| Why we need to let states go broke |
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Tuesday, August 10, 2010
Chapter 11
9 comments:
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azlibertarian said...
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Rodger,
The biggest problem the states have are their (over-promised and un-deliverable) penisions, and here's the dilemma the states are in....
When a company like Delta or Chrysler came into financial problems and needed to go into bankruptcy, their pension plans rolled over to the Pension Guarantee Benefit Corporation. The PBGC is essentially an insurance company--they insure pensions in the same way that the FDIC insures bank deposits. The PBGC is going broke and is going to need a bailout--to the tune of $33B, if I recall correctly. But the point here is that insurance for the private-sector pension plans existed.
On the other hand, the public-sector pension plans have no PBGC equivalent. No "insurance" at all. If a municipality got into trouble, they'd just declare bankruptcy and/or raise taxes and these pensions would be part of that. But given that public-sector pensions are $1T underwater, and that there is no insurance backing at all, bankruptcies are going to have to be widespread and deep. I'm not saying that Morris is wrong about the need for these .gov bankruptcies, but we ought to be frank about what that means. -
8/10/10, 7:30 AM
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Anonymous said...
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We just convert them from defined-benefit to defined-contribution style plans, and the retirees just get their benefits reduced to whatever the government contributions support.
Remember that the PBGC doesn't insure the benefits of a plan. They simply guarantee a minimum level of benefits. So having the PBGC take over a plan significantly reduces the costs of it, even if we have to bail out the PBGC. -
8/10/10, 7:42 AM
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jess said...
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I've noticed, in the last few weeks, how few know of the terrible finanacial burden on states from the benefits packages they gave to their employees. Most, when they find out, are outraged, especially when the statistics are showing how sweet of a deal it is to work for the government.
It's a house of cards and the wind is starting to blow. -
8/10/10, 8:12 AM
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Anonymous said...
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Yes Jess and the wind stinks!
PBGC only covers the annuitized payment - no lump sum payouts allowed. You will get the payment but, nothing more. I believe they can also reduce the payment by a certain amount - not sure on that one. I cashed mine out - don't trust anybody anymore.
I live in Rhode Island and our wonderful General ASSembly supposedly put out a balanced budget...only one little problem, they are counting on $100 Million from uncle osama to balance it. Now they are hearing it will be more along the line of 70-75 mill. We are now more screwed than we were before.
When I see san fran nan telling us she has things under control and that they are "draining the swamp" I want to puke. This bimbo is so deluded (or the lying slut I always thought she was) in that she actually believes the American People buy this crap. They really think we are that stupid. This just pisses me off more.
By the way, one of my old posts at LGF seem to have made me famous. Bing search for Bolivar and you will see that when I wished Don Rumsfeld well I was crucified.....sure is good to be a conservative. I know we are right and to see my post cut and pasted just confirms it - they have nothing so they gotta make it up.
Bolivar -
8/10/10, 9:41 AM
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Chuck from Tacoma said...
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It is the same here in Washington state Bolivar. Our state is costitutionally mandated to have a balanced budget. Thus the legislature realies on the federal government to go farther in to debt by giving us the shortfall. Probably the same with most states.
They can brag about balancing the budget while securing enough funding from the feds to pay off union employees, welfare mooches and other democrat purchased constituantcy's. -
8/10/10, 10:29 AM
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Anonymous said...
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Chuck, our ASSembly is touting their great accomplishment and it is very hollow. They just kicked the can down the street and sidled our kids with the problem. Democraps and Repukes are all pussies - nary a nut among them. I know there are a couple in DC that get it - Paul Ryan for example but, most are totally in the pocket of osama - uh obama's largesse.
It makes me madder than hell to see this and I do all I can here but, this is demoncrap central. This is supposedly the most liberal state and in many ways it is. A lot of pansy-assed liberals just going along with the plan. A lot of sheep who will ultimately be the first to be slaughtered. I wonder if any of them will read this and see themselves?????
Bolivar -
8/10/10, 11:20 AM
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Anonymous said...
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I got an email via Organizing for America from a school teacher in Philadelphia asking me to sign a petition supporting the Pelosi public union bailout to keep her from possibly being laid off.
She claimed she was not a special interest, but just a school teacher in danger of losing her job because of Philadelphia budget shortfall.
I asked her why it was ok for the Federal government to force me, a Virginian, under threat of imprisonment, to contribute to a Phildelphia school system. I reminded her that I have my own school system to pay for, and I don't give a damn about hers. I suggested she look for a second job, one of those Uhbama created jobs, if she can find one.
Thieves. Whores. Liars.
Lt. Col. Gen. Tailgunner dick -
8/10/10, 11:42 AM
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Juice said...
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We are living on a union pension. Hubby put in over 20yrs working CA prisons, beginning his career in a maximum security, administrative segregation unit. Dangerous guys in there with nothing but time for making weapons and wreaking havoc. Liberal bleeding hearts have the inmates more protected than the officers. Liberal Union Reps support the protection of dirty officers and phony injuries to fleece the funds. Liberals throw money at problems like gasoline on fires and then default to the reduction of vital services, to get. more. money. The amount of stupid, wasteful, spending is eternal. We are a PERS family. That fund had to be protected by law, from lawmakers, trying to raid the piggy bank to balance the budget. It's a vicious cycle that will never end as long as fiscal conservatism is not practiced. It's way bigger than unions.
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8/10/10, 1:14 PM
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Anonymous said...
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Another trick libs like to use when money gets tight is to reduce the amount the state contributes to the pension.
That idiot Tim Kaine tried to do that in VA last year as a means of balancing the budget - reducing the state money set aside with a guaranteed benefit plan only creates a worse problem down the road!
Of course he prolly knew the republicans would be the ones to have to deal with it so what did he care.
Asshole.
TFV -
8/10/10, 4:37 PM
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