From Birch Gold Group
After the 2008 financial crisis, huge companies like AIG asked for billions in bailout cash, claiming they would close up shop if they didn’t get the funds.
The truth of the matter is that they had screwed up and wanted U.S. taxpayers to foot the bill. This situation left a bad taste in the mouths of most Americans.
Fast forward to today’s chaotic COVID-19 market, and it looks like history may be repeating itself. This time, the U.S. is on the verge of bailing out airlines. And soon to follow could be public pension funds.
An article in the Wall Street Journal shed light on the first U.S. state to request bailout funds:
Illinois has requested a federal bailout of its struggling public-employee retirement plans, which had unfunded liabilities topping $469 billion in 2018, according to a Federal Reserve study.
Specifically, according to Chicago’s Daily Herald, Illinois Senate President Dan Harmon requested $44 billion in bailout cash.
The problems in the state’s public pension fund are well known, and the fact that Harmon requested emergency funds should only serve to make those problems more obvious.
The Daily Herald lamented, “Despite pumping more and more into the pension systems each year, Illinois continues to slide deeper into debt.” And, the article goes on, Illinois may not be able to get financial help from the private sector any longer:
Excessive debt driven by the pension crisis has left Illinois with the lowest credit rating in the nation, just one notch above junk status. That means private investors may not be willing to lend Illinois money much longer.
It would seem that asking taxpayers who are already concerned with their own situation for more money would be a bad idea. But that’s what Illinois is doing.
Worse, Illinois isn’t the only state with big pension problems. In fact, quite a few others could soon be seeking bailouts. Consider the map below from the American Legislative Exchange Council, which ranks state pension funding from worst (50) to best (1):
Each of the lowest ranking state pensions (in darker shades of blue) could be a candidate for a bailout at some time in the near future.
And regardless of whether strings are attached to this funding, Forbes says bailing out pension funds isn’t a good idea:
The pension crisis has been the result of a long line of politicians refusing to take responsibility for pension funding. A set of mandates from the federal government will motivate Illinois politicians, to be sure — they will become all the more innovative at finding loopholes and seeking waivers, rather than taking responsibility.
But perhaps even more important is the fact that bailing out state pension funds during this crisis could affect everyone.
Pension or Not, Here’s How No American Will Be Spared
If state governments start getting bailed out, the first and most obvious way you would be affected is through increased taxes.
But even if states don’t get a bailout, they aren’t likely to just let their pensions wither and die. So, they could start looking for ways to cut back on services.
One example, according to a different Forbes piece, shows that states may begin prioritizing failing pensions over infrastructure:
Berkeley city council is taking criticism for prioritizing pension payments ahead of public works projects. Voters approved bond issues supposedly dedicated to infrastructure but the city is apparently not doing the work.
States could even cut emergency services like police, fire, and medical response.
Protect Yourself While Politicians Beg for Pension Bailouts
Even though you may not have a say when the pension crisis might strike your wallet, you can still make your retirement portfolio more resilient.
You can consider adding some stability to your portfolio by shifting a percentage of assets into precious metals like gold and silver.
But whatever you do, don’t wait. The ripple effects of public pension failures aren’t going to wait for anyone.
After 8 long years of ultra-loose monetary policy from the Federal Reserve, it’s no secret that inflation is primed to soar. If your IRA or 401(k) is exposed to this threat, it’s critical to act now! That’s why thousands of Americans are moving their retirement into a Gold IRA. Learn how you can too with a free info kit on gold from Birch Gold Group. It reveals the little-known IRS Tax Law to move your IRA or 401(k) into gold. Click here to get your free Info Kit on Gold.
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“Illinois has requested a federal bailout of its struggling public-employee retirement plans”
what this amounts to is taxpayers in texas and vermont being tapped to make good on a chicago politician’s vote-buying promise.
“States could even cut emergency services like police, fire, and medical response”
the cuts will be implemented tactically. “who are the remaining citizens? cut their services.”
According to the map, Texas is worse than Illinois in pension funding. Just saying.
actually, the real situation is that by “illinois” is meant “chicago”, and by “texas” is meant “austin”. this whole pension thing is very deliberate, pushed by the usual suspects, and they try to get away with it by hiding it in the larger entity.
Please, grant every state a bailout. That would hasten the destruction of the US dollar because taxes can’t possibly provide the funds. The currency will come from the Federal Reserve’s magic of currency from thin air.
Once that starts, the Dollar will hit it’s eventual hyperinflation much sooner and we can all start the rebuilding process which should include brand new guillotines and hanging scaffolds once the Fed Gov is but a bad memory.
“Once that starts, the Dollar will hit it’s eventual hyperinflation much sooner”
unfortunately no. the dollar is not a fiat currency, such that printing excessive amounts causes inflation. rather it is a fiat debt currency, such that printing it at all creates temporary inflation followed by permanent deflation. really, it’s a tool for wealth transfer – for every dollar they print up, we owe them that and more in labor, and while there’s no limit on fiat debt dollars there is a definite limit to the labor required to pay off the debt. this leads to defaults, eventually to universal default, the printers gain all the seized collateral, and everyone else is left in permanent inextinguishable debt to the printers. that’s why they’re happily printing up and freely handing out trillions upon trillions of fiat dollars- because that’s how much we’ll owe them.
I understand how the system works. The end result is hyperinflation. Between then and now, there will be episodes or segments of the economy that will experience deflation, serious, serious deflation. It will not be a linear decline.
