The Public Pension Time Bomb
The public employee unions are threatening the entire state of California, and the only way out would be to place the State of California into a receivership commission. Supervisor Moorlach hopes that Governor Schwarzenegger will appoint a "Receivership Board" that will take the checkbook away from the state legislators who cannot balance the books. And he suggests the same should be done in the federal government. Moorlach predicts dire circumstances if something is not done, and suggests that elected officials are part of the problem when they accept campaign contributions from the public employee unions. An ongoing Full Disclosure Network(R) cable series that began in 2006 is covering the developing fiscal crisis and proposed solutions to deal with the unfunded public pensions and retirement benefits in the State of California. - State Receivership to Save California Public Pensions?, PRNewswire via COMTEX, July 26, 2010Having public pensions being so superior and far better than private retirement savings — and the inevitable backlash this would produce — is one of the unavoidable adjustments similar to falling house prices. This huge gap of public employees being so much better compensated than private employees became visible about a year ago even in just ordinary news reports in the papers, for those that read widely. Just like falling house prices, this will be adjusted, sometimes by drastic action (similar to a foreclosure being drastic). The bottom line is that taxpayers cannot be expected to make public employees far more comfortable than themselves. - Hal Horvath, Pension Envy, Pension Crisis, On Point Radio, July 28, 2010
84% of state and local employees retain defined benefit coverage, compared to 21% of private sector workers.
Only 9% of all private sector workers are now represented by a union, less than half the percentage of two decades ago. Meanwhile, the proportion of state and local workers with union representation has held steady over the same time, at about 43%... Government pensions are generally much richer than those offered by corporations. The average public sector employee now collects an annual pension benefit of 60% after 30 years on the job or 75% if he is one of the one-fifth or so of workers who are not eligible to collect Social Security benefits. Of the corporate employers that still offer traditional pensions, the average benefit is equal to 45% of salary after 30 years... Just as important, about 80% of government retirees receive pensions that are increased each year to keep pace with the cost of living, a feature which protects pensions against the effects of inflation and that can increase the value of a typical pension by hundreds of thousands of dollars over a person's retirement. But such inflation protection is nonexistent in corporate plans. - Bankrupt Public Pensions: A Time Bomb That Will Explode, AnchorRising.com, May 16, 2005
Misguided public sector incentives are particularly obvious when reviewing the status of public sector pensions across America, where public sector unions make outrageous demands and spineless politicians and bureaucrats cave into those demands, leaving working family and retiree taxpayers holding the bag. - Bankrupt Public Pensions: A Time Bomb That Will Explode, AnchorRising.com, May 16, 2005
A democracy is always temporary in nature; it simply cannot exist as a permanent form of government. A democracy will continue to exist up until the time that voters discover that they can vote themselves generous gifts from the public treasury. From that moment on, the majority always votes for the candidates who promise the most benefits from the public treasury, with the result that every democracy will finally collapse due to loose fiscal policy, which is always followed by a dictatorship. - Justice Litle, Is America’s Economic Recovery on the Whole Based on a Rotten Sham?, Daily Markets, April 20, 2010
Why America Faces a Big Fat Greek Bankruptcy
Public sector employee unions have no legitimate public purpose, but are instead in league with bureaucrats against the taxpayer.By AmericanElection.com
May 6, 2010
Why We’re All Greeks Now.
Forget Global Warming -- Catastrophic Government Spending Is the True Threat to Our Survival.
Have you read the news lately? Greece is bankrupt. The entire country was poised to default on its debt, when the European Union (led by Germany) and the IMF (led by the USA) decided to bail them out…or risk the collapse of the entire EU and their currency, the euro. As always happens any time government is involved, the dollar figure necessary to save Greece keeps rising…first it was $50 billion…then $100 billion…now $145 billion, the biggest loan to a country ever.
But here’s the clincher -- this gigantic loan will last only one year. The IMF (International Monetary Fund) assumes in one year, when Greece needs more money to stem the flow of red ink, they’ll be financially stable enough to attract loans on the open market, with no more government help. But what if the IMF is wrong? Then we’ll see one big fat Greek meltdown -- taking all $145 billion down the tubes (much of it from U.S. taxpayers). That’s assuming that Greece is telling the truth about their debt in the first place. But just like the U.S. government, Greece has lied to themselves and their citizens for years. And just like AIG, GM, Fannie Mae, Freddie Mac, and the failing public school system in America, the money we give Greece will never be enough. It’s a bottomless pit.
