Posted on 01/02/2015 11:11:55 AM PST by Libloather
This year, judges in California and Michigan approved the exit plans of two of the largest municipal bankruptcy filings in the country’s history. In California, Stockton upheld its obligations to the state’s pension system behemoth, Calpers, while paying its other creditors as little as pennies on the dollar. Detroit, meanwhile, was able to restructure its obligations to all of its creditors, including city pensioners. While the exit plans differed, both judges ruled similarly: public pension obligations could be shortchanged like any other debt.
Stockton and Detroit aren't alone. Cities and states across America are facing catastrophic budget shortfalls. After decades of promising municipal employees pensions and healthcare benefits, municipalities do not have the savings to pay them out. According to a Pew report released last year, some cities had only 50 percent of the funds needed to cover pension promises, and Charleston, West Virgina, had only 24 percent funding. Now, paying off these shortfalls—and serving the debts incurred—is taking up a growing portion of municipal budgets, at the expense of essential public services.
(Excerpt) Read more at newrepublic.com ...
Detroit and Stockton Are Just the Beginning of an Attack on Public Pensions
Finally running out of other peoples’ money. Took long enough.
These cities could pay these obligations. They have the money. The problem is that the money is being spent on the FSA as mandated by the state and Federal government.
Stockton and Vallejo will both be back in bankruptcy shortly because they both refused to give their PE pensions a haircut. The one thing that they did accomplish though, it make it impossible for them to borrow any money going forward. No investors are going to loan them a dime after what they did to their bondholders. So for now, the Cops and FF’s are still the head hogs at the trough, but infrastructure repairs are going to become increasingly problematic without the ability to borrow. Which is going to pi$$ off the construction unions who will be hurting from the loss of that work.
Government....making promises it can’t keep.
Public pensions are excessive. Too bad it takes bankruptcy to clean up. Future obligations like this should require public vote, not backroom, private deals with unions.
No, the “attack” is only on underfunded pensions and pensions that have been jacked-up to unsustainable levels.
Oh, Babylon!
Yeah, I remember the information around the Vallejo, CA bankruptcy and the revelations about the pensions. Shameful.
Let Detroit be a lesson to all: Municipal workers, instead of encouraging crooked mayors who rob your pension funds and steal from the taxpayers to live like a third world king, you need to be holding your administration accountable. That’s YOUR money they’re throwing around, not “da man’s” I had to laugh when the pensioners realized that dey was da man!
The Feds are planning to take everyone’s private retirement funds away and replace them with some sort of IOU.
Or any Ponzi scheme that relies on a constantly growing base of suckers to keep it funded.
Here in NJ a lot of cops and teachers were laid off due to budget cuts and property tax caps; those remaining live well as our upper middle class (especially since private-sector employers have fled). Firefighters were impacted, but most of the state doesn’t have paid departments anyway (and now probably never will). In the meantime, the pension plans are underfunded, all money is directed to public employees, and everything else deteriorates.
Any taxpayer (corporate or individual) can see the writing on the wall: They will be squeezed to pay for employees that retired years ago. As a result, nobody is starting any businesses here; companies used to flee NYC to come to NJ, now they just keep going.
“The problem with socialism is that you eventually run out of other people’s money.” ~~Margaret Thatcher
Yeah, and that’s when they will have made me an outlaw, because I will get my money back, even if I have to rob the Federal Reserve.
There, fixed it for you!
Regards,
I thought the “New Republic” died and went to journalism hell.
“an Attack on Public Pensions”
NOTICE THE WORDING...
It’s an “ATTACK!”, not an “Inability to pay”.
The cities made unsustainable promises to the employees, to buy largely DEMOCRAT votes, and now that it is time for the piper to be paid, there isn’t any money.
That’s an “ATTACK!” on pensions????
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