The Pension Ponzi Makes Madoff A Midget
Are you ready to learn????? For some of you the truth may be a bit unsettling.
The bill for San Jose to cover current and future retirement promises to its employees keeps getting steeper.
City officials said Wednesday that those costs will rise more than 43 percent in the budget year starting in July, increasing the retirement tab by $60 million.
The pension funds are made up of contributions by both workers and the city, plus investment earnings. But workers' contributions are smaller and have risen only slightly.
By contrast, city contribution rates have steadily climbed because taxpayers must cover market losses and much of the expense for new benefits. Police officers and firefighters in particular have seen benefits rise substantially over the past decade.
A decade ago, the city contribution rate for firefighters was 15.7 percent of payroll — meaning that for every $100,000 the city paid in salary, an additional $15,700 went toward retirement benefits. That rate has climbed to 28.31 percent in the current year and will be 44.61 starting in July.
For police, the city contribution rate has risen from 15.7 to 26.89 percent since 2000 and will be 45.03 percent in July. For the rest of the city work force, San Jose's contribution rate has risen from 16.09 percent in 2000 to 24.01 percent today; it will be 29.59 percent in July.
The employees' share also will increase, from 12.96 percent now to 15.57 percent in July for officers; from 12.4 to 13.7 percent for firefighters; and from 9.35 to 10.3 percent for other city workers.
What you are about to soon learn is our economy will crash if our pension funds, retirement accounts, and endowments are not buying our debt. If that debt is not backed by true productivity, the debt becomes toxic because more debt must be issued to service the earlier debt. As time goes on, if this process continues, soon the new debt needed to service the prior debt exceeds the rational ability to pay.....it is at that point you reach either hyperinflation where money becomes essentially worthless, or the system delevers rapidly.........in either case the economy implodes.
It is not a question whether Alstry is right.....the outcome is a mathematical certainty.....and the Fed and government know this outcome as the system prepares for the inevitable. Exactly what government is preparing is anyone's guess.
In the interim, order to maintiain the illusion of being able to issue ever increasing amounts of debt for our cities, counties, states and corporations, so most of us can still get a a paycheck or prevent our retirement and pension funds from imploding, we must contribute ever increasing amounts to our pension funds to purchase this debt.
It really is not very complicated for those who chose to think...but thinking is a rare commodity these days...especially among those with higher degress.
In San Jose, we are now up to contributions of around 50% of income to maintain the Pension Ponzi....at this rate, we will soon be at 100%. If we do not substantially increase our pension contributions, our nation's debt will not be able to be serviced as incomes are evaporting.....if we do not keep increasing our pension contributions, we will soon have to start taxing our assets as incomes will no longer being sufficient.
Welcome to Zombulation Nation.....I have to admit, I thought more of you would have caught on quicker.....oh well.
Do you find it strange that it is usually a Greek Guy like Markopolis and Chanos to uncover the really big Ponzi schemes?....;) It must be something about Ouzo.