pafret Loc: Northeast

“The Pension Collapse Is Starting in Illinois”


“The Pension Collapse Is Starting in Illinois”
by Birch Gold Group

After degrading for decades, America’s public pension system is finally at its breaking point, and the first shoe is about to drop in Illinois. Is this the beginning of the end? Illinois isn’t the only state underwater. New Jersey, California, and several others are close behind. And when one falls, the rest could quickly follow. When that happens, we’re poised for a vicious chain reaction that could decimate our economy. Americans everywhere will feel it - young or old, pension holder or not. Here are the risks, and why you may want to prepare…

Troubling Harbinger in Illinois: The epicenter of the U.S. public pension crisis is in Illinois. This should give you an idea of how bad things are there: On top of the state pension program being utterly insolvent, Illinois can’t even afford to pay lottery winners or feed prisoners.

Illinois legislators are grasping at straws. According to a recent report, the state has $15 billion in unpaid bills and $251 billion in unfunded liabilities. $119.1 billion of those unfunded liabilities are tied to shortfalls in the state’s failing pension program. After months of desperate number crunching, Illinois finally passed a budget this week. But legislators employed massive tax hikes to make it happen - a 32% increase on state income tax and 33% increase on state corporate tax. Illinois’ new budget doesn’t mean much, though. It raises a paltry $5 billion, just a drop in the bucket when you look at the state’s $15 billion deficit.

Even Illinois Governor Bruce Rauner agrees that it’s a hopeless, last-ditch effort: “This is a two-by-four smacked across the foreheads of the people of Illinois,” Rauner said. “This tax hike will solve none of our problems and in fact, long run, it’ll just make our problems worse.”

And if all that wasn’t enough, Moody’s is putting Illinois under consideration for a credit downgrade -potentially making it the first U.S. state to receive “junk” rating status. If that comes to pass, borrowing costs for Illinois will uptick dramatically, and it could be the final nail in the coffin.

Just the Beginning: The situation in Illinois is taking center stage right now, but several other states are poised to follow. And when Illinois does fall, it will only accelerate their demise. Kentucky, New Jersey, Arizona, and Connecticut are at the top of the list. Their pension woes and budgetary shortfalls are nearly as big as Illinois’.

And the rest of the country? It’s only marginally better off. Bloomberg reports that just 15 states have pension funding ratios above 80%. U.S. public pensions are underfunded by at least $1.8 trillion, possibly as high as $8 trillion, according to expert estimates. They’re paying out more money than they’re taking in, plain and simple. And they’re falling hopelessly short on their projected returns too. Most funds aim for approximately 7.5% return, but they barely broke 1.5% last year.

America’s public pension system is nothing but a tinderbox waiting to be lit, and Illinois just struck a match. No matter what, the only way this quagmire of pension insolvency can end is in a pile of ashes. That alone is sufficient reason for Americans to start seeking safe haven stores of wealth right now.

Consider the Fed’s most likely response to this imminent collapse, which will only make matters worse. It’s safe to assume the Fed will fall back on its old tricks from 2008: print more money and use quantitative easing to slap a band-aid over the problem. While the Fed tries to pretend away this pension collapse with fast-and-loose, helicopter monetary policy, inflation will surge and the dollar will drop like a stone. All this shows is that, more than ever, pensions are snowballing into insolvent oblivion. And sadly, a collapse is the only thing that will stop them.”
- https://www.theburningplatform.com/

private

I wonder how many recipients are even paying attention much less worried while assuming the gov't will bail them out exactly as this article describes. Another can kicked down another road.

JFlorio Loc: Seminole Florida

Most Americans pay no attention until their check doesn't arrive.

Oldsailor65 Loc: Iowa

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I blame these problems on the policies of liberals and RINO's and crooked unions over the past 50 years.
Let's start at the top of the pyramid to make adjustments to pensions and benefits.
This would be the pensions and benefits of members of Congress, the Senate and other overpaid
Federal government bureaucrats and the relatively same people in State jobs. These people will
not be hurt.
It's the little people who lived paycheck to paycheck most of their life who counted
on retiring on a relatively small livable pension who be the most impacted.

pafret Loc: Northeast

All of these and the rest of our elected officials are equally to blame. We need some major revisions to our Constitution.

Term limits. Eight years is sufficient
Laws apply equally to everyone, Congress included. Slander, libel and the other political crap they indulge in will be subject to suits the same as the rest of us, no more immunity.
No Congressional exemptions from medical or any other Social legislation and Congress gets a raise right after Social Security gets one and Congress' raise is one percent less than Soc Sec..
Congress gets vested in a pension after five years, as the rest of us do and they do not retire with 100 percent of their salary.
Poiliticians are prohibited from being a board member or principle in any charity until they have been out of office two years.
Corporations are legal fictions to conduct business, they are not people and have no rights. They are to be prohibited from any political contributions whether in money or goods and services.
Universal right to work law, unions subject to the same restrictions as corporations.
Freeze government hiring and force the existing departments to identify the work they do. Consolidate and remove excess personnell. No increases in departmental budgets unless an increase in workload can be clearly demonstrated.
No spending by any bureau, beyond payroll and office maintenance, without specific authorization by act of congress.
Demilitarize the excessive number of departments, which form the secret army. There is no reason for the Social Security Administration to be buying huge quantities of ammunition.
Create one department to disburse grant moneys of all kinds. Each bureau, which needs to give aid, grant moneys, loans etc. must apply to one central disbursing point, whose records are maintained on line publicly, for all to see.
Number one priority of the Adjutant Generals office is to root out corruption in the government

JFlorio Loc: Seminole Florida

Love it. Term limits would stop a lot of crony capitalism.

Ve'hoe

good point,, I bet the head liberals, congressman, and senators don't lose a dime

Oldsailor65 Loc: Iowa

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Yes I agree with everything you have said. I would add one more thing.
The retirement of politicians should be under the same rules as military retirement.
After all they all have the same employer don't they?
I got out of the US Navy 50 years ago and then you had to have served 20 years to
qualify for a military pension and it would 50% of your pay at that time.
What is wrong with having the same retirement program for all Federal employees?

pafret Loc: Northeast

Nothingwrong with that. A federal law, which was a good one, compelled companies to vest their employees in whatever pension plan they used after five years. Twenty years used to be a standard in industry with no pension rights accruing until that magic number was reached. I have seen cases where employees reached 19 plus years and were laid off, just before qualifying for pension vesting

boatbob2

BUT,after retiring from OUR MILITARY,EVERY time active duty persons get a pay raise,WE DO TOO.......