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Detroit Retirees Asked to Pay for Decades of Democrat Government
Townhall.com ^ | July 8, 2014 | Michael Schaus

Posted on 07/08/2014 5:05:54 PM PDT by Kaslin

Retired city workers in the Liberal Utopia of Detroit are being asked whether or not they want the city to exit bankruptcy, by slashing retirement pensions and cost of living adjustments. Officials are urging retirees to agree to a 4.5 percent cut in pension payouts, and an end to COLA. Unsurprisingly, some former city workers are less than thrilled by the idea of taking a pay-cut in an attempt to lessen the city’s debt obligation.

Now, I understand the retirement pension of an average city worker is not amazingly lush in the city of Detroit; but (and this is a purely economic observation) such poor choices are primarily the consequence of being the major creditors in a poorly-managed municipality… In other words: This is what happens when you depend on liberal government for your livelihood. Heck, if Detroit was a financial institution we would see Occupy Wall Street protestors demanding the forfeiture of every policeman’s pension within the 142.9 square miles of Detroit’s geographical footprint.

But, I guess things are a bit different when we’re talking about publicly elected snake-oil salesmen running a major metropolitan area into the ground. After all, Detroit politicians have been employing the same big-government spending campaigns as Chicago, LA, and New York for decades… Why on earth would we expect creditors of such a spending spree to suffer the consequences of deficit finance, right?

The truth is, this isn’t a matter of public employees taking a cut to their pensions. Nor is it a matter of Democrat promises being broken. This is merely the result of dependency on government. Reliance on any big spending city budget tends to be anchored (whether liberals want you to believe it or not) in fiscal reality. At the end of the day, the promises made by government are only as solid as the financial reality backing said promises.

Just like Solyndra, government contractors, or a Social Security beneficiary depending on the continued funding of a bankrupt “pay-as-you-go” system, Detroit retirees are at the mercy of the deficit they voted into existence. It might not be “fair”, but it is the fiscal reality of the real world. After all, pensions based in private companies go bankrupt all the time… And such a result is generally chalked up to the consequence of mismanagement and executive incompetence.

Well… Welcome to Detroit.

Now, there will be a number of personal tragedies that unravel in this mess. But, it would be good to remember what, precisely, is responsible for the destruction of so many retiree accounts: Big Government, decades of Democrat politicians, and government over spending. In other words: Those big-mean liberals used Detroit tax dollars (present and future) as a slush fund to implement their form of statism. Well… Kinda like splurging at a Vegas night club, the bill eventually comes due. But, in this case, whoever is left at the end of the night will suddenly find themselves responsible for a half century of Democrat expenses.

Yeah… Most of these retirees simply put in their time for the city, and don’t (necessarily) share responsibility for driving the general fund into an accountant’s debt ridden nightmare. Now, just imagine how much better off workers would have been had they been given the freedom to invest their money as they had wished… I mean, heck, with a bankrupt government, and a dying city, it would be hard to imagine doing worse in the free market. (Of course, I guess they could have invested in Solyndra, or Abound Solar.)

Unfortunately, the bottom line for would-be beneficiaries of Detroit pensions, is that the city doesn’t have the money. And, really, isn’t the idea of modern-day liberalism focused on “spreading the pain” around? Well, congratulations Detroit: You’re finally seeing the cost of Big Government in actual dollar amounts. I know: It’s far more fun spending the money, than paying the bill… Welcome to the real world of finance. But, don’t forget what John Maynard Keynes pointed out when advocating for increased government spending: “In the long run, we’re all dead.”

Of course, he never said we’d be able to afford the coffin.


TOPICS: Business/Economy; Culture/Society; Editorial; Government
KEYWORDS: bankruptcy; demonrats; detroit; govspending; pensionreform
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1 posted on 07/08/2014 5:05:55 PM PDT by Kaslin
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To: Kaslin

The retirees were promised too much in many cases.


2 posted on 07/08/2014 5:07:12 PM PDT by GeronL (Vote for Conservatives not for Republicans)
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To: GeronL

Low-information workers.


3 posted on 07/08/2014 5:07:45 PM PDT by Steely Tom (How do you feel about robbing Peter's robot?)
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Detroit public employees got rich of Detroit government mismanagement seems only fair.


4 posted on 07/08/2014 5:08:03 PM PDT by Reaganez
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To: Kaslin

Are they figuring in the effects of the Death Panels in the fiduciary calculations?

