Saturday, October 15, 2016

AMERICA'S PENSION FUNDS COLLAPSE UNDER THE WEIGHT OF OBAMA-CLINTONOMICS

State, Local Gov’ts Unable to Meet $5,600,000,000,000 Pension Fund Commitment: U.S. gov'ts have promised pensions to their employees, but can’t afford to pay.

State, Local Gov’ts Unable to Meet $5,600,000,000,000 Pension Fund Commitment



By Rachel Greszler | October 14, 2016 | 4:00 PM EDT


Alaska tops the list in unfunded liability per capita for pensions at $42,950. (Wikimedia Commons Photo)
$5.6 trillion.
That’s how much arecent report from the American Legislative Exchange Council, or ALEC, estimates state and local governments across the U.S. have promised to their employees, but can’t afford to pay.
Normally, if an employer promises its worker more than it can pay, its workers lose out, but that’s unlikely to be the case here.
Since most state and local pension promises represent legal obligations, it will be state and local taxpayers who bear the burden of their governments’ unfunded promises.
According to the report, state and local governments as a whole have set aside only 35 cents for every dollar of pension promises.  Their $5.6 trillion of unfunded pension liabilities works out to $17,427 for every man, woman, and child in America (or about $70,000 for a family of four).
Since 2009, 89 cents of every new dollar for education in Illinois has gone to teachers’ retirement costs, leaving only 11 cents for actual education.
Alaska tops the list in unfunded liability per capita with $42,950 while Tennessee has the lowest at $7,246.  Overall, only five states have per capita unfunded liabilities under $10,000 while 15 states exceed $20,000 per capita. That’s a high price to pay for state and local government’s failure to properly administer their employees’ pension funds!
When the pension bills come due depends on the status of the particular plan.  Some plans, such as the city of Chicago’s Teachers Pension, are already taking a toll on taxpayers and citizens. Since 2009, 89 cents of every new dollar for education has gone to teachers’ retirement costs, leaving only 11 cents for actual education. And nearly 90 percent of Illinois’ recent $32 billion tax hike went towards public employee pensions.
That should be a warning to other cities and states that fail to address their growing unfunded pension liabilities.
How did state and local governments accumulate such massive unfunded pension liabilities?  It was pretty easy, actually.  They employed what the ALEC report’s authors called “Enron-style” accounting to downplay their necessary contributions and then often failed to make those contributions.
Unlike private pension plans that are required to use certain interest rate assumptions, state and local pensions can use whatever interest rate assumptions they want (as can union-run private pension plans).  A simple jump in interest rate assumptions can reduce plans’ required contributions by half.
Unfortunately, overly optimistic assumptions don’t translate to reality.  Since pension plans, not surprisingly, have failed to consistently produce the 7.5 percent annual returns they assume, they now face massive shortfalls.
In addition to downplaying their required contributions, states often fail to contribute as much as they are “required” to, or even skip pension contributions altogether.  In 2013, only 21 states made their required contributions.
Despite the fact that pensions are part of employees’ compensation, and legal obligations, many state and local governments have effectively treated them as slush funds, available for tapping whenever other spending takes political precedence.  Shorting pension contributions is no different than issuing new debt, except that it’s less apparent and doesn’t violate many states’ constitutional balanced budget requirements.
The nature of defined benefit pensions in the hands of politicians will never change – there will always be pressure to short-change pensions and pass the buck to future taxpayers.
State and local governments need to transition out of pensions and into defined-benefit retirement contributions.  This would put cash, instead of unfunded promises, in workers accounts, and would shield taxpayers from bearing the burden of public employees’ unfunded retirement costs while also trying to save for their own retirement.
In the meantime, state and local governments need some self-imposed restraint to prevent them from continuing to shortchange pensions. Since public pensions represent riskless guarantees, states should use riskless rates of return to establish their required contributions.  Moreover, states should make required contributions mandatory, instead treating them as discretionary.

