UNTIL DEBT DO US PART

At least I don’t live in Illinois. My household share of the gold plated pensions owed to PA government workers and teachers is $6,200. But it is only rising by $900 per year, or 16% annually. Think about that for a second. The economy has been barely growing by 2% over the last six years. Wage increases for taxpayers have been 2% annually. But, our obligation to pay government drone pensions is going up by 16% per year. None of these costs show up in the “balanced” budgets passed every year. The feckless spine deficient corrupt politicians in these states don’t have the balls to tell the truth. There is absolutely no mathematical possibility that these pension obligations are honored. It’s just a matter of when all these states pull a Detroit and declare bankruptcy.

The fine people of Illinois each have a $19,000 obligation per household to pay the gold plated pensions of teachers and municipal workers. Message to America – don’t move to Illinois.

 

Chart of the Day

Just the Facts, Ma’am

October 10, 2014:  In 2013, pension debt for Illinois, California, Texas, Pennsylvania, Massachusetts, and New York increased by at least four billion dollars per state. From 2012 to 2013, these states had the largest pension debt increase across the 50 states.

State government officials are required to balance their budgets. Instead, they accumulate debt by hiding retirement costs  on their ‘credit cards,’ accumulating debt for future taxpayers to cover.

 

 State  2012 Pension Debt   2013 Pension Debt  Increase
 Illinois

$94.58B

$100.5B

$5.92B

 California

$53.44B

$59.43B

$5.99B

 Texas

$31.64B

$35.86B

$4.22B

 Pennsylvania

$29.26B

$34.02B

$4.76B

 Massachusetts

$23.95B

$30.26B

$6.31B

 New York

$8.75B

$16.99B

$8.24B

Clearly, the requirements for a balanced budget are not working.  All 50 states hide retirement debt from their citizens and legislators, in footnotes and external reports, making it difficult for

 

  • Legislators to work on sustainable options to reduce conflicts between current spending and pension funding
  • Citizens to participate knowledgeably in their government and hold their elected officials accountable

To prevent governments from accumulating “credit card” debt for today’s services that taxpayers will have to pay for in the future, Truth in Accounting believes states should adopt ‘FACT – Based Budgeting’  (Full Accrual and Calculation Techniques).

 

  • FACT – based budgeting requires each year’s budget to include estimates of year-end debt, as well as current year spending
  • Both legislators and citizens would have timely, transparent, truthful information to evaluate spending proposals
  • See page 12 and Appendix IX of Truth in Accounting’s 2013 Financial State of the States for more information

See CA, IL, MA, NY, PA and TX Pension Debt 2009-2013  – check your state by selecting ‘Edit Chart Criteria’ at the bottom of this chart. Then, select your state on the next page and scroll down to ‘Generate Chart.’

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Steve Hogan
Steve Hogan

Bug, meet windshield.

I want to see the looks on the government drones’ faces when they realize their gold-plated pensions just went poof!

TE
TE

Admin, Detroit is keeping their gold-plated pensions. I’m not kidding.

There has been little, actual, reformation. The plan isn’t finished yet, but the last I heard was the employees were looking at a 4-6% cut to pensions. I think they may have took a paycut, but we all know that will be rescinded at the first chance, it always is. Detroit’s “fix” is all kick-the-can, donations, theft from the rest of the state, gift from Obama, and screwing of the city non-bank, debtholders and vendors.

It is sad, really. But little has changed and the current levitation of the stock market, along with Federal funds (thanks all!) has covered up the rot.

When the market corrects it is going to be game on. The destruction of these promises is going to go forth like a wave, watch out for the ripples as the teetering politicians further align with the unions and corrupted private contractors to increase the regulation and debt load on the already decimated non-connected middle.

It is so inevitable, shame the denial is so deep.

ZIMZIM
ZIMZIM

Sadly, these pensions are overweight in municiple bonds; most of these people have not an idea that muni bonds are as dangerous as U.S. Treasuries.

Ilka
Ilka

These days, a lot of state government employees don’t earn enough to support themselves, much less a family. Government jobs are often located in metro areas, where housing is expensive. Some employees still have debt from college, which they struggle to repay. New debt is accrued just to hold on to that job when you have to live in the countryside where housing might be cheaper and you need a car to get to your job because public transportation is non-existant.

If you have money problems, I recommend you read Thomas McFreeman’s website “The Art of Debt Guerrilla Warfare”. I find the articles very informative.

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