If not, the long term scenario is probably better than predicted. Every year sliced off the lifespan is a big plus for a pension plan.


5 posted on 07/08/2014 5:09:18 PM PDT by nascarnation (Toxic Baraq Syndrome: hopefully infecting a Dem candidate near you)
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To: GeronL

I’ll bet their pensions are pretty good no matter what this article states....any govt retiree with a defined pension has a huge gift on the backs of taxpayers and they must know that.....so no sympathy from me....


6 posted on 07/08/2014 5:09:43 PM PDT by cherry
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To: GeronL
The retirees were promised too much in many cases.

"Promised too much" hardly describes it.

Its more like the unions manipulated and blackmailed the politicians, while sticking it to the taxpayer to receive benefits that could never have been paid.

7 posted on 07/08/2014 5:10:38 PM PDT by ClaytonP
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To: Kaslin

While I think the individual retirees are the least guilty of the guilty parties, its still going to cost them something.

Union members nationwide should be asking themselves if the deal they’re getting is too good to be true.


8 posted on 07/08/2014 5:11:00 PM PDT by cripplecreek (Remember the River Raisin.)
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To: Kaslin

If they won’t help their city, they are not good citizens.

Besides, who in TF retires after 20-25years of work, at 80-90% of their highest wage earned in a year or the top three highest years?


9 posted on 07/08/2014 5:12:56 PM PDT by Vendome (Don't take life so seriously-you won't live through it anyway-Enjoy Yourself ala Louis Prima)
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To: Kaslin

well they voted for it, now they can pay for it


10 posted on 07/08/2014 5:13:08 PM PDT by yldstrk ( My heroes have always been cowboys)
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To: GeronL

“If you like your retirement, you can keep your retirement. Period.”


11 posted on 07/08/2014 5:14:04 PM PDT by newfreep
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To: ClaytonP
Its more like the unions manipulated and blackmailed the politicians, while sticking it to the taxpayer to receive benefits that could never have been paid.

Those politicians were willing participants. They knew it was unsustainable but as long as the union leadership kept delivering the votes they were just fine with it.

If it were up to me I'd strip city council members and union leadership of personal property, auction it off and pay down some of the debt.
12 posted on 07/08/2014 5:14:27 PM PDT by cripplecreek (Remember the River Raisin.)
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To: GeronL

Exactly. This is such a horrible situation. The Dems promised government workers rich, unaffordable pensions to buy their votes. The workers should have known better and saved more. But now that the Ponzi Scheme has fallen apart, these workers old and not in a position to work to earn the money they should have been saving. So they are screwed. Sure, its their own fault, but I don’t want to see them starving. It makes me so angry at the Democrats that they created this horrible situation to buy votes. They disgust me.


13 posted on 07/08/2014 5:17:12 PM PDT by Opinionated Blowhard ("When the people find they can vote themselves money, that will herald the end of the republic.")
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To: newfreep

Everything Obama says should have an asterisk after it.


14 posted on 07/08/2014 5:17:40 PM PDT by GeronL (Vote for Conservatives not for Republicans)
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To: Kaslin
Give it a few years, this will spread everywhere. The only debt that a city should be able to incur is voter approved bonds. Any retirement, benefits, etc that is part of a person's salary should be entirely paid during the budget year. It is incredible how little ‘discretionary spending’ cities are presented with each budget year - so much of it is tied to previous budgets or non-elected human resource managers and unions.

It must end. Such debts are illegal under almost every state law. Budgets are not being voted on by currently elected councils but by benefits offerings of the past.

15 posted on 07/08/2014 5:18:16 PM PDT by kingu (Everything starts with slashing the size and scope of the federal government.)
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To: Kaslin

Harry Reid would refer to such sacrifices as “Patriotic.”


16 posted on 07/08/2014 5:18:42 PM PDT by Huskrrrr
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To: Kaslin

They could make it more enticing for these workers to accept these pension changes by sweetening the deal: Give each retiree a free Detroit home! They could have the option of buying it for their full market value of $1 or $2... but, because they are understanding ex-municipal employees... Homes for FREE!


17 posted on 07/08/2014 5:19:13 PM PDT by C210N (When people fear government there is tyranny; when government fears people there is liberty)
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To: Kaslin

Thank you Michael Schaus for not putting ‘tic’ on the end of the word Democrat in your title.

