The RTD recently ran a series of articles about the status of the state employee pension system in Virginia. I thought the attempts at reassurance were very humorous, right along with the justification for the high salaries.
Public employees: Your futures are being stolen by this crisis, just like everyone else’s. There is no future without a genuine recovery, and there is no recovery without a return to genuine free market principles. The Wall Street financial entities that brought on this crisis are even bigger now than they were four short years ago. No one in any position of real authority has been investigated or prosecuted. Real capitalism rests on truth, trust, and private property. The bubble-blowers promised rates of return on your retirement investments that were based on the bubbles going on forever. The bubble-blowers, having caused the bubble, saw the crash coming and cashed out, leaving you, along with the rest of us, holding the (empty) bag. As MFGlobal showed (more on that soon), we/ you ain’t seen nothing yet. It is becoming apparent that MFG clients’ money may have been literally stolen and used to pay off bad bets the firm had made. The money seems to have wound up in…big Wall Street banks. More for them, and none for you…
Bloomberg: U.S. State, Local Pensions Drop 8.5 Percent
U.S. public pension-fund assets fell in the third quarter by the most since 2008 as stocks sank amid concern that Europe’s debt crisis would curb economic growth, Census Bureau data showed.
Assets of the 100 largest public-worker plans decreased $237 billion, or 8.5 percent, from the prior quarter to $2.53 trillion by Sept. 30, the bureau said today in a report. It marks the first decline since the second quarter of 2010 and the biggest since the last three months of 2008, when holdings slid 13 percent during Wall Street’s credit crisis.
The setback may strain state and local governments that have set aside more money to cover retirement benefits. That’s pressured governments already coping with diminished tax collections and has propelled efforts to reduce benefit costs.
How long can we keep on borrowing 40% of federal spending just to keep the economy looking “healthy” and propping up tax receipts? What happens when reality strikes? What happens to your pensions when tax receipts plummet, and the stock market right along with it? What happens to the buying power of your retirement money when the Fed resumes printing in an effort to keep that plummet from happening?
What do we have to do to get the economy actually moving again? Why is it so hard to get Washington and the Federal Reserve out of the “managed economy” business, a business that has failed so utterly? We need actual growth; to have actual growth, we need an actual economy.