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alstry (36.32)

If We Are NOT Funding Pensions...The Ponzi Unravels!!!

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March 28, 2010 – Comments (8)

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.

8 Comments – Post Your Own

#1) On March 28, 2010 at 10:48 PM, alstry (36.32) wrote:

This is the problem becoming a credit dependent consumer economy...without someone lending.....there really is no economy.  And right now, our public pension are lending much more than all foreigners combined.

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#2) On March 28, 2010 at 11:03 PM, poppawheeler (< 20) wrote:

I have often said to my children and now my grandchildren, when talking about govt. "We have created a monster that feeds upon itself and someday the feeding will end. That only occurs when there's no more food."

It's looking more and more like the food's gonna run out sooner than later!

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#3) On March 28, 2010 at 11:09 PM, alstry (36.32) wrote:

Why do you think government bailed out Wall Street and not the citizens???

San Jose must now contribute OVER 40% of police and fire salaries to pension plans.....about a decade ago it was about 10%....of much lower salaries I might add.

At some point, the private citizens simply don't have enough money to support govenrment and Wall Street's mother of all Ponzi schemes.  At that point, the game ends.....FOR EVERYONE STILL AROUND.

The trajedy now is we are foreclosing on dairy farmers en mass....some of the hardest working most productive citizens in our society....while many of the  Fools keep staring at the ticker??????

 

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#4) On March 28, 2010 at 11:46 PM, alasker (< 20) wrote:

I was thinking of your posts this weekend. My aunt who is in a teacher was telling me about how students (school age) in delaware have their lesson plans online so if they are sick for extended periods of time they can stay up to date with assignments. I asked my aunt why do we need buildings or teachers at all- we may need digital teachers to monitor progress- but even that could be outsourced. I think my aunt thought I was on crack.

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#5) On March 29, 2010 at 1:56 AM, APJ4RealHoldings (34.83) wrote:

wow

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#6) On March 29, 2010 at 3:03 AM, cashback79 (85.95) wrote:

hahahaha 00 outsource the digital teacher software makers and operate it all in the country with the best IT infrastructure, as long as the profits are flowing into the country doing the outsourcing

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#7) On March 29, 2010 at 3:04 AM, cashback79 (85.95) wrote:

hahahaha 00 outsource the digital teacher software makers and operate it all in the country with the best IT infrastructure, as long as the profits are flowing into the country doing the outsourcing

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#8) On March 29, 2010 at 9:59 AM, alstry (36.32) wrote:

alasker....

All revoluationary changes are difficult to adjust to at the beginning....by nature such changes have never happened before.

Take a look at a public company called Capellas....an online university growing rapidly.  Soon, many more players will enter the space...but for now, it is a clear example of where education may be going in the future.

We are implementing the technology we talked about ten years ago...combined with deleveraging, convulsions will simply grow from this point forward.

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