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Government pensions in jeopardy?

Discussion in 'Politics, Elections & Legislation' started by Brian in Oregon, Dec 27, 2010.

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  1. Brian in Oregon

    Brian in Oregon Well-Known Member

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    From Daily Forex News.

    "Prichard, a small town in Alabama has stopped sending monthly pension checks to its 150 retired workers after its pension fund ran out of money. The city is breaking a state law which requires it to fulfill its retirement obligations in full. The case is attracting the attention of bankruptcy lawyers, labor leaders, municipal credit analysts and local officials from across the country to see if the situation in Prichard creates a legal precedent on whether municipalities can legally cut or reduce their pensions."
     
  2. halfmile

    halfmile Well-Known Member

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    Nice Catch-22.

    Write a bad check (that's illegal) or don't (that's illegal too in this case).

    Any bets they take the stupid way out and go into debt? The world is watching.

    HM
     
  3. Brian in Oregon

    Brian in Oregon Well-Known Member

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    I agree. The courts will force the taxpayers to pay for this. Either by mandating more taxes, or slashing budgets so there is nothing left but retiree pensions. No police, fire, etc. In other words, holding the taxpayers hostage.
     
  4. Don Steele

    Don Steele Well-Known Member

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    The leaders of Prichard Ala were elected by the citizens.
    IF those leaders made unrealistic promises, such as guaranteed pensions without sufficient tax base or revenue to support them...it's the fault of THE PEOPLE who allowed it to happen. The fault lies with the people who failed to monitor the obligations their little town government was getting them into. The people who allowed their government to get them into this mess.
    Does this sound a little familiar to you...???
     
  5. School Teacher

    School Teacher Well-Known Member

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    A city is a corporate citizen of the state in which it is chartered.

    The State of Indiana is considering legislation that would allow cities to declare bankruptcy. If a city became bankrupt, an "emergency manager" would be empowered to completely overhaul a city’s financial obligations including renegotiating labor contracts.

    Could this be a sign of things to come?

    Ed Ward
     
  6. School Teacher

    School Teacher Well-Known Member

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    Eddiefromoverlook:

    Have you noticed that oil prices (and gasoline prices) are increasing dramatically?


    I wonder if this is driven by an increase in world demand, a tightening of supply or speculation?

    If gas hits $4 or $5 per gallon, where is the economic recovery?

    This will put a further strain on city budgets as commerce will slow down and tax receipts will drop.

    Ed Ward
     
  7. pdq

    pdq Member

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    My only hope is that events like this cause people to wake up and smell the coffee, as otherwise, things will continue out of control.

    Here in SE PA, each township has a planning commission. Without trying to sound radical, the truth is that local developers and builders hold tremendous influence over them. So, despite opposition from residents, bonds are issued to handle one thing or another, then development occurs, traffic gridlock increases, population increases so that capacity of schools becomes an issue, etc. It's a self fullfilling prophesy.

    And, all that new development? It's not done taking already developed land that's run down & re-cycling it, rather they take fresh open farmland / woodland & develop it. Luckily, a local conservation group has been working for the last 20 years and has put over 6,000 acres of local farmland into permanent conservancy -- I suspect that the developers and builders hate their efforts.

    You have to ask yourself -- when is enough enough? When is "Progress" bad as opposed to good? We as a country have a cultural belief that expanding and building new is a "good thing"; when do we step back and realize we've taken things too far? In the township I just moved from they finally stopped developing. Not because of a conscious decision based on 'doing the right thing", rather they stopped because there wasn't a single piece of undeveloped land in the entire township.

    The last piece that was undeveloped? They told us they were going to have the Township condemn it, buy it and leave it open ground, but to do so, it required a bond issue to raise money for the purchase, which people approved. Once they had the money, the story changed and they brought in a developer (imagine that) who then developed it into a sports complex, which it then required money to operate and maintain. THe only party that came out ahead on this deal (legally) was the developer -- all the residents of the Township got hosed.

