I got up this morning and just wanted to relax, read the paper and drink a couple cups of coffee. Then I open up my local paper and read the story below. By the time I was done the story, I thought my head was going to explode as I was cursing politicians across the land. When is this country going to wake up and realize this two party system of government is a joke? It is nothing but a game to distract the masses as both parties jointly screw the citizen taxpayers of this country.
This story proves my point. Just read the first couple sentences and you realize this country is doomed to economic collapse. The public school pension obligation in my state of PA went up 100% in the past year and will go up another 50% this year. That is mind blowing, but no one cares or even understands the implications. HOW COULD THIS HAPPEN?
Well the bastion of GOP conservatism, friend of George W, and the first generalisimo of DHS, Tom “Code Orange” Ridge signed a law in 2001 that guaranteed 50% pension increases for most legislators and 25% increases for more than 300,000 state workers and teachers. He didn’t give a fuck about the future. He was moving on to bigger and better things creating a new agency to strip Americans of their freedom and liberty. This REPUBLICAN dirtbag sentenced the taxpayers of PA to funding massive future deficits to pay union government workers’ outlandish gold plated pensions.
The next governor of PA was the ultra-liberal slimeball from Philly, Fast Eddie Rendell. You certainly couldn’t expect this tax and spend DEMOCRAT to ever cut anything. Just before he left office he signed another law that used the old tried and true method of not funding the pension obligation with cash until after 2030. Just extend and pretend. The American way.
Well, here is some news for the 300,000 government drones. You will not get those gold plated pensions. Promises do not equal cash. The money is not there. It won’t be there when you retire. The taxpayers will not be ponying up to fund your retirement. You’re as screwed as we the taxpayers are screwed.
The politicians of both parties are responsible. They are liars, thieves and traitors. It will get nasty when the clueless masses finally get a clue. The money is all gone.
Pension costs a big worry for Pa. public schools
HARRISBURG, Pa. (AP) — A spike in pension obligations could hardly come at a worse time for Pennsylvania’s public schools.
Gov. Tom Corbett, who has pledged to oppose any tax increase, will be proposing his second state budget on Feb. 7, and public school officials are worried about getting more bad news after working through the most difficult budget year in just about anyone’s memory.
The Corbett administration is projecting that its school employee pension obligations will rise by $320 million next year — or more than 50 percent — after more than doubling in this fiscal year.
Meanwhile, public schools are suffering through cuts of more than 10 percent to state aid. The cuts, approved by the Legislature and Corbett, fell most heavily on Pennsylvania’s poorest school districts, which officials argued get the most state aid.
It seems that no one in the public school community expects Corbett to propose more money for public schools next year, and he may even seek another round of cuts in light of his administration’s projection of a year-end deficit and rising costs in other parts of the budget, such as Medicaid and debt service.
Thomas Gentzel, executive director of the Pennsylvania School Boards Association, said Corbett administration officials have told him that they didn’t plan to cut public school aid again.
“But the question is, what are they counting?” he said.
If Corbett counts pension dollars as part of the state aid that helps keep the lights on and teachers in classrooms, then “there could be some significant cuts in major funding areas, although the overall funding may not be going down,” Gentzel said.
Corbett’s top budget adviser, Charles Zogby, declined to comment.
Rising pension obligations are being driven, in part, by lackluster investment performance on the money being paid into the system and a 2001 law under then-Gov. Tom Ridge that guaranteed 50 percent pension increases for most legislators and 25 percent increases for more than 300,000 state workers and teachers.
There’s not a whole lot that can be done about it.
The state constitution bars curtailing pension benefits for current or retired state employees and teachers. Meanwhile, a 14-month-old state law signed by then-Gov. Ed Rendell is designed to blunt the severity of the pension cost spike by deferring some payments past 2030.
That means that pension obligations shared by the state and school districts will jump to 12.4 percent next year, rather than 29.7 percent — a difference of about $2 billion, according to the Public School Employees’ Retirement System.
This year it is 8.7 percent, which still comes as something of a shock to school budgets after paying under 5 percent for much of the last decade and as little as 1.2 percent one year. School employees pay above 7 percent of salary, and have done so for much of the past decade.
This year, school districts are absorbing the rising cost of pensions while weathering sluggish tax collections and the loss of about $850 million in state aid for instruction and operations. To balance budgets, districts are laying off staff, freezing wages, closing buildings, renegotiating contracts, tapping reserves and using textbooks and computers longer.
