That is captalisim, not socialisim.
Comrade B
-----Original Message-----
From: Ron Ristad <ristad@xxxxxxxxxxx>
To: undisclosed-recipients:;
Sent: Mon, May 11, 2015 11:17 am
Subject: [sparkscoffee] Illinois Pension Ruling Sets Stage for Riots
Seems like riots are set to erupt just about everywhere.
-RR
By Rick Ackerman
What can a state government do if it owes its retired workers vastly more in
pension benefits than it will ever be able to repay? The answer, as far as the
Illinois Supreme Court is concerned, is that the state will simply have to
squeeze blood from a stone when the inevitable fiscal crisis hits. And it
surely will, since the gap between tax revenues and pension obligations is
conservatively estimated at $111 billion. Illinois doesn’t have that kind of
money lying around, and probably never will. So what then? My expectation is
that the court’s decision last week invalidating cost savings implemented in
2013 will eventually lead to rioting in the streets and a civil war that pits
taxpayers against public-employee unions.
Unions Won’t Budge
From a political standpoint, the irresistible force and the immovable object
have been placed on a collision course. The public-employee unions won’t budge,
especially now that the state’s highest court is on their side, rejecting even
modest budgetary measures that might have averted bankruptcy. The justices
wouldn’t even countenance scaling back a COLA that has been compounding at 3%
since 1989. For its part, at some point in the not-too-distant future, Illinois
will be able claim, with blunt honesty, that the money simply isn’t there. The
predictable “compromise” will be a court order effectively requiring Illinois
to raise taxes until there is enough money to support the retirees more or less
forever. Well before then, however, taxpayers will begin to flee Illinois with
the urgency of North African refugees fleeing ISIS. Even now, one out of every
four dollars that Illinois workers pay in taxes goes toward pension benefits
for the state’s retirees.
Can you see where this is heading? Trouble is, there are probably at least two
dozen other states whose pension assumptions are nearly as shaky as those of
Illinois. Indeed, when the Great Pension Bust that is surely coming starts to
unfold in California, New Jersey and New York, it will make the fiscal problems
of Illinois look like a hill of beans. To put things in perspective, consider
the budget woes of Flint, Michigan. To remedy a recurring annual deficit of
about $20 million (and growing), the city has slashed services and amenities
almost to nothing. Even so, the long-term structural budget problem – chiefly
the shortfall between revenues and pension obligations – reportedly exceeds
$500 million.
