Tag: pension disaster

Guest Post by Simon Black

At precisely 4pm on Friday October 17, 1975, New York City’s government would have a $453 million in debt to repay.

But literally the night before, the city’s government had only $34 million on hand.

It was the makings of an epic financial crisis: the wealthiest city in the world was about to declare bankruptcy.

New York City’s mayor Abe Beame had called US President Gerald Ford numerous times begging for federal assistance, but Ford refused. The nation had bigger problems to deal with.

New York was desperate.

But with only hours to spare, they managed to convince the powerful Teachers’ Union to use its gigantic pension fund to buy up the bonds and save the day.

The plan worked, and New York City was very narrowly able to escape bankruptcy.

Continue reading “And the winner of the next half trillion dollar bailout is…”

Guest Post by Simon Black

If your retirement plans consist entirely of that pension you’ve been promised, it’s time to start looking elsewhere.

As you probably know, pensions are giant pools of capital responsible for paying out retirement benefits to workers.

And right now many pension funds around the world simply don’t have enough assets to cover the retirement obligations they owe to millions of workers.

In the US alone, federal, state, and local governments, pensions are about $7 TRILLION short of the funding they need to pay out all the benefits they’ve promised.

Continue reading “The pension crisis is bigger than the world’s 20 largest economies”