Insight into How We Are Turning into Greece

In order to turn a town, city, state, or nation into Greece, you just need obscure terminology and plausible deniability. The New York Time’s Dealbook blog has a great recent post: “Bad Math and a Coming Public Pension Crisis.” The thing to remember when you read the post is that someone could have reported this five years ago or ten years ago. It could have been an above-the-fold headline instead of a blog post. It could have been a series of stories. But no one at the Times wants Read more […]

Moody’s Stops Rating Government Pensions on the Basis of Their own Claims about the Value of Their Investments

Government pensions suddenly don’t look like they are funded securely now that Moody’s stops lying. ZeroHedge reports, “Cities, States Shun Moody’s For Blowing the Whistle On Pension Liabilities.” It quotes the Wall Street Journal: Other cities and counties from California to Florida are reconsidering their relationship with Moody’s as it expands its stricter ratings approach around the U.S., threatening a seal of approval that for decades was all but a necessity in the municipal-bond Read more […]

Downgraded Chicago: The City Is Officially Junk

Moody’s has officially downgraded Chicago bonds to the status of junk bonds. Regular readers might remember that back at the end of February I wrote about how Moody’s downgraded Chicago’s bonds to two steps above junk. Nothing has really changed since then except that Chicago’s insane, corrupt finances are appearing more and more for what they are: beyond hope of recovery. I was amazed when I wrote that earlier post that an establishment source like Reuters would acknowledge Chicago’s Read more […]

Congress Uses Budget Crunch to Hurt Pensions

A law to hurt pensions was slipped into the huge spending bill. Crammed within the “we have to pass it, so you can find out what’s in it” over-a-trillion-dollars spending plan currently moving through Congress with no one but the lobbyists reading it is a section allowing pension plans to cut benefits to current and future retirees. Here’s the beginning of the analysis from the Daily Bell blog: “So It Begins: Congress to Cut Pension Plans.” “Congressional leaders hammer out deal Read more […]

Tennessee Is the Un-Illinois State

Terrible picture, but a great “State of the State” update from Tennessee Secretary of State, Tre Hargett, yesterday in Nashville. Here’s a man who has cut his office’s budget from over $30-million per year in 2009, to $27-million today—AND, they’re returning over $2.2-million to the treasury, effectively cutting about 17% of spending since he took over, while we all know the price of everything has been going up. [See also, “Half of Residents Say They Wish They Could Move Out of Illinois.”] The Read more […]

State Retirement Funds Are Scams to Rip Off Struggling Workers

Why is Detroit bankrupt? Why is San Bernardino following in Detroit’s footsteps? Why is Illinois descending into financial crisis? In these cases, and in many other states, the answer is their pensions. They are supposed to pay up to retirees but they never properly managed the money. They have no way of paying what they owe now or in the near future except by direct taxation on current residents. Note that all of this is somehow legal. No one ever goes to jail for it. People pay into Read more […]

San Jose’s Leech Class: A Picture Of The Nation

Some day Americans (or whatever the people living on this part of the continent are called at that point) are going to understand that the standard of living and the prosperity Americans attributed to the free market in the Post-War era of the second half of the twentieth century was mostly the results of massive debts. It is almost like a science fiction movie. Our leaders figured out a way to take the wealth of the future and bring it to their present to spend. And now that the future is getting Read more […]

Warren Buffet Is As Much A “Tapeworm” As The Pensions He Finally Talks About

Warren Buffett’s political views and “solutions” are largely fascist—he loves it when bought-and-paid-for politicians come to the rescue of rich business guys like him when they make huge mistakes—and part of his “investment smarts” is knowing what officeholders will do, immoral or not (and betting on the sinful hearts of men is often a winning wager!). From Bloomberg.com: “Buffett Says Pension Tapeworm Means Decade of Bad News.” Public pension plans threaten the financial health of U.S. Read more […]

Reuters Reports On Some American Regime Change: Long Live The Revolution

I can’t believe that Reuters is so truthful about what happened. I think this is my favorite headline ever: Voters in bankrupt San Bernardino sweep old guard from power Residents of bankrupt San Bernardino, California on Tuesday voted to complete a rout of the city’s pro-union old guard, electing business-friendly pragmatists who have pledged to try to reduce pension costs and take on vested interests. As San Bernardino enters into a fourth month of mediation with its creditors, the biggest Read more […]

Are Cities The Next Federal Bailout? Why All Public Debt Is Immoral

Megan McArdle asks, “Should We Bail Out Cities.” I am not posting about this to commend her answer (though she is right). I’m posting about it because she felt the need to address the issue. It’s going to happen. In the latest City Journal, Steve Malanga writes about an issue that hasn’t yet gotten a lot of attention but is virtually guaranteed to become a serious topic of national debate in the not-so-distant future: Do we bail out cities that have become insolvent? Let that sink Read more […]