In the Brookville Area School District in northwestern Pennsylvania, district officials are projecting a $400,000 increase in pension costs next year — or almost 2 percent of this year’s anticipated revenue from tax collections and government aid — to split between the district and the state. That will be compounded by increases in costs for employee salaries and health insurance premiums, out-of-district placements and cyberschool tuition, business manager Jason Barnett said.
This won’t be the last time school districts must wrestle with pension costs: The school employees’ retirement system estimates that the cost to the state and school districts will triple in four years and then stay at that level until 2035.
If there’s a silver lining, it’s that some school boards began saving for a spike in pension costs that they thought would be higher and come sooner. But because of the Legislature’s efforts to blunt the spike, some districts may have a little surplus cash to help absorb more losses in state aid next year.
“The good thing is they have that cash to weather this storm a little bit,” said Jim Buckheit, the executive director of the Pennsylvania Association of School Administrators. “At least, many have it.”
A 25% increase is outrageous in the best economy much less this one. Completely insane.
Here is a short and funny video that demonstrates the US debt on a family level:
And as for screwing America, here’s more: Poverty in America likely to get worse: http://www.guardian.co.uk/business/2012/jan/11/poverty-america-likely-worse-report
The latest census data shows that nearly one in two of the US’s 300 million citizens are now officially classified as having a low income or living in poverty.
The report argues that a better measure of how well an economy is creating employment is the “jobs-to-people ratio”. It says that in a healthy economy the range is between 0.60 and 0.70. The US fell within that range until it fell to 0.582 at the end of 2009. It had risen only to 0.585 in November 2011.
“These data suggest that the reported progress in reducing the rate of unemployment may not be as encouraging as we think since increasing numbers of the unemployed may simply be giving up on the search for a job,” the report said.
KaD
I posted the video by itself. Even dumbasses should get it.
Now all we need to know (especially if you are a PA taxpayer) exactly what are the current “savings” and funds in the pension system invested in? Greek bonds, perhaps? Or Spanish CDS instruments? Did they happen to investing through MF Global? How are they “making their nut” as far as the 8% investment return required to make current funds even work at all?
Inquiring non-PA taxpayers would love to know..
MA
I wager they bought mortgage backed securities from Wall Strip urr Street.
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HZK
That is a fantastic visual. Awesome.
Wouldn’t it be crazy if school districts bought their own bonds through a seperate entity and payed themselves interest from revenue?
Wow! Novel concept…
@Colma:
I think you meant to say:
Wouldn’t it be crazy if the public school teachers contributed more to their pensions, like the private sector which contributes almost 100%?
@Admin:
Thank you. I have finally figured out how to use that “Paint” program, lol.
Hope@ZeroKelvin: Have you wondered why that cruise ship is laying on it’s side in the picture you posted?
Last November I was in New Orleans sitting in the tourist Mall eating area next to the port and noticed a cruise ship tied up at the dock. It was very tall, and looking through the entrance to the ship at the quarter deck; how narrow and top heavy the ship seemed to be. I said to her that I would not want to be on that ship during rough weather.
Seeing this ship in the picture I realize now my concern was on target; it has a shallow bottom. Besides that it is a tin can. No wonder it was sliced open for 150 feet. It could not have been traveling very fast as it was so close to shore. So a 150 foot gash is not a good indication of a sea worthy ship.
No thanks to any cruises for me on one of the ships. This should be a wake up call to anyone considering taking a luxury cruise. Make sure the ship you are on is sea worthy and the crew is trained in emergencies. Further yet; this is a sure sign of the declining quality of everything being built. It shows that corporations are in business to make profits; nothing else. Deception is now very common in advertising and marketing. Just because something looks good on the surface a closer inspection reveals flaws and low quality. This ship is top heavy and that is why it rolled over. A picture is worth a thousand words.
Hope: I was speaking to the actions of the Fed and Treasury….
Another heartbreaking sign of the cost of economic collapse in America:
http://carolynbaker.net/2012/01/13/the-horrific-toll-of-depression-suicides-linked-to-recession-as-budget-cuts-force-out-mental-health-professionals/
Meanwhile, homelessness, domestic violence, and child abuse are rising. Nationally, nearly 1 million schoolchildren were homeless in the 2009-2010 school year, a 38 percent increase in four years, according to the U.S. Department of Education.
University of Pittsburgh researchers reviewing hospital records from parts of Washington, Pennsylvania, Ohio, and Kentucky found that the rate of children younger than five brought to emergency rooms with abusive head trauma—brain injuries from being shaken or struck— was 65 percent higher during the 19 months of official economic recession that began in December 2007 than in the previous four years. Sixteen percent of the children died.
