Higgenbotham wrote:> I can still remember the ads from when I was a kid that said,
> "Merrill Lynch is bullish on America." It seems like a lot of
> people equate buying stocks to being patriotic.
> Democrats are blaming these budget woes on the lousy economy. The
> real culprit for the budget imbalance is skyrocketing
> public-employee pension costs.
> Officially, Illinois is a state with an $80 billion unfunded
> pension system. Yet a study by Joshua Rauh, an associate professor
> of finance at Northwestern University's Kellogg School of
> Management, puts the funding shortfall at closer to $150 billion.
> The state still assumes that it is going to get a fat 8% rate of
> return on its pension investments. But over the past decade the
> returns were half that, which is why many actuaries believe that
> this return is pure fantasy. The pension payouts are gigantically
> lucrative, with many workers getting 80% of their final four-year
> pay. That includes a cost-of-living adjustment and can also
> include stacked-up overtime. The retirement age is 55 for many
> public employees.
> One study by the Illinois Policy Institute examined pension
> records and found that today there are 536 retirees collecting an
> annual pension of $100,000 or more. Some collect more than
> $200,000. The taxpayer tab for those 536 pensions alone is $68.2
> million a year. It costs the state about $4 billion annually to
> make the necessary pension contributions—and the system is still
> underfunded. Those annual pension costs are expected to rise to
> about $6 billion a year in the next few years.
> http://online.wsj.com/article/SB1000142 ... 94412.html
Higgenbotham wrote: Going back to one of the other posts, I said I can understand why
the herd followed the Hunt Brothers or Greenspan. That was before
the Fourth Turning Crisis Era when unadulterated greed would be
expected. But now that we are supposedly in a crisis era, why has
the herd not turned against this and put it to a stop? If I
understand correctly, it is because the current generations are
particularly greedy relative to previous crisis era generations
and the government is in more trouble (deeper in debt); hence,
that combination of things makes this situation less apt to be
immediately faced in this crisis era.
Higgenbotham wrote:> GenX should see these past events like the bankruptcy of Lehman or
> the BP oil spill as crisis events, but due to their extreme greed,
> they do not see it that way at all.
rolivier79 wrote:> Regarding the fear of municipal defaults, I'd like to point out
> that municipal bonds rarely ever get issued without bond insurance
> these days.
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