The Phaserl


Pandemic of pension woes is plaguing the nation

by John W. Schoen, CNBC:

Detroit, you’re not alone. Across the nation, cities and states are watching Detroit’s largest-ever municipal bankruptcy filing with great trepidation. Years of underfunded retirement promises to public sector workers, which helped lay Detroit low, could plunge them into a similar and terrifying financial hole.

A analysis of more than 120 of the nation’s largest state and local pension plans finds they face a wide range of burdens as their aging workforces near retirement.

Thanks to a patchwork of accounting practices and rosy investment assumptions, it’s not even clear just how big a financial hole many states and cities have dug for themselves.

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2 comments to Pandemic of pension woes is plaguing the nation

  • rich

    The pandemic is the disregard for rule of law……………….

    The Pariah Shortage

    As far as the two costliest fiascoes of the last decade go—the Iraq war and the subprime-mortgage crisis—it’s difficult for many of us to move on in the absence of any sort of rational resolution. The Obama administration has shown scant interest in getting to the bottom of how we let these two disasters bring the country almost to its knees. Which is something of a mystery.
    In the absence of a cathartic resolution to the past five years of financial misery brought about by the banking industry, the savings-and-loan crisis of the 80s and 90s may be instructive.

    The deregulation-fueled subprime-mortgage explosion and crisis of the past decade wiped out nearly 500 banks and, according to the nonprofit group Better Markets, will end up costing taxpayers at least $12.8 trillion. That’s more than 100 times the cost of the S&L crisis.

    Furthermore, not only did the architects of the subprime-mortgage crisis get no comeuppance, many of those in charge of failed financial institutions left their posts having pretty much won the lottery.
    To say that Eric Holder has been ineffective as the nation’s chief law enforcer would be an understatement, especially when it comes to financial institutions.Before he went into government, Holder worked at the esteemed Washington, D.C., law firm of Covington & Burling, where he was one of the top attorneys in its white-collar criminal-defense division.

    Earlier this year, Lanny Breuer, who had headed the criminal division of the Department of Justice under Holder—and was therefore the point man on the department’s ineffectual subprime investigations—went back to work for Covington & Burling, where he had been a partner prior to his brief spell in public service. He’ll be getting a reported $4 million a year.

    With the cost of the Iraq war totaling $1.7 trillion, and U.S. military fatalities approaching 4,500 and the number of wounded nearing 35,000, the American cheerleaders of the invasion, President George W. Bush, Vice President Dick Cheney, and Defense Secretary Donald Rumsfeld, continue to spout their mantra “Even knowing what I know now, I would do the same thing over again.” It’s meant to be an all-purpose waiver of responsibility for what happened. In truth, it’s as infuriating as it is nonsensical.

  • Rodster

    Pensions are and will continue to be a huge problem in the future. Making promises to public employees that are unsustainable doesn’t make sense because it’s the TAXPAYER who foots the pension bills. There are some retired city workers in this country who are getting pensions in the 100-500K per year. Come on, the math doesn’t add up. You can’t keep doing this and not go broke.

    In the private sector you don’t work, you don’t get paid. The government is not about making money or turning a profit. They are always about over promising for a vote.

    Detroit got there first but this will be the norm around the country.

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