The government of Detroit and been anything but democratic for years and years.

I have real mixed feelings about hurting the retirees to ‘save’ the city. Looks to me like no amount of money can ‘save’ Detroit.


18 posted on 07/08/2014 5:19:36 PM PDT by upchuck (Everyday, Joe Wilson becomes more correct!)
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To: Kaslin

There is a lot of pressure for them to settle. It is bankruptcy. So if they don’t agree the judge can and will impose a settlement which may be less.

A 4.5 percent cut doesn’t sound too bad considering how they were over-promised in the first place.


19 posted on 07/08/2014 5:19:46 PM PDT by The Free Engineer
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To: GeronL

That’s true (employees promised too much), and bankruptcy is actually healthy. Detroit is finally getting a much needed wake up call that OPM (other people’s money) eventually runs out. Our nation is headed for a similar wake up call. We’ll all be millionaires of course, but what good is that when a million won’t buy dinner? Even the Ryan budget plan didn’t purport to balance the budget—much less spend down the debt—for something like a decade. Our leaders don’t know how to extricate our nation from Detroit-style overspending, and the end result will probably be worse.


20 posted on 07/08/2014 5:22:15 PM PDT by CitizenUSA (Proverbs 14:34 Righteousness exalts a nation, but sin is a disgrace to any people.)
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To: Kaslin

A large majority of those ‘poor pensioners’ were also liberal public employee union members and partisan liberal democrats. They made the mess, both by the ways they did(n’t) their jobs and by the way they ran Detroit’s politics for at least the last 50 years. Nail the hypocritical whiners! Send a message to their ilk all around the country that consequences are possible.


21 posted on 07/08/2014 5:22:21 PM PDT by JohnBovenmyer (Obama been Liberal. Hope Change!)
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To: ClaytonP
Its more like the unions manipulated and blackmailed the politicians, while sticking it to the taxpayer to receive benefits that could never have been paid.

Manipulation and blackmail aren't necessary. Unions turn out the vote for rats, rats reciprocate by approving hefty pay and benefit increases. Rinse, repeat, every two years. You scratch my back, I'll scratch yours.

22 posted on 07/08/2014 5:22:24 PM PDT by kitchen (Even the walls have ears.)
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To: ClaytonP

“...the unions manipulated and blackmailed the politicians...”

I’d call it collusion. We are talking about Democrats here. The unions colluded with Democrat politicians to carve out generous benefits in return for votes. It worked very well for both groups...until OPM ran out.


23 posted on 07/08/2014 5:24:38 PM PDT by CitizenUSA (Proverbs 14:34 Righteousness exalts a nation, but sin is a disgrace to any people.)
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To: Kaslin

The city of Detroit and the American auto manufacturers: Numbers one and two on the Hit Parade of Liberal spending failures.


24 posted on 07/08/2014 5:25:29 PM PDT by upchuck (Everyday, Joe Wilson becomes more correct!)
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To: CitizenUSA
Our leaders don’t know how to extricate our nation from Detroit-style overspending,

I don't see evidence they want to.

The "Ryan budget" itself was a gimmick. It would have no control over what future Congresses spent.

25 posted on 07/08/2014 5:26:44 PM PDT by GeronL (Vote for Conservatives not for Republicans)
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To: Kaslin

Why don’t the retirees sue the Democrat Party? The Democrat politicians lived high on the hog and left the retirees holding an empty bag. The Democrat Party has lots of money. Heck, Obama is going to a dinner in Texas where all the Democrats there are paying $32,000 for the meal. How many retirees could be paid with that kind of money?
We shouldn’t even call the retired city employees of Detroit “retirees”. If they aren’t smart enough to go after the Democrat Party, then they should be called “suckers”.


26 posted on 07/08/2014 5:28:39 PM PDT by blueunicorn6 ("A crack shot and a good dancer")
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To: cripplecreek

“Those politicians were willing participants.”

You beat me to it, but I see we agree. The unions weren’t manipulating the politicians so much as working together to plunder taxpayers. The education establishment is very much the same. They basically sell their votes to those politicians who can best deliver the goods. It has nothing to do with delivering better service to the community (as government workers) or educating the children. It’s all about payola.


27 posted on 07/08/2014 5:29:12 PM PDT by CitizenUSA (Proverbs 14:34 Righteousness exalts a nation, but sin is a disgrace to any people.)
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To: yldstrk
they voted for it, now they can pay for it

What you said.

