That one lady on TV keeps mentioning Municipal bankruptcies... in time...

You are correct of course. And my pension contribution goes up to 6.7% of my salary this year. So essentially I will be paying for other people to enjoy the pension I will never see. Terrific.

I keep telling my wife (used to teach) to take the penalty and get her money now while she can. Because the way it's going now, the idiocy that these people are getting for being civil servants, will bleed the country dry in a few years. If that.
Stupid ****s.

Quote:

So essentially I will be paying for other people to enjoy the pension I will never see.

I love it when people think things don't apply to them, only to find that they do.

The funny part is they support the very system that is leading us all over the edge. Because they think it will work out ok for them. Its just willful blindness. Or self deluding. They know its not going to work out but will not admit it to themselves. When the day comes that the truth is forced upon them they will be the ones to start the fires and burn down the wrong things.

The pie is getting cut up into fewer and fewer pieces. Not to worry the government has their back. Ha ha ha! Maybe if they had done the jobs they were paid to do things might be different.

Its public service or a business. Pick only one.

The only thing holding it together is Fed monetization. They will have to stop at some point and the uproar will be one for all time. You get millions hooked on free loot and then cut it off and you deserve what you get. **** the FOMC.

"But the pensions were promised to us! It's a contractually binding agreement!"

Thats the whining I hear from public sector friends, I then mention Central Falls Rhode Island...

Eventually, it's going to come down to two choices:

1. You're wealthy enough to pay the vig to live in the community of your choice.

2. Otherwise, only the stupid will be stuck in a community getting gang*****d daily by the .gov tax ticks. The tax ticks WILL also resort to other local revenue-enhancement measures to peel the peasant tax-onions.

I wish there was an alternative to the public roads. Another thing: you'd better start looking into ways to generate your own electricity, and cut way back on your electricity use (unless you're wealthy enough to pay the vig to use all the electricity you want). As the recent Supreme Court decision showed, the stupids are totally in charge, and they're going to ride this nuke all the way into the ground, ala Dr. Strangelove.

Last week, I talked with a guy who's just about to retire from the West Virginia coal industry. He felt that electricity prices are going to double (from where they are now!!!) by 2015, because the assministration is determined to strangle the coal power baby in its crib.

Man, was he*****ed! I thanked him for his many years of service delivering power to us peasants.

Randy - Agree that at 30something you absolutely are getting robbed and will never see a pension. If I was in your position I would organize/rally support from teachers around your own age and go to your union reps and DEMAND a 401K option.

That said - the bigger suckers are the NJ property owners who are truly the ones getting their pockets picked clean since they are the ones who pay all operational and entitlement costs of the public pork.

The true colors of your senior colleagues will be on full display as they continue to throw your demographic under the bus ... in order to maintain their "lifestyle".

Newcub, how popular do you think I am already that I tell people I work with that they will get exactly 0 from their pension? I keep to myself. Nobody wants to hear the truth and the people with many more years in then I have believe somehow it won't be them who gets nothing.

Oh, it's certainly possible the pensions will still be paid one or more decades from now, but with highly devalued funds. The real crux will be whether the gray panthers will be able to wield sufficient political power to keep any purchasing power for their retirement checks.
If one recalls, this was a big deal last time we had a large inflationary jump (mid-70s).
Now, if you believe inflation will not occur, all bets are off.
I think it will, and must - otherwise total reset for the planet - game over.

Hey Randy,

You might as well lump in your medicare contribution (and your employers match)as well. Remember your going to pay for someones else almost free healthcare, with money your going to need later in your life for healthcare. Pretty ****ing ironic.

Hmmm, maybe opting for the 403(b) option 20 years ago was not a mistake after all...

Like Karl said, a lot of people in this country, not just government employees DEMAND that 2+2=5. Both parties currently promise that and, the vast majority believe that one of the two can make it happen.

This makes me think of something I've seen many times. The difference between money and wealth is that you can print money, you have to go out, work, and create wealth.

Flap

The second chapter of this book by Frank Chodorov might explain plenty. The bone thrown didn't have any meat on it.

http://library.mises.org/books/Frank%20C....

Mish had those numbers up, I think in 09. They weren't his, but something he read. My mother was talking to a guy who was bringing up this stuff this morning. Some of us have been studying this model since it came to the front in 2002 or 2003. The San Francisco Fed wrote a document about the private pension plans, how the funding worked, etc in June 2003. Figuring there was a long bear market coming, there was no way the numbers would work. I believe 8% then was the conservative number, the estimates being based on 9% or more.