But Greece is the EU’s smallest problem. The other PIGS (Portugal, Italy, Ireland and Spain) are in far deeper trouble than Greece. Unfortunately the EU and IMF just used up most (if not all) of their bullets on Greece. There isn’t enough money in the world to bail out the rest of Europe. We are staring at economic Armageddon.
So what caused this? Very simply, big government and government employee unions. Greece’s problem is Europe’s problem…and following closely behind, America’s problem too. We’re all Greeks now. Quite simply, Greece’s problem starts and ends with government employee unions.
- There are too many government employees (1 in 3 Greek citizens works for government);
- Their salaries are way too high;
- Their bonuses can only be described as insane (2 months for each public employee);
- Their pensions are ridiculous (retirement far too young and free healthcare for life); and
- Their government jobs are guaranteed for life.
The solution to save America from economic Armageddon? Simple. Use the same “austerity measures” imposed upon Greece, in return for this $145 billion loan, to dramatically cut spending on government employees:
- Freeze government hiring for the next 3 years.
- Eliminate bonuses and raises for the foreseeable future.
- Institute layoffs and across the board wage cuts. Why should government employees enjoy “privileged status” that no employee in the private sector enjoys?
- Change pensions from ‘defined benefit’ to ‘defined contribution’ pension plans, meaning retirees receive only what has been built up in their 401K-type retirement accounts.
- Raise the retirement age. In Greece it is going from age 53 to 67. Gold-plated pension plans are the single biggest factor that bankrupted Greece. The same problem bankrupted U.S. automakers GM and Chrysler.
- Require government employees to pay more of their healthcare (through co-pays and deductibles).
- Change the way pensions are calculated by eliminating overtime and raises in the last years of employment to “game the system.”
To give you some perspective, the New York Post recently reported that one New York firefighter is retiring on a pension of $240,000 per year. If he lives 40 years beyond retirement, that will cost the taxpayers almost $10,000,000. That’s for one single government employee.There are millions upon millions of them on the federal, state and local level. Can you say “fiscal disaster?”
Government employees should be cheering these solutions. The plan above might actually save their jobs and pensions. But keeping the status quo of unsustainable spending will sink this country -- in which case government employees will lose their jobs and pensions. Anything that saves our economy, will be healthier for them (as well as the rest of us) in the long run.
It turns out that the Greek model is the American model. It turns out that we need saving too. We're all Greeks now. We either stop the insanity or we wind up with our own big fat Greek bankruptcy.
Act Now to Prevent the Pension Crisis from Bankrupting Our Cities and States
Dr. Kathleen Connell, The Huffington PostMay 19, 2010
As budget deadlines approach, state and local governments face tremendously difficult choices. They must choose between cutting education, public safety and welfare -- at a time of record unemployment -- or default on retirement obligations guaranteed to, and counted on, by their employees.
In California, Governor Arnold Schwarzenegger's decision to pay his state's hefty $6.2 billion pension fund contribution to CalPERS, the state's public employees' pension fund, comes at a severe cost. To finance the pensions, California will freeze funding for public schools, eliminate its welfare to work program, decrease money for local mental health clinics by 60 percent, and slash state employee pay by 5 percent.
It is the same dilemma faced by a growing number of states and scores of municipalities led by the mega cities of New York, Los Angeles and Chicago.
The pension tsunami slamming state and local governments across the country is a long-overdue bill borne from multiple causes, including:
- failure to fully fund past employer pension contributions;
- lower than projected investment returns;
- rapidly escalating benefits that now offer retirees 70 percent or higher income replacement; and
- poorly considered early retirement policies and lump sum retirement payments that are accelerating demands for distribution payments.
This year is only the beginning of the liquidity storm, as public pension funds brace for the acute concentrations of baby boomers set to retire in the immediate future. Public employees are nearing retirement far more rapidly than their private sector counterparts. According to Census Bureau data, approximately two out of every three state and local government employees (65 percent) are over 40 years old, compared to less than half of private sector employees (47 percent). Bold action must be taken now, before Gov. Schwarzenegger's difficult choice confronts every governor and mayor in the country.
Here are three steps that can be taken immediately to address the serious liquidity pressures faced by state and local governments.