@Colma. State or fed.gov pensions, same same.
@Thunderbird: These boats are built with shallow drafts so they can get into more harbors. My understanding is that the keel is very heavy and there are tons of stabilizers and whatnot to keep them from tipping over. But none of that will help you if you’re not paying attention to where the bottom is and/or the capitano is a drunken idiot or AWOL. Sort of a metaphor for the US Ship of State, heh.
@KaD.
Here’s some more economic doom from Cleveland. Seems that there are soooo many abandoned/foreclosed homes that have been looted of every single bit of metal or fixtures, that the county is demolishing these wrecks to help preserve whatever property value attaches to the remaining homes.
It is a head-exploding tale of bankster’s putting people into over-valued homes, refusing to help modify the loans when the recession hit, refusing to tend to the homes when the foreclosure came and the people walked away. So now the county has to spend ever more vanishing monies to demolish these homes that have been rendered worthless.
Amazingly, there are still some people making mortgage payments on a $200K note even though their house is worth $50K. ***shakes head at the essential goodness of some people*****
http://www.cbsnews.com/8301-18560_162-57344513/there-goes-the-neighborhood/
And so it goes, a downward spiral to DOOM.
Hope,
As kids, we neighborhood ruffians had a saying that went like this; tit for tat , fuck my dog, and I’ll fuck your cat.
In a nut shell , this is what all war boils down to.It’s unsanitary and unpredictable.
It’s an analogy of Newtons Third Law of Motion .You get what you bring …or as the CIA succinctly put it, it’s blowback , bitchez..
Fred Reed spells it out sose’ even the simple understand…
http://www.fredoneverything.net/Candidates.shtml
Advice to a Generic Candidate
Fred to Change Course of History
January 8, 2012
Last night on the lobotomy box I encountered yet another candidate for the presidency, a Mr. Santorum, threatening to make war on Iran. I can’t decide whether the idea is more frightening than fascinating, or fascinating than frightening. I do suggest that the combined candidates do not have the military competence of a stuffed bear. Given that the principlal business of the United States is war and preparation for it, do we want a martial analphabetic in charge? One does not let children play with chain saws. (From all of this I exempt Ron Paul, who appears to be sane.)
To save the republic, if any, from another routine military disaster, I offer the following thoughts.
To begin, I will ask the following questions of the candidates, and for that matter of Mr. Obama, and of the Secretary of Defense, a generic bureaucrat.
Can you explain: Convergence zones, base bleed, Kursk, range-gate pull-off, artillery at Dien Bien Phu, IR cross-over, Tet and queen sacrifice, Brahmos 2, CIWIS, supercruise, side-lobe penetration, seven-eighty-twice gear, super-cavitating torpedoes, phased arrays, pulse Doppler, the width of Hormuz versus the range of Iranian cruise missiles, DU, discarding sabot, frequency agility, Chobham armor, and pseudo-random PRF?
These, gentlemen, are the small talk of serious students of the military. Here I mean men like David Isby, author of such books as Weapons and Tactics of the Soviet Army for Jane’s, which you likely have never heard of, or William S. Lind, probably the best military mind (though, or because, not a soldier), that I have encountered. If you are unfamiliar with them, and with the things listed above, you are unfamiliar with the military. Yet you campaign for possession of the trigger.
Perhaps a little humility, perish the thought, and a little self-examination might be in order.
Peering into your own depths, you will probably find that the humility does not come easily. In my decades of covering the armed services, I noticed among men a belief in their innate jock-strap competency regarding wars. Men who would readily admit ignorance of petroleum geology, ophthalmology, or ancient Sumerian grammar nonetheless believe that they grasp matters military. Usually they do not. In particular, they have an utterly unexamined belief in America’s military invincibility.
Candidates should be wary of this. Instead, most of you propose ultimata to Iran as one would threaten a three-year-old with a spanking. You clearly think that the American flotilla would quickly thrash the impudent Persians with no unexpected consequences. Do as we say, or the fleet will teach you a jolly good lesson.
So thought Philip II in 1588.
A little reading wouldn’t hurt. I would strongly recommend A Legacy of Ashes, by Tim Weiner, on the CIA, and We Meant Well, by Peter van Vuren, a former State Department guy on how Iraq actually works. You will be most surprised. I accept in advance your gratitude for these suggestions.