For those that recall, the SPX was around 950 then. Including reinvested dividends, it would have to be 1900 to reflect an 8% return. But, if you know how the SPX is figured, you realize the index is up as much as it is by shrinking the number, the divisor. The great secret is the buybacks, better known as partial liquidations, reduce the divisor, thus creating a higher number out of the same capitalization. Zeros like BS, LEH, FNM, FRE, GM and so on have to be replaced by new money. For the bulk of the 10 year (October08-June09 being the exception), the SPX has paid a less than 3% dividend, a figure that through examination of 130 years of data and comparing the yield to inflation itself, is totally insufficient. Dividends do not shrink the divisor and thus by paying small dividends and using funds to buyback stock, they have artificially raised the number. (the SPX is weighted by the number of shares times price and buybacks reduce the number of shares. Additional investment is accomodated by raising the divisor, while buybacks or partial liquidations are recognized by reducing the same divisor, thus allowing a lower cap value to be reflected as no change).

Examine the recent rally in stocks, based on the idea the banks in Spain are now fixed. What is the true nature of the rally? In my book, it is the fact the banks and state now allow a select group to extract more gain out of the system. The problem is the solution to the problem for longer than a week or so is for the remainder of us to gain possession of this gain to consume goods and pay our debts. Another stock bubble allows for the pretend these pension debts don't exist. See, if they can get interest rates up, the liability is lessened, because on an immediate basis, higher interest creates a higher annuity stream. And, at the same time, get the risk assets up, which provides more money to fund the immediate. Private rules allow for a pension to be funded by only 80% and I believe the restoration, should the fund fall below 80% is to 90%. Excess can be recognized as profit, which I suspect is where much of the excess of the 90's went, out of funds, to the bottom line and out the door in the pockets of management through stock plans. This bubble also allowed the various governments of the US to paint a picture they were stable financially.

I'm going to write a post on my blog soon titled "Dollars Don't have Babies". The continuation of all of this is predicated on dollars having babies. Bernanke is trying his best to dispel this idea, but all he can do is dilute what is happening and destroy the models. The debt that supports all these imaginary dollars still ticks. In a poker game, once the pile of chips accumulates largely into one stack, the game begins to stagnate and wind down. The difference between the poker game and this world is the guy at the game usually gets paid. The compound equation differs, in the sense that the poker game was started at par and remained at par, while the banking game contains additions that don't exist. Even if they throw in more chips, they are merely markers for what was never created.

Pay Taxes To A State Or Local Government? Be afraid, very afraid

Btw for those of you with moody's access, I suggest reading the report for the good details, and why the headline number is hiding uglier details behind it.

But... But.... BUT - that's our money!!!

We're ENTITLED to it!


Heheheh.

Flappingeagle wrote..

Hmmm, maybe opting for the 403(b) option 20 years ago was not a mistake after all...

Any retirement plan is a sitting duck. Better make sure you have enough investment choices in your 403b to ride through the coming tsunami. My 403b did't have enough choices until I moved it to an IRA. The metaphor is:

1. Deflation as bonds are either defaulted on or restructured.
2. Inflation when the reserves held with the Fed are finally reinvested.

I liken it to a tsunami: the water recedes, then comes back as a wall of water sweeping everything in its path.

Finally, we all bear the risk of confiscation, a la Argentina.

Iowa Governor is asking (yes asking) state workers to pay 20% of their salary towards their health insurance...so far 2 have signed up...Gov. Branstad, Lt. Gov Reynolds

Symbolic I know...brought the unions out from under their rocks..defending 100% free insurance for all state workers...annual cost...$500,000,000..there are only 3 million people in the state...if I did my math right...every single person in this state is contributing $167 a year!

Unions say it's not fair..they gave up pay increases in order to keep 100% free insurance...even with all those pay increases they "gave up", state workers still earn 46% more than their private counterparts...

Iowa’s Privileged Class: State Government Employees
http://www.limitedgovernment.org/publica....

~~~~~~~~~~~~

Local, worthless, printed paper..."your 2 cents" section where readers write in...some idiot responding to the high state worker salaries and 100% free health insurance:

"Don't you realize that state workers spend their salaries; and most likely on things that keep you employed! Cut our salary, we cut our spending, you are out of work!"

Priceless.

Quote:

Unions say it's not fair..they gave up pay increases in order to keep 100% free insurance

They bet on ponzi. They won't admit it.

They should have demanded the same pay as their private counterparts, but 100% paid to them every week in cash, not ponzi'ed away in a defined benefit/health pension.

Well, here's a new wrinkle -- Clawback by those state pension funds.

http://finance.yahoo.com/news/surprise--....

My favorite quote from the article was:

“I gave up a very good job in exchange for this permanent benefit, and at no time was there a little asterisk” indicating that the benefit could change, he says.

Somehow, I suspect that the clawbacks are going to start getting even more severe in the very near future.
Hmm, wait a second. Didn't pensioners in Greece have their payouts just reduced?
Well, even if someone survives the clawback; somehow I don't think they'll survive the math -- empty coffers pay no bills.

Not to worry, the Fed will be there to pick up any slack. That's what a reserve currency is there for, right?