Open Public Pension Funds to "Civilian" Employees
Taxpayers are angry at government workers. Many have seen their retirement plans shrink, while public employees are getting benefit increases (at taxpayers' expense) even amidst the worst recession since the Great Depression. Private sector employees should have access to the same opportunities and investment expertise available to public employees. Everyone should be able to invest their own money in public pension plans. While such "civilian" accounts would not have the guaranteed benefits of public employee funds, they would offer non-public employees multiple advantages including:
- access to a professionally managed, highly diversified investment pool;
- much reduced investment fees -- as low as .50 basis points, compared to the 1.5-2.0 percent standard market fees, that can increase a nest egg by 20 percent over 20 years; and
- financial literacy programs available through public funds without commercial overtones.
Establish Municipal Resources Facility
Just as General Motors, AIG and Citibank were deemed too important to the nation's economy to fail, it is critical that the federal government act to prevent municipal defaults or bankruptcies. Surely, continued operations of schools, police and fire protection, Medicare, and local roads and sewers are as vital as automobile production, insurance and banking. The feds should acknowledge that "Too Big to Fail'' applies to Main Street by setting up a federal mechanism to avert municipal defaults. Such support could be structured as a "crisis municipal resources facility," lending credit support to weakened municipalities, or be structured as supplemental stimulus funds to free up dollars to meet pension obligations. Any discussion of a municipal resources facility or other federal support would have to address the "moral hazard" issue by requiring applicants for federal support to reform their pension systems.
Supplement Defined-Benefit Programs With Shared-Risk Pensions
It is time to redefine shared-risks between employer and employee in creating retirement structures. The federal retirement system and several State and local pension funds offer a menu of retirement programs, including:
- a guaranteed defined benefit option, capped at lower income replacement levels;
- supplemental defined contribution/401 K plans;
- annuity options;
- matched savings; and
- robust financial literacy programs.
The traditional notion of a three-legged stool to fund retirement (Social Security, retirement or pension plan, and personal savings) needs to be revived. In an era where investment returns are likely to be permanently reduced, all workers will value the certainty of Social Security payments that will pay essential living costs. Their personal savings and pension benefits will, hopefully, earn additional dollars to upgrade their lifestyles.
Beyond these steps, any discussion of pension reform must also include a broad revision of pension oversight and governance. Reforms are needed to prevent the self-dealing conflicts that pervade many funds' investment decisions and to upgrade the financial expertise of those who serve in these important roles. The new Governmental Accounting Standards Board guidance on transparency of pension actuarial models, discount rates and investment risks should be welcomed.
The "new normal" for public pension funds dictates a course of action that incorporates bold new approaches to structuring retirement security for government employees. Those municipal governments who demonstrate such leadership will be better positioned to ride the wave of massive demographic boomer retirements, continued public sector downsizing, and volatile investment markets, and spare themselves the unacceptable choice between progress and pensions. Those who don't reform their pension systems face a crisis that will make the housing and Wall Street bubbles look miniscule by comparison.
Dr. Kathleen Connell was California State Controller from 1995-2002, serving as a Trustee of both CalPERS and CalSTRS, two of the nation's largest public pension funds. She is the founder and executive director of the University of California Retirement Security Institute.
Bankrupt Public Pensions: A Time Bomb That Will Explode
By AnchorRising.comMay 16, 2005
Two previous postings here and here discussed the perverse incentives that drive public sector behaviors. A more recent posting addressed further pension woes in the private sector. Marc has brought even more information forward about pension woes in his recent posting.
Misguided public sector incentives are particularly obvious when reviewing the status of public sector pensions across America, where public sector unions make outrageous demands and spineless politicians and bureaucrats cave into those demands, leaving working family and retiree taxpayers holding the bag.
On May 31, 2004, Fortune Magazine published an article entitled "The $366 Billion Outrage: All across America, state and city workers are retiring early with unthinkably rich pay packages. Guess who's paying for them? You are." Arguably one of the best write-ups I have seen on this issue, here are some of its major points:
- The public pension morass is bigger, more wide ranging, and ultimately more costly than anything you've seen in the corporate world.
- Public pensions are constitutionally guaranteed or protected in [41]...states.
- The result is a hole...that can only be filled...with either steep cuts in city services or [large] property tax increases or both.
What's happening...is just the beginning of a cascading problem. Pension plans covering the nation's 16 million state and local government employees -- about 12% of the entire workforce -- are gobbling up increasingly large shares of budgets, setting the stage for bitterly fought battles among politicians, unions and taxpayers. Collectively, the plans owe an incredible more in pension benefits to current and future retirees than the money stashed away to pay for them.