Once a candidate from the relative bushes gets elected, as may happen, he becomes a captive of Washington in about ten minutes. This too you should bear in mind. You will be briefed by the CIA, which will spin things so that you believe what it wants you to believe. The spooks will radiate lethal charm and speak with the assurance of a higher order of being. This will give you a sense of admission to a special tree house where everyone has a Captain Marvel secret decoder ring (two box tops and a dollar fifty). And, in Washington, you will have access to no other view. Gotcha.
You will be briefed by the Pentagon by generals with firm handshakes, steely gaze, obvious intelligence, and a convincing understanding of the world as consisting chiefly of threats. They are very good at this. You do not become a general without expertise with Power Point and the slick gab of a confidence man. Generals too are politicians. They will carry you along like a wood chip in a spring flood. And you will pay the price.
A powerful skepticism is here well advised. The belief that military men know about war is beguiling. It is their trade, is it not? Surely they must be authorities. Dentists know about dentistry. Soldiers must know about war. But how often when you go to a dentist do you return without teeth?
In fact career officers live in a mental world not well adapted to winning today’s wars. You need to understand this. Theirs is a world of aggression seeking an outlet, of institutionally inculcated confidence unrelated to external reality, of suppression of dissent. Fatal bad judgement is common, and recently almost the rule. If you think this implausible, consider:
When the Japanese attacked Pearl, their military thought it would win, Yamamoto excepted. When the Wehrmacht went into Russia, it thought it would win. So did Napoleon. When the Germans attacked in 1914, they thought they would win, the Schlieffen Plan being infallible. When the Confederates shelled Sukmter, they thought they could win. When the French took on the Viet Minh, they thought they would win. When the Americans went into Viet Nam, they thought they would win. When they went into Iraq, Somalia, Beirut, Afghanistan….
And now you, our newly elected, fresh-caught president, contemplate a shooting war with Iran. Those who favor this idea will assure you that it will be short and sweet. Shock and Awe. Duck soup. A cakewalk. The Iranians will just take it, perhaps put up some slight and hapless resistance, and roll quickly over. Our airplanes, after all, say varooom and pow-pow-pow and boom.
Good luck.
Note that in the foregoing list of wars, all were expected to end quickly. This should not surprise. Military men live in the psychic world of the cavalry charge, of decisive battle, of courage, heroism, and glorious victory. Modern militaries are designed with shsort-and-sweet in mind, with tanks ships and aircraft intended to fight other tanks ships and aircraft. Unfortunately wars nowadays are more like dealing with a recalcitrant bureaucracy. They go on and on. Concentrated firepower doesn’t work well against dispersed enemies. The treasury bleeds, the public wearies. Quick victory seldom comes. The Pentagon thrashes and thrashes every more desperately, a saber tooth in the tar pits of La Brea. Just give us a little more time, a few more troops, a surge….
Reflect that the Pentagon hasn’t won a war since 1945, unless you count titanic eruptions like Grenada. Yes, it usually wins the conventional battles, as it did in Afghanistan, as it did in Iraq, Mission Accomplished, but then the enemy deploys the most fearsome weapons of the last half-centry: the AK, the RPG, and the IED.
The Pentagon can bomb Iran with impunity, as it could Afghanistatn. It thinks it can keep the Straits open, as it thought it could do all the things in the past that it couldn’t. How many burning supertankers does it take to discourage the rest?
Then the unexpected comes. It turns out that the enemy is not as stupid as the strategy required. Pehhaps thousands of Iranian troops infiltrate into largely Shiite Iraq, which blows again. Oh fun.
If you can’t win any war at all, start a larger one. And you, Mr. Santorum, or Romney, or Gingrich, will hold the bag. Such a deal.
great article, thanks flash. man, i love fred. don’t always agree, but he is great.
Public pensions are under-funded for all the reason stated. But one of the biggest reasons is the high smoothing rate used to calculate contributions that has been employed has been unrealistic.
The smoothing rate for public pensions averages has been set at 5%-8%. This is fraud. The rate is way too high. No way any pension fund is getting those kinds of returns in this market.
That’s why the ratings agencies are about to lower the boom. They’re lowering the the credit ratings of every city and state in the USA, forcing the unions and pols to come to the table and renegotiate pension contributions, benefits and contracts.
Moody’s lowered Illinois ratings last week. Many more to follow.
The public union party is officially over.
HZK: Yeah, I saw that. Having lived in Cleveland much of my life I can say this is probably the best course of action; and one long predicted by Michael Ruppert. Besides, we’re going to need to free up the land, especially in urban/suburban areas, for food production once TSHTF.