Real estate is going to drop like a rock. Fancy cars, boats, planes, bullshit art, etc are going to find a new much lower value very soon. Anyone that needs to sell anything is going to discover that it’s going to be a buyers market. Cash will be king. That’s why the bankers are loading up on free currency now.
Those desperate for cash are going to sell their kidneys for their next meal, so to speak. As desperate sellers depress the overall market for all manner of things, those that don’t have to sell will see their property of all kinds get dragged down to the new market level. They get to feel the effects at a later date when they do decide to sell, maybe years later.
That will last till a balance is achieved. Then the hyperinflation effects kick in and that’s the end of the US Dollar. Cash will be trash; wipe your ass with it.
What comes next should be sound money based on some commodity that the asshat finance types can’t conjure up via computer. I suspect, however, that an SDR or other ‘world currency’ will be adopted that will survive a few years and then have the cycle repeat all over again.
It is the reliance on currency instead of money and currency from thin air that is the ultimate problem and the political class and their henchmen in banking and finance want to continue their rape of the population. They will probably succeed because the average person is dumb as a stump (they vote – proof positive) and will request a heavier set of chains from their saviors in government.
“That will last till a balance is achieved. Then the hyperinflation effects kick in”
no. then everything will be nailed down to keep the “balance” in favor of the federal reserve’s owners.
To both SAO and Gman above.
We don’t/can’t know the final path to the ultimate demise of the dollar but rest assured as you both have said, the Bankers will end up owning it all and it will cost them nothing in the process.
Amazing times…
“Gold, get you some”.
Lead.
Productive, wholly-owned tangibles that produce a reasonably steady stream of whatever constitutes income in whatever constitutes currency seem to me to be a better option than cash, metals (lead included), stocks and bonds, short-term bills. notes or short-term bonds, or pretty much anything else unless one believes in total societal collapse.
I live in a country that supposedly experienced societal collapse 19 years ago, except that outside of the largest urban areas didn’t. This time around imho, it’s not likely to either, although conditions are potentially worse. That’s where I live, however; I’m no longer qualified to comment on the USA.
The pension funds are a steaming pile of crap in most places even with the FED currently stuffing the markets. The true value remaining is literally pennies on the dollar.
The politicians lied and the fund managers are thieves. Too bad, so sad. You shoulda paid attention.
You want me to subsidize the crime and criminals? Get bent..I’ve said here on TBP years ago the pensions were a disaster awaiting the truth of some sunshine.
Let this be a warning to those who have failed to own precious metals AWAY FROM THE PRYING EYES OF THE SYSTEM. Desperate govts local, county, state and federal will be clawing for everything you’ve got. On paper you need to look like a pauper but with a little box of shiny coins buried where the headstone says ” Here lays Fido, the best “golden ” retriever in the world.”
“I’ve said here on TBP years ago the pensions were a disaster”
amateur. I was telling people in the 80’s that they’d never collect social security because the white women weren’t having any babies. they all called me a sexist patriarchal woman-hater etc. and now here we are.
You’re right about pensions but as for buried metals, my grandfather buried gold when confiscation time rolled around back in 1933 and passed away before it could be dug up. Good luck with precious metals. For my money, one is better off owning things that can generate income even if it’s by way of barter.
YES! Your own personal currency. Your hands and mind are the best gold.
Ummm …. How about telling the public pension beneficiaries they gotta take a haircut, eh?
“the fathers have eaten the sour grapes, and the children’s teeth are set on edge.”
Only up votes ? Your question should have 100.
Fuck the publicpensions. Why should Joe Blow finance the gold plated pension for a never sweat grifter.
Who could not trust this guy:
http://www.securefuturescolorado.org/author/agottlieb/
“who becomes unionized and therefore a political class empowered way beyond its intelligence” (to finish your question). Thank you.
In Illinois public pensions are like a wiining lottery ticket. It has been rigged for too many years. I have seen the retirement parties and the very happy retirees
.Can retire at age – gret this – 55. Then receive up to 75 percent of your salary averaged over the prior 5 years
You do not have to stop working. Nirvana.
Maybe that’s rhe reason property taxes are killing Illinois homeowners., just guessing.
But with the financial apocalypse being programmed, may all be a wash. But the public pension retirees here sure had it good
Stop this. Every week you have to read the same story. Less than 15% of seniors receive public pensions. Over 95% of seniors receive benefits from Social Security and/or Medicare. There is no way, no how, they can fulfill their promises to the latter. That day of reckoning is not this week, or this year, so no one is worrying about it. But, that day will be here and there will be pain, if not cuts. NO way do they bail out the the 15% (the state pension funds), because they cannot bail out the 95%.
What are the odds that at least some at the state level will want to tax their way out of their pension problems?
100%
they don’t see it as a problem, they see it as an opportunity to raise taxes. so, 1.
The percentages of people receiving does not matter.
It’s the total dollar amount obligated.
A variety of public pension recipients receive $60000 to $ 300000 annually. Every year till they die
Let’s not forget politicians get these public pensions rates also. That can only be done by taking advantage of a system When people see these numbers, they almost go into shock
Talk about having it made.
“NO way do they bail out the the 15% (the state pension funds), because they cannot bail out the 95%.”
you don’t get it. certain People will be “bailed out”, and the cattle won’t. that was the plan all along. it always is, in every generation.