich the public employee unions and rape the taxpayers.  States like California and Illinois are controlled by liberal Democrats who are essentially on the payroll of public employee unions.  In addition, they have laws or state constitutional requirements that public pensions cannot be modified.  At all.

That may well be changing thanks to Stockton, California.  We noted last week that the Bankruptcy Court judge in charge of that case is hinting that he’s likely to be forced to rewrite pension rules for the city, without regard to state law to the contrary.  The case will likely end up in the Supreme Court, and there, the Bankruptcy Court is likely to be upheld as long as one of the more conservative justices doesn’t die or retire.

Should that happen, you can look for a tsunami of bankruptcies, or at the very least, a tsunami of renegotiated pension and healthcare benefit packages in almost every state.

The “underfunding problem” with these benefit accounts is considered “normal” in virtually every major city – they’re run by liberal Democrats – and in the Blue states.  Not to say states run by some Republicans don’t have problems because they do as well, some Republicans are indistinguishable from Democrats.

The recovery in the U.S. state pension system suffered a setback in 2012 as the huge funding shortfall in a large swath of state pensions swelled more than 20 percent, interrupting two years of improvement following the devastation of the financial crisis.

The shortfall in 109 of the nation’s state pension plans, which guarantee retirement for millions of public workers such as police, firefighters, and teachers rose to $834.2 billion in 2012

It also shows state pension fund managers are continuing to up their exposure to less conventional assets such as real estate, private equity, hedge funds and commodities as they try to boost their returns and diversify away from over exposure to volatile equities.

As cities and states fall farther behind, something’s got to give.  As Stockton, San Bernardino and Detroit are proving the money isn’t going to come from local taxpayers.  City services can only be cut so far.  Stockton has gone from being a rising star to a city whose murder rate is in the top 10 nationwide because they’ve fired most of their police force.

The problem with socialism is that sooner or later you run out of other people’s money.  (Bless you Margaret Thatcher!)

Look for Democrats and unions to have a “come to Jesus” moment, and in fact to a small extent it’s beginning to happen.  Democrats in New York, California and Illinois are being forced to take on their union benefactors because they’re about out of OPM.  No really big changes yet, but they’re coming.  Look for Detroit to be a harbinger of life in the future for unions, the fiscal hole finally got too big and the incompetent affirmative action management of the city for the last 40 years is finally coming home to roost.

Our biggest concern now should be to keep the incompetents in the federal government from bailing out their brethren in the hinterlands.

 

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  • Hank_M

    “Our biggest concern now should be to keep the incompetents in the federal government from bailing out their brethren in the hinterlands.”

    Good point. And the first question this raises is “With what, more borrowed money?”

    But the answer is already out there, the private sectors 401K’s and IRA’s.
    They’ll be after that next and that is when the XXXX hits the fan.

    Did Thatcher ever talk about what does happen when you run out of OPM?

    This isn’t going to end well. No wonder gun and ammo sales are skyrocketing.

  • Hank_M

    “Our biggest concern now should be to keep the incompetents in the federal government from bailing out their brethren in the hinterlands.”

    Good point. And the first question this raises is “With what, more borrowed money?”

    But the answer is already out there, the private sectors 401K’s and IRA’s.
    They’ll be after that next and that is when the XXXX hits the fan.

    Did Thatcher ever talk about what does happen when you run out of OPM?

    This isn’t going to end well. No wonder gun and ammo sales are skyrocketing.

  • It’ll all get simpler when the money runs out.

    Not better.

    Just simpler.

    “What about Obamacare?” – “We don’t have any money. We’re cancelling it. Good luck, be careful, watch your health. Sorry.”

    “What about Welfare?” – “We don’t have any money. Cutting back to bare minimums. Here’s a coupon – 2 burgers a week per person, cheese and pickle extra. Sorry.”

    “What about Medicare?” – “We don’t have any money. Here’s discount coupons for your local pharmacy. Sorry.”

    “What about Defense Spending?” – “We don’t have any money. Here’s a North Korean phrase book. Sorry.”

    “What about The Department of Education?” – “We don’t have any money. You got your North Korean phrase book? Sorry.”

    “What about the EPA?” – “We don’t have any money. Best you form a citizen committee locally. Sorry.”

    “What about the Department of Energy?” – “We don’t have any money. Besides, we don’t create any energy, we just get in the way of the folks who want to. Sorry.”

    “What about the TSA?” – “We don’t have any money. You’ll have to grope yourself. Sorry.”

    “What about Obama’s vacations?” – “Are you CRAZY? The man needs a break! He’s working crazy hard to get you what you need!”

    • Hank_M

      Yeah, we’ll still have a 2 – 3 trillion dollar budget and no money available for any services.

    • jim_m

      It will get a lot simpler, They will just print the money they need regardless of what that does to the actual value of the money. The dems have already signaled that they will do this. If it puts everyone in the poor house that is a feature, not a bug.

      obamacare will move forward regardless of the cost in dollars and human lives as it is critical in controlling the lives of the people.

    • Commander_Chico

      Yes, it will all be simpler when the decline of the USA become the fall of the USA. Then we can wait for the Chinese.