28 posted on 07/08/2014 5:35:08 PM PDT by T Ruth (Islam shall be defeated.)
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To: CitizenUSA

I’ve got lots of reasons to dislike Rick Snyder but I am really glad that he finally forced this to a head and brought it all out in the open. I just wish someone had done it 30 years ago.


29 posted on 07/08/2014 5:35:46 PM PDT by cripplecreek (Remember the River Raisin.)
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To: GeronL

Most people have defined contribution plans like a 401(K). Gov’t workers usually have a defined benefit plan, where they are guaranteed a certain amount of monthly benefits no matter how much was contributed, how the investments performed, or how long they live.


30 posted on 07/08/2014 5:36:59 PM PDT by Rusty0604
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To: Kaslin
As I've always said, these are city employees. They voted for their city leadership, they let their city leadership screw them, but the problem for them is they didn't realize it was they who were getting screwed.

I say "tough toenails!". I certainly didn't vote for your mayors and city councilmen who were in charge of your pension funds. I certainly shouldn't have to pay your squandered pension now.

31 posted on 07/08/2014 5:37:40 PM PDT by FrdmLvr ("WE ARE ALL OSAMA, 0BAMA!" al-Qaeda terrorists who breached the American compound in Benghazi)
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To: Kaslin

Politicians and public sector unions sit at the table and trade favors using taxpayers’ money. Politicians get re-elected, unions get feather beds, and the taxpayers are stuck with the check after politicians and the unions have sated themselves.

Public sector unions should be against the law.


32 posted on 07/08/2014 5:42:33 PM PDT by randita
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To: Kaslin

The biggest problem I have with this is it treats the retired manager sucking up $200,000 a year the same as a retired janitor getting $17,000 a year.

The cut should be 10% off anything over $35,000 a year, with a $100,000 hard cap. COLA’s should be kept until reaching the $35,000 level. I would bet that would save more money and would better represent what pensions are supposed to do, give retirees a respectable, moderate level of income.


33 posted on 07/08/2014 5:44:54 PM PDT by Go_Raiders (Freedom doesn't give you the right to take from others, no matter how innocent your program sounds.)
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To: Kaslin

At some point the hog trough becomes empty and all the piggies squeal they are still hungry.


34 posted on 07/08/2014 5:49:49 PM PDT by RetiredTexasVet (Surgeon General Warning: Operation of Government Motors vehicles may be hazardous to your health)
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To: Rusty0604

defined benefit plans are stupid, especially when the “worker” hardly contributes anything.


35 posted on 07/08/2014 5:50:30 PM PDT by GeronL (Vote for Conservatives not for Republicans)
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To: randita

“Politicians and public sector unions sit at the table and trade favors using taxpayers’ money. Politicians get re-elected, unions get feather beds, and the taxpayers are stuck with the check after politicians and the unions have sated themselves.

Public sector unions should be against the law.”

Too true; what happened in Detroit is happening statewide here in NJ. A cop I know retired at 46 (had 25 years on the job), and now we’ll pay a nice pension to him for probably another 30 years. The taxpayers are screwed, and fleeing these costs.


36 posted on 07/08/2014 5:50:42 PM PDT by kearnyirish2 (Affirmative action is economic warfare against white males (and therefore white families).)
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To: Kaslin

37 posted on 07/08/2014 5:52:19 PM PDT by gura (If Allah is so great, why does he need fat sexually confused fanboys to do his dirty work? -iowahawk)
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To: Kaslin

4.5 percent cut

HAHAHAHAHA


38 posted on 07/08/2014 5:54:54 PM PDT by sasquatch
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To: yldstrk

“well they voted for it, now they can pay for it”

Exactly. They are getting what they voted for.


39 posted on 07/08/2014 6:01:08 PM PDT by Parley Baer
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To: CitizenUSA

The main reason they don’t know is because none of them are educated and smart enough to handle finances.


40 posted on 07/08/2014 6:06:34 PM PDT by CorporateStepsister (I am NOT going to force a man to make my dreams come true)
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To: Kaslin

Successful parasites are those that have learned to not take so much from the host that the host dies or sickens to the extent that nourishment for the parasites is constrained.

Many government parasites have ignored this reality and have overloaded the host with too many parasites and taken too much nourishment from the host. Consequently the host dies or sickens to such an extent that nourishment to the parasites is limited.

