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Do not give in to Evil, but proceed ever more boldly against it

Monday, August 9, 2010

Reality Beckons (Government Pensions)


Denninger flushes the illusions of current and future .gov retirees:

Since I've said "I told you so" a few times of late, this time I'll just do this.....

  • Unfunded pension liabilities are approximately $2.5
    trillion, compared to the reported amount of $493 billion.

  • Unfunded liabilities for health and other benefits are
    $558 billion, compared to the reported $537 billion.

  • Thus, total unfunded liabilities for all benefit plans are an
    estimated $3.1 trillion — nearly three times higher than
    the plans report.

If you need this translated, it's very simple:

You're not going to get the money you think you were promised.

If you're a government employee and are counting on some sort of pension plan, get over it.

The money does not exist.

It cannot be acquired.

If you scream about "But the state constitution says we're protected!" I will simply remind you that it is easier to change a State Constitution than it is make money that doesn't exist magically appear.

To put this into context, the shortfall is double the annual Federal Budget deficit - at today's bloated amounts. It is five times the average federal budget deficit during Bush's administration.

Again: You're not going to get the money, and most of it isn't, as is commonly believed, in the form of medical benefits - it's in direct cash pension compensation.

You were lied to by the plan administrators.

They (intentionally) used ridiculously-rosy projections of "gains" in their portfolios.

Their "projections" are outrageously unsound, as is their accounting.

Your public-sector unions lied to you too. They led you to believe that you could have the equivalent of a free lunch and that these plans could be funded and would pay. You can't and they can't.

Now you can get angry at "the people" all you want. The fact of the matter is that the people who BS'd you aren't the public - they're your so-called "union representatives" and the so-called "pension managers", all of whom you hired and who report to you, not to the taxpayer.

More than two years ago I wrote a couple of Tickers on this subject and warned you that you were going to get hosed - severely. That the funds you think are there are not and would not be.

If you are a state or local government employee and thought I was some sort of nut a couple of years ago when I was warning you that you had better start both raising hell and socking back your own funds, you better read this report - and then get VERY angry, as you've now lost two more years of time with which you could have been trying to do something about securing your own retirement.

The programs you believed would protect it will not be there when you expect them to be.

Period.

6 Comments:

Blogger Joel said...

As far as I'm concerned, they can bloody well starve. I have exactly zero sympathy.

August 9, 2010 at 10:34 PM  
Blogger J. Croft said...

And the potential recruitment pool expands... Just be certain to come at the newly disillusioned with arguments and approaches they can understand. They will be willing to listen they just have to be able to COMPREHEND what you're saying at the level they're at.

August 9, 2010 at 11:16 PM  
Anonymous Anonymous said...

Message from the Boss:

Don't worry about the trillions, we have something to save you with, a printing press.

August 10, 2010 at 1:14 AM  
Anonymous Defender said...

Remember when Russia decided to print new money? There was a deadline to exchange the cash stashed in your home, because it was going to be worth the same as Monopoly money soon. They knocked three zeroes off so the 1,000-ruble note you turned in got you a one; a 10,000, a ten. Plus, they knew who the money "hoarders" were. Those people showed a shocking distrust of their wise and benevolent masters, didn't they? Much like Americans when FDR ordered the gold to be turned in.

August 10, 2010 at 5:42 AM  
Anonymous Anonymous said...

Just keep in mind that military personnell are government employees, albeit probably the lowest paid.

August 10, 2010 at 5:53 AM  
Anonymous Anonymous said...

aarrgg. The truth is setting in. Im a city fireman. I know my pension isnt going to be worth anything. Im mad at them for their promises and im mad at myself for believing it. I wish I could take my 10 percent of my pay that I put in(as well as the city's share) and invest it in meaningful stuff (beans and bullets).Im right wing enough that I dont want bailed out...I would be happy with giving me what I put in. Far as Joels comments... i guess he's entitled to his opinion even if it sucks.

August 10, 2010 at 5:36 PM  

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