      Waiting for the Barbarians

      What are we waiting for, assembled in the forum?

      The barbarians are to arrive today.

      Why such inaction in the Senate?
      Why do the Senators sit and pass no laws?

      Because the barbarians are to arrive today.
      What laws can the Senators pass any more?
      When the barbarians come they will make the laws.

      Why did our emperor wake up so early,
      and sits at the greatest gate of the city,
      on the throne, solemn, wearing the crown?

      Because the barbarians are to arrive today.
      And the emperor waits to receive
      their chief. Indeed he has prepared
      to give him a scroll. Therein he inscribed
      many titles and names of honor.

      Why have our two consuls and the praetors come out
      today in their red, embroidered togas;
      why do they wear amethyst-studded bracelets,
      and rings with brilliant, glittering emeralds;
      why are they carrying costly canes today,
      wonderfully carved with silver and gold?

      Because the barbarians are to arrive today,
      and such things dazzle the barbarians.

      Why don’t the worthy orators come as always
      to make their speeches, to have their say?

      Because the barbarians are to arrive today;
      and they get bored with eloquence and orations.

      Why all of a sudden this unrest
      and confusion. (How solemn the faces have become).
      Why are the streets and squares clearing quickly,
      and all return to their homes, so deep in thought?

      Because night is here but the barbarians have not come.
      And some people arrived from the borders,
      and said that there are no longer any barbarians.

      And now what shall become of us without any barbarians?
      Those people were some kind of solution.

      Constantine P. Cavafy (1904)

      • herddog505

        Well, at least Tom Friedman will be happy. He just LOVES him some Chicoms.

  • MartinLandauCalrissian

    Public employee unions should be illegal like they were before 1958.

  • 914

    Only the minting of the trillion dollar Oboner coin can save the liberal utopia.

  • LiberalNightmare

    If your a .ember of a public employees Union your retirement is safe. Plenty of 401k accounts to raid. Just remember to vote for Obama.

  • Mavdog

    Greed knows no boundaries. The 3 cops in my family looking forward to their $100k pensions are *Republican*.

    A retired school admin I know getting $100k+ pension admitted it’s a scam on taxpayers yet gamed it so she can pass half her pension to her child for her child’s life.

    My 3 other friends at a municipality are looking forward to 100% pensions and probably will at $200k+/yr each.

    Each person can take millions depending how long they live. So it can be $10 to 30 million for just those 7 people alone. Don’t think it adds up like a Ponzi scheme?

    Think again. http://www.pensiontsunami.com

  • Mavdog

    Greed knows no boundaries. The 3 cops in my family looking forward to their $100k pensions are *Republican*.

    A retired school admin I know getting $100k+ pension admitted it’s a scam on taxpayers yet gamed it so she can pass half her pension to her child for her child’s life.

    My 3 other friends at a municipality are looking forward to 100% pensions and probably will at $200k+/yr each.

    Each person can take millions depending how long they live. So it can be $10 to 30 million for just those 7 people alone. Don’t think it adds up like a Ponzi scheme?

    Think again. http://www.pensiontsunami.com

  • Mavdog

    Greed knows no boundaries. The 3 cops in my family looking forward to their $100k pensions are *Republican*.

    A retired school admin I know getting $100k+ pension admitted it’s a scam on taxpayers yet gamed it so she can pass half her pension to her child for her child’s life.

    My 3 other friends at a municipality are looking forward to 100% pensions and probably will at $200k+/yr each.

    Each person can take millions depending how long they live. So it can be $10 to 30 million for just those 7 people alone. Don’t think it adds up like a Ponzi scheme?

    Think again. http://www.pensiontsunami.com

  • eatingdogfood

    If The Democrats Didn’t Give ” Sweetheart Deals ” To Your Public Service Union.
    Goon Employees To Get Reelected; You Would Have Plenty Of Money and The.
    Taxpayer would have Some Spare Change in His Pockets! Democratic Hustler
    Politicians + Corrupt Union Goons = BANKRUPTCY BABY! Time To Bring.
    RICO Conspiracy Charges Against The Hustler Corrupt Democrats and the.
    Criminal Unions!

  • I’ve been reading this very same diatribe since 2008 when the markets fell. Here in California this attempt to renege on public pensions has been adjudicated up through the CA Supreme Court. A Teapublican supervisor out of Orange County wasted well over $2 million of taxpayers dollars in this absurd journey. Any reputable attorney will tell you the Contract Clauses in both the US and CA Constitutions protects public pensions.

    Yell, scream and cry all you want. Your arguments become more invalid as the economy recovers, and you know what, the sky never did fall. After reading the writers bio this article doesn’t surprise me a bit.

    • herddog505

      Shorter:

      HAH HAH! SUCKERS!

    • Ken in Camarillo

      A bankruptcy supersedes all contracts. The court won’t arbitrarily cancel a contract, but it will alter it if necessary to allow the entity to survive and protect everyone’s interests. Pensions: a reduced pension is better than no pension, so the court will reduce pensions if that’s what it takes for the entity to survive to pay the reduced pension.