Rachel Greszler is a senior policy analyst in economics and entitlements at The Heritage Foundation's Center for Data Analysis.

Editor's Note: This piece was originally published by The Daily Signal.


BARACK OBAMA AND THE GOLDEN AGE OF CRONY BANKSTER LOOTING…. And not one went to prison!

FOR 8 YEARS BARACK OBAMA’S BANKSTER CRONIES AT CITIGROUP RULED AMERICA’S ECONOMY AND LOOTED IT INTO A DEPRESSION

“Citigroup’s recommendations came just three days after then-President George W. Bush signed into law the Troubled Asset Relief Program, which allocated $700 billion in taxpayer money to rescue the largest Wall Street banks. The single biggest beneficiary was Citigroup, which was given $45 billion in cash in the form of a government stock  purchase, plus a $306 billion government guarantee to back up its worthless mortgage-related assets.”

MUCH MORE HERE:


“As president, Obama not only funneled trillions of  dollars to the banks, he saw to it that not a single leading Wall Street executive faced prosecution for 
the orgy of speculation and swindling that led to the financial collapse and Great Recession, and he personally intervened to block legislation capping 
executive pay at bailed-out firms.”

 WAKE UP, FOOLS! It’s already here!!!

 

AMERICA’S TWISTED ROAD TO REVOLUTION:

 

Fighting back Wall Street’s Looting and Rule



http://mexicanoccupation.blogspot.com/2016/09/america-nation-ruled-wall-streets.html


 

OBAMA-CLINTONOMICS:



THE FINAL TRANSFER OF AMERICA’ ECONOMY TO THE SUPER RICH!

 

http://mexicanoccupation.blogspot.com/2016/09/barack-obama-and-his-crony-bankstershow.html



THE GREAT DEPRESSION IS JUST AROUND THE/ALL CORNERS!


 AMERICA’S ECONOMIC ARMAGEDDON


Under Obama-Clintonomics, the rich became VERY rich and we got the tax bills for their bailouts and crimes!

AMERICA’S FINAL DAYS: The Global Looting of Bill & Hillary Clinton – unconvicted.

When asked to compare Hillary Clinton to Donald Trump, D'Souza said no contest.  "She is basically Obama plus gangsterism.  The Clintons are like Bonnie and Clyde.  Their goal is to steal America. 


In Hillary's America, D'Souza documents how Democrats transitioned from pro-slavery to pro-enslavement; the longstanding Democratic political war against women; how Hillary Clinton's political mentor was, literally, a cold-blooded gangster, Saul Alinsky; how the Clintons and other Democrats see foreign policy not in terms of national interest, but in terms of personal profit; and how Democratic-controlled cities have turned into hotbeds of crime and corruption.  American Thinker interviewed him about his latest projects

HILLARY CLINTON: Closet Republican

…and Openly a LA RAZA SUPREMACIST agent for Mexico!

"The same period has seen a massive growth of social inequality, with income and wealth concentrated at the very top of American society to an extent not seen since the 1920s."


"He (Trump) is able to get a hearing because millions of people are being driven into economic insecurity and poverty while the rich and the super-rich continue to amass obscene levels of wealth. He is able with some success to divert mass discontent along reactionary nationalist and racialist channels precisely because what passes for the “left” in American politics, anchor by the Democratic Party, has moved ever further to the right, culminating in the Obama administration which has presided over endless war and an unprecedented redistribution of wealth from the bottom to the top of the economic ladder."

OBAMA-CLINTONOMICS: You were wondering how many jobs went to illegals and how well Obama’s crony banksters have done???


The sputtering economic recovering under President Obama, the last to follow a major recession, has fallen way short of the average recovery and ranks as the worst since the 1930s Great Depression, according to a new report.

Had the recovery under Obama been the average of the 11 since the Depression, according to the report, family incomes would be $17,000 higher, six million fewer Americans would be in poverty, and there would be six million more jobs.

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