Tuesday, July 18, 2017

Your Government Pension May Not Get Paid

If you don't talk about it...maybe everything will just work out OK...right?

We have heard that Detroit isn't paying it's public pensions....but that's just Detroit, right?

We know that Social Security will be insolvent a lot sooner than later....but the US Government promised it would always be there to pay us, right??

What if you found out that MANY public pensions were billions of dollars in the hole....and that the states that promised them are near bankruptcy themselves?  Who will be there to write the checks in 5-10-20 years?

Could the country’s pension mess be more widespread than we even realize?

Martin Armstrong of Armstrong Economics thinks so. He says, “under no circumstances assume that any government pension will actually be paid.”

And he means even government pensions in states now considered economically sound.

We’ve been following the budget debacle in Illinois. Even with a budget that includes a $5 billion tax increase, Moody’s may still downgrade the state’s credit rating to junk. The pension system in the Land of Lincoln is a big part of the problem. It currently has a shortfall of at least $130 billion.

Of course, Illinois isn’t alone. Government pension systems have drug a number of states into a fiscal black hole, pulling municipalities down with them. On Tuesday, S&P Global Ratings downgraded Hartford, Connecticut’s credit rating to junk. The city teeters on the brink of bankruptcy and the state can’t do a thing to help, as Forbes recently reported.

With state pension obligations already consuming half of their state budget, the state is beyond a weak position to bail out any municipality.”

In 2015, Connecticut Gov. Dan Malloy signed a budget that included $1.1 billion in tax hikes. More than $700 million of the new tax burden fell on businesses and the middle class.

It didn’t help.

Illinois and Connecticut aren’t the exception to the rule. Across the US, public pensions are woefully underfunded. Forbes put the situation in stark terms.

Between 2001 and 2015, state and local governments only contributed 88 percent of the required contributions. In total, according to the Pew Charitable Trusts, the state public pension plans are underfunded by $1.1 trillion. And, this shortfall does not even include the shortfalls associated with local pension funds. Worse, even these estimates likely understate the necessary contributions, so the actual funding shortfalls are possibly even greater.”

It’s easy to think the pension crisis is limited to just a handful of states. After all, a number of states remain on solid financial footing. But Armstrong asserts problems loom on the horizon even in states like Florida and Texas. He says the problem is nationwide and constitutes a sovereign debt crisis that is inevitable and irreversible. It’s a simple matter of demographics.

The way states have operated (internationally) is that they simply assumed that there was a never-ending bucket of taxpayers to squeeze for money. The problem is that the population growth has declined, the pensions systems have been a Ponzi schemes from day-one, and they are running out of other people’s money.”

This represents a major problem for millions of Americans counting on their pension for their retirement. But it’s even worse than that. As we’re already seeing Illinois, Connecticut and other states, the pension mess is dragging the entire state budget down the drain.

Here;  https://schiffgold.com/key-gold-news/dont-assume-government-pension-will-ever-paid/

"Today we have a fiscal party....for tomorrow we may all fiscally drown!"

History shows that many great civilizations have come and gone.  It would seem fairly obvious that the seeds of America's demise have already fully taken root...and are now full-grown trees.  We just have no idea when those trees will blow over.

So let's not put our hope in governments, or pensions or savings in the bank.  Our ONLY eternal hope is in Jesus Christ who promises to care for us for all of eternity.


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