If We Are NOT Funding Pensions...The Ponzi Unravels!!!
March 28, 2010
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WHO DO YOU THINK BUYS WALL STREETS JUNK???? That is right....much of it is purchased by public pension plans. Why do you think government and Wall Street would rather tax you to death than cut pension payments.......without pensions buying ever increasing amounts of Wall Street debt, the Ponzi Scheme would unravel and everything would be exposed.....just like Madoff. Expect pensions to be off limits.....EVEN IF THE CITY IS BANKRUPT.......until you have been taxed every dime you have!!!!!!!
In 2008, Vallejo, Calif., was nearly broke. Faced with falling tax revenues, rising pension costs, and unmovable public-employee unions, the city was unable to pay its bills and declared bankruptcy. Now, as it prepares to emerge from Chapter 9, officials in Los Angeles, San Diego and other cities across the state are looking to see if Vallejo has blazed a trail for them to get out from under their own crushing pension costs. What they're finding is that even bankruptcy may not be enough to break the grip unions have on the public purse.
A report issued by the Cato Institute last September noted that 74% of the city's general budget was eaten up by police and firefighter salaries and overtime along with pension obligations.
The study also found that lavish pay and benefit packages were a root cause of the city's problems. In Vallejo compensation packages for police captains top $300,000 a year and average $171,000 a year for firefighters. Regular public employees in the city can retire at age 55 with 81% of their final year's pay guaranteed. Police and fire officials can retire at age 50 with a pension that pays them 90% of their final year's salary every year for life and the lives of their spouses.
To permanently bring its spending in line with its tax base, however, at some point Vallejo will have to do something about its pensions. U.S. bankruptcy judge Michael McManus, as the National law Journal reported last March, "held the city of Vallejo, Calif., has the authority to void its existing union contracts in its effort to reorganize."
But when it came to voiding those contracts on pensions—a major driver of public expenses—the city blinked. The "workout plan" the city approved in December calls for cuts in services, staff and even some benefits, such as health benefits for retirees. However, it does not touch public-employee pensions. Indeed, it increases the pension contributions the city pays.(From Mish's Blog)
INCREASED CONTRIBUTIONS????? AND THE CITY IS BANKRUPT?????? SOON YOU TOO WILL UNDERSTAND.....WITHOUT PENSION FUNDS BUYING WALL STREET'S JUNK........THE GAME WOULD BE OVER!!!!!! HUNDREDS OF BILLIONS OF DOLLARS FLOW INTO PENSIONS EACH YEAR THANKS TO YOUR TAX DOLLARS BUYING AND BUYING AND BUYING. NO WONDER THERE IS A CRIMINAL INVESTIGATION STARTING AGAINST CALPERS.
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