How on earth did it get to this point? You may have heard about the "perfect storm" -- a lethal combination of a crashing stock market and record-low interest rates -- that has hammered the pension plans (and share prices) of many of America's largest corporations. Those same factors also wrecked havoc on the finances of state and local pension plans.
But when it comes to the government plans, you can add a few more poisonous elements to the mix: elected officials who were more than happy to dole out lush benefits to their heavily unionized employees during -- and even after -- the stock market bubble; a system that lets politicians push the costs for those increased benefits off on future generations of taxpayers; and a general public that simply wasn't looking.
"The public employee, no matter who you compare him to, has become the dominant sector of the labor force that is well pensioned and well benefited," says Dallas Salisbury, president of the Employee Benefit Research Institute. "And the real question is, At what point, vis-a-vis tax burden, does the non-pensioned public start to pay attention to that as voters?"...Making the cash crunch even more severe is that in most cities and states, public pension costs are growing more rapidly than the tax base...
[Under defined-benefit pension plans,] the employer puts up all or most of the money...unlike defined contribution plans, such as 401(k)'s, the nest eggs accumulated under a defined-benefit plan can't be demolished by a cratering stock market...
There's another crucial difference between the public and private sector plans: A corporation, under federal law, typically must start pumping money into its pension plan once the value of the plan's assets sinks below 80% of its liabilities. But there is no such law governing state and local plans -- the decision to pump additional money into a pension plan lies with the individual discretion of state and local governments.
Thanks to this discretionary funding system, shortsighted politicians can simultaneously dole out rich pensions to their heavily unionized workforces (thereby presumably currying favor with a powerful group of voters and avoiding nasty strikes) and keep the rest of their constituents at bay by shoving the liability for those increased benefits onto future taxpayers...
There is another big trend at play here: the ever-widening divergence between the proportion of public and private sector workers who participate in a traditional pension plan. For private sector workers, the number has progressively slipped, from almost 40% at the beginning of 1980 to about 17% now...
The story is very different in the public sector, where traditional pension plans continued to flourish. Ninety percent of all state and local workers are currently covered by a defined-benefit plan, unchanged from a decade ago...
Only 9% of all private sector workers are now represented by a union, less than half the percentage of two decades ago. Meanwhile, the proportion of state and local workers with union representation has held steady over the same time, at about 43%...
...government pensions are generally much richer than those offered by corporations. The average public sector employee now collects an annual pension benefit of 60% after 30 years on the job or 75% if he is one of the one-fifth or so of workers who are not eligible to collect Social Security benefits. Of the corporate employers that still offer traditional pensions, the average benefit is equal to 45% of salary after 30 years...
Just as important, about 80% of government retirees receive pensions that are increased each year to keep pace with the cost of living, a feature which protects pensions against the effects of inflation and that can increase the value of a typical pension by hundreds of thousands of dollars over a person's retirement. But such inflation protection is nonexistent in corporate plans...
...then there are plans, like those in Houston and San Diego, that allow workers to draw both their salaries and pensions simultaneously...
Union officials say those greater benefits are part of a long-honored compact between governments and their workers.
"Historically people deferred wages and traded them for retirement benefits," says Ferlauto [a union official]. "That's been the public service quid pro quo."But whether they are actually trading off wages anymore is anything but certain...
The stock market did, of course, collapse, leaving public sector employee pension plans without nearly enough money to pay for promised benefit increases. Even more troubling is that many governments continued to sweeten pension plans long after the stock market bubble burst in 2000...
Thanks to the widespread constitutional and legal guarantees, politicans even attempting to reduce benefits can almost surely expect protracted court challenges...
So what's the answer to the pension morass? While changing benefits for existing employees is difficult, if not legally impossible, a handful of politicians have been attempting to at least reduce the amount of cash the plans siphon out of government budgets in the future...Governments will probably continue to offset rising pension costs by slashing services and, in the process, laying off workers...
Another alternative is for employees to contribute more to their pension plans. About 80% of all state and local plans require employees to make at least some contribution to their defined-benefit plan; the average payroll deduction is 5% of salary...But increasing that amount is a tough sell...Don't count on a booming stock market to come to the rescue...
It's looking as if the main responsibility for the public pension mess is going to rest squarely with taxpayers for the foreseeable future. [One union official] acknowledges that the situation might be creating some anger among workers in the private sector.
