It Begins: Pension Bailout Bill To Be Introduced This Week

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Zero Hedge: Over the past year we have provided extensive coverage of what will likely be the biggest, most politically charged, and most significant financial crisis facing the aging U.S. population: a multi-trillion pension storm, which was recently dubbed “one of the most heated battles of a lifetime” by John Mauldin.

The reason, in a nutshell, why the US public pension problem has stumped so many professionals is simple: for lack of a better word, it is an unsustainable Ponzi scheme, in which satisfying accrued pension and retirement obligations requires not only a constant inflow of new money, but also fixed income returns, typically in the 6%+ range, which are virtually unfeasible in a world where global debt/GDP is in the 300%+ range.

Which is why we, and many others, have long speculated that it is only a matter of time before the matter receives political attention, and ultimately, a taxpayer bailout. more …

Opinion: We have over a dozen posts warning about the next government crisis. It wasn’t enough that progressive presidents from Carter to Clinton to Bush nearly bankrupted the entire planet by pressuring banks and mortgage companies to approve loans for people that had no way to pay them off.

Now we are faced with pension obligations to municipal employees (police, fire etc.) that were pegged to unrealistic returns by the same progressive bureaucrats.

Yesterday’s Democrat win in the Virginia Governors race saw Republican municipal employees voting for the Democrat over this very issue. The Dem’s want a bailout and the Repub’s do not.

Will too big to fail be resurrected? Will the US tax payer be called on to pay outrageous retirement packages? Will US government debt climb even higher?

Keep that dial set to this station for the next government debacle.

2 COMMENTS

  1. Mark 3:25 (ESV) “And if a house is divided against itself, that house will not be able to stand.”

    Stop and think for a minute about the innumerable ways our society is tearing itself apart: real and perceived bigotry, economic disparities, real and perceived sexism, fights over redefining gender, politics, multiculturalism, nationalism vs. globalism, infighting in churches, ect. Now we have something that will completely fracture the middle-class.

    The pension system time-bomb is an interesting one since it has the potential to be a particularly divisive element within the middle-class. People who worked their whole lives under the promise of being given a guaranteed income (pension) at retirement will not ever agree to reduce their monthly payments. And those in the private sector who do not enjoy such guarantees at retirement are finally learning they are subsidizing these benefits. It’s similar to how Northern Italy is subsidizing the southern region. When this mess finally hits the fan, the fighting will be unbearable.

    The only thing holding us together is the Holy Spirit (2 Thessalonians 2:6). The hour is late and our churches need to speak about this from the pulpit. And I wonder, is yours?

    Matthew 16:2-3 (ESV)

    2 He answered them, “When it is evening, you say, ‘It will be fair weather, for the sky is red.’ 3 And in the morning, ‘It will be stormy today, for the sky is red and threatening.’ You know how to interpret the appearance of the sky, but you cannot interpret the signs of the times.