    Pete
     
  8. Model Number 12

    Model Number 12 TS Member

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    I believe that we will be seeing more defaults like this in the future as local governments face the reality of expenses exceding receipts. Unlike the federal government, states and municipal governments do not have the ability to print money when they need more.
     
  9. shannon391

    shannon391 Active Member

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    Many cities and states are on the verge of bankruptcy, within a year or less.
     
  10. SirMissalott

    SirMissalott Active Member

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    To add something to your worry list I heard the other day the $$ amount of unfunded retirements owed to Govt. workers it is mind boggling. Our leaders had better grow a set and educate the dumb masses on the economics of budgets. And of course the government unions keep asking for more and threatening the politicians if they don't conform they will not be reelected. When did we quite being self- sufficient and start totally relying on other folks to take care of us???
     
  11. shannon391

    shannon391 Active Member

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    We need to learn to get by on much less so we can compete with Chinese child labor.
     
  12. over/under

    over/under Member

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    My household has been getting by on much less the last 3 years. When will the government?
     
  13. shot410ga

    shot410ga Well-Known Member

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    Prichard has mostly become a low income, welfare town, with very few businesses paying taxes. As well as, mostly low income rental and almost 100% white flight. The people collecting the pensions are generally the white flight group. And guess what, the Black city government can't/won't pay the white flight retired workers or in some cases the regular city workers. Prichard has no money and has claimed bankruptcy in the past. But managed to pay the pensioner's. Now they want to disfranchise the city charter an go back to the county. But, the county doesn't want them, their workers, or the cost of the pensioners. Nether does the state of Alabama. I guess we'll see the outcome, and it won't be pretty....It may set a precedent in the courts.
     
  14. willing

    willing Member

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    All Gov pensions will be one of the next crisis. Has anyone seen any reductions anywhere?

    Bill
     
  15. AEST BOSS

    AEST BOSS Member

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    Sorry for all those who rely on getting something for nothing. Those days are over. Just look at what they did to the GM legacy costs. Slash & Burn. Sign of what is coming for all pensions.

    We are broke. Time to get real about spending $$$ that doesn't exist.

    Happy New Year!
     
  16. TD1958

    TD1958 Member

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    Oh Wait, Can't Obamy bail them out just like the banks and auto workers who have contributed dearly to money problem of this country? LOL Tim
     
  17. daddiooo

    daddiooo TS Supporters TS Supporters

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    Buy can goods and ammo! It's gonna' get fugly. (I won't explain that last word)
     
  18. otnot

    otnot Active Member

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    Every time the Federal Reserve prints more money people on a fixed income and minimum wage earners are going to loose due to the inflation that it causes. The Fed keeps telling us that inflation isn't high enough but they don't take into account commodities such as food and fuel. Our food costs in the last year have risen 40% due to the devalued dollar. Yet the Fed continues to print more money. How high can they raise taxes and cut spending to cover a 14 trillion dollar deficit? The taxes collected today will not even pay the intrest on our dept! The only thing keep up with inflation is gold silver and oil.
     
  19. RobertT

    RobertT Well-Known Member

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    Pension funds should have been fully funded on a yearly basis from their inception. The problems have arisen from Municipal, State and Corporate greed. A company I worked for raked off 23 million dollars from its pension fund in just one year when the stock dividends from pension investments exceeded the amount necessary to maintain funding. The same thing has happened across the board from Social Security on down. Had pension investments been left alone they would have been self sustaining.

    Never fear, Congress prepared years ago to protect pensions at the expense of the taxpayer, we will all pay. Ever hear of the PBGC? http://pbgc.gov/

    Robert
     
  20. Bisi

    Bisi TS Member

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    Wait till CA goes belly up. Then you will have people who are 55,60,65 years old living in other states who are still working and making 40K a year paying the pensions of retired mid 40 year old CA workers raking in 60K plus a year in pensions.

    Isn't it going to be fun!
     
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