“Without massive realignment of government spending (including pensions), individuals will hold other currency or barter.”
Well, I don’t think we’re going to sink to a Germany 1923 type of situation. And at any rate, federal pensions are such a tiny part of the federal budget that I don’t see the federal government altering the COLA formula for current retirees. For future retirees, possibly including many current employees — maybe.
“Well, I don’t think we’re going to sink to a Germany 1923 type of situation. And at any rate, federal pensions are such a tiny part of the federal budget that I don’t see the federal government altering the COLA formula for current retirees. For future retirees, possibly including many current employees — maybe.”
We are headed for dire economic times if substantial changes to government spending are not made. Contrary to your uninformed assertion that pensions are not a substantial unfunded liabilty, a USA Today article indicates that the unfunded liability of federal civilian and military pensions is $5.3 trillion in today’s dollars. This liability grows at $300 billion per year. A substantial increase in inflation will balloon the unfunded liabilities much higher with the COLA.
http://www.usatoday.com/money/economy/2009-05-28-debt_N.htm#uslPageReturn
Your optimism is based on wishful thinking. Government spending including federal pensions will be substantially reduced directly or indirectly. The levels of current government spending and future spending are unimaginable. The world will not sit by idly as our printing presses generate trillions of new dollars.