Such is the case with Detroit today. And that “sick host” condition will be coming to a city and/or state near you soon. And, eventually, to the federal government and its employees and contractors also.


41 posted on 07/08/2014 6:07:37 PM PDT by House Atreides (ANOTHER CONSERVATIVE REPUBLICAN FOR CHILDERS 2014 .... Don't reward bad GOPe behavior.)
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To: House Atreides

bump


42 posted on 07/08/2014 6:10:52 PM PDT by GeronL (Vote for Conservatives not for Republicans)
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To: Kaslin

Detroit was run by communists, specifically Mayor Coleman Young (id. CPUSA for decades), and CPUSA supporters (City Councilwomen and then Chairwomen), Maryanne Mahaffey and Erma Henderson.

Both women later joined the marxist Democratis Socialists of America when the CP started its decline in the 80’s.

Other Detroit City Council members also had significant ties to the CPUSA and the DSA.

In 1975, Sen. Carl Levin (d-Mich), then head of the city council, gave the key to the city to a KGB-controlled “World Peace Council” delegation headed by Indian Communist Party leader Romesh Chandra. Photos available in the WPC’s booklet on this event and possibly in Trevor Loudon’s 2013 book, “The Enemies Within: Communists, Marxists and Socialists in the US Congress”, www.pacificfreedomfoundation.org.

The UAW was, for decades, run by the CPUSA and then by the Reuther Brothers who were associated with the Socialist Party and/or the Democratic Socialists. Walter Reuther was identified as a member of the CPUSA in internal reports to the FBI in the 1930’s. He later broke with them in the late 40’s and fought them for control of the UAW.

Rep. John Conyers Jr (D-Mich) was a member of a CPUSA Local, 600 as was he father, who later when with the Reuther faction.

Just a little history to give the main story some context.


43 posted on 07/08/2014 6:20:27 PM PDT by MadMax, the Grinning Reaper
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To: Kaslin
I don't think it's fair to take-away from lower-level employees for the mess made by management of the city. Rather than hit every retiree with a 4.5 percent cut and loss of COLA, they should put a cap on the pension that retirees receive and take away anything above that level.

Far too many cops and firemen earning in excess of $100,000 a year in pension checks, way beyond what is necessary to support yourself in retirement. There are lots of classifications getting $100,000 to $500,000 pensions - that's what should be cut. A lot of pensioners are living off pensions first received decades ago that are tiny compared to what is doled out now - leave them alone, it's hard living on $15,000 to $20,000 a year. Go after the big earners who sometimes receive more in retirement than what their standard salary was.

44 posted on 07/08/2014 6:23:50 PM PDT by roadcat
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To: Steely Tom

They destroy rights when they have cop badge priviledges, and when they retire and have no priviledge, they whine they do not have rights and are kicked like old whores to the curb.

why do i not feel sorry.It is what they signed up for and promoted their entire careers in crime.


45 posted on 07/08/2014 6:38:57 PM PDT by lavaroise (A well regulated gun being necessary to the state, the rights of the militia shall not be infringed)
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To: Vendome

Teachers? At least by me they take their 3 highest years...


46 posted on 07/08/2014 6:41:18 PM PDT by Patriotic1 (Dic mihi solum facta, domina - Just the facts, ma'am)
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To: blueunicorn6

Quite a Very Good idea!


47 posted on 07/08/2014 7:17:36 PM PDT by Nuc 1.1 (Nuc 1 Liberals aren't Patriots. Remember 1789!)
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To: CorporateStepsister

Well, you’re right of course. Politicians are nearly all LAWYERS, not accountants. Why anyone would trust a lawyer to run anything is beyond me. They’re a necessary evil sometimes if one needs legal advice, but as far as running a business, I’d sooner trust someone picked at random off the streets.


48 posted on 07/08/2014 7:19:46 PM PDT by CitizenUSA (Proverbs 14:34 Righteousness exalts a nation, but sin is a disgrace to any people.)
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To: Kaslin

Every time I hear stories like this I remember Margaret Thatcher’s words of wisdom about socialists running out of other people’s money.


49 posted on 07/08/2014 7:32:56 PM PDT by Sasparilla
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To: Kaslin

95.5% of a pension is better than no pension at all.


50 posted on 07/08/2014 7:34:01 PM PDT by dangerdoc ((this space for rent))
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