"As more people are concentrated in positions that have no pension system at all, they look at some of these things with resentment," he says. "Hopefully some day they'll all join unions, and they can negotiate better benefits for themselves."Oh, that's a really intelligent comment there at the end of the article. Such a stunning grasp of basic economics.
And you wonder why it has never crossed the minds of public sector union officials to ask one simple question working families and retirees answer every day: Where is the money going to come from to pay for all of these outrageous contractual demands by public sector unions?
Union Pension Funds, the States and Financial Ruin
By Devvy Kidd, NewsWithViews.comJuly 13, 2010
Back on December 15, 2008, I did a column titled, UAW President: Rob the People's bank! That brought a deluge of email from members of the UAW who emphatically stated I was a selfish b*tch, that I knew nothing about unions and without a union, workers in the auto industry would be exploited. My column was about the flat-out illegal bail out of the auto makers and how free trade has killed our most important job sectors. Yet, the victims of "free" trade continue to vote the same incumbents back into office who destroyed millions of jobs and who now refuse to get H.R. 4759 passed. Get the U.S. out of NAFTA and bring home millions of jobs. I wrote about this critical bill back on March 20, 2010. There are still only 30 sponsors; two Republicans. Neither the Republicans or the Democrats in the Outlaw Congress care about the American worker. Their votes have killed our economy; the so-called financial reform bill was nothing but more smoke and mirrors.
The Democrats have had control of Congress since January 2007. They have done nothing to bring home millions of jobs by getting the U.S. out of NAFTA, CAFTA, GATT, the WTO, stop the withholding taxing scheme, demand enforcement of our immigration laws and deporting as many illegal aliens as possible. Instead, Democrats in Congress champion illegals who have stolen MILLIONS of jobs that belong to Americans of both parties. Now, unions are going to spend a massive amount of money to return the same incumbents back to Congress to continue destroying this republic:
May 21, 2010. Unions to spend $100 million to save Dem majorities
Below is the mindset of the dummies coming out of the government indoctrination centers (public schools) that have inculcated the deadly communitarian doctrine (communist morality) into their heads that has led tens of millions of Americans to believe that federal government should be their caretaker throughout life. If you don't understand collectivism v individualism, it is terribly important you take the time to learn. You can listen from a master of knowledge on the issue, G. Edward Griffin. Interview from my radio show; click here for June 9, 2010 show.
"Individual wealth is evil. Collective wealth is the only virtue, social justice is the destination and Barack is the shepherd leading us down that path. We must remove the barriers to equality created by capitalism and embrace the righteousness of socialism." (Source, see comments section at bottom of article).
Slick career politicians like John Boehner [R-OH] can continue belching about jobs, but his votes killed millions of jobs. He is not a sponsor of H.R. 4759 to get US out of NAFTA. Boehner, like most Republicans and Democrats use political currency to bash the other party while Americans sink further into despair and poverty. If Democrats think it's all the fault of Bush and Republicans, they are fools. The same goes for Republicans who blame everything on Democrats. Both parties have brought this nation to financial ruin. There are hundreds of thousands of hard working Americans from both parties working feverishly to get the same buzzards reelected in November who have loaded the gun and pulled the trigger on our economy and our children and grand children's future. It is pure insanity.
Last year, a very knowledgeable man named Fred Starkey wrote two columns that really shook people up:
June 3, 2009. PERS: The Greatest Swindle in American History
June 19, 2009. Financial Rape: PERS of Oregon
After I read them, I brought Fred onto my radio show because pension shortfalls were just starting to get the long over due attention necessary to inform the American people of the dire condition of those funds. Millions of Americans depend on their retirement funds, and like so many other columns I write, this one is going to give you the raw truth. Knowing the facts can help you make important decisions for you and your family. Hopefully, it will also encourage voters in November to throw out incumbents in your state legislature who have created another financial disaster that is going to badly hurt millions of Americans in the states of the Union. There are many good state legislators, but the incompetent fools from both parties out number those legislators who do know the solutions, but can't get bills passed.
Congress has NO authority to steal the fruits of your labor, my sister's, your brother or mother to bail out state pension funds because your state representative and senator have entered into long term binding agreements with unions that were never realistic -- especially in the event the economy takes a down turn. If only "down turn" were the bottom line, but tragically, the American people haven't seen anything yet. Do not send me hate mail for being the messenger. Read the facts, understand the issue, and then decide how all this is/will affect you and your family. You can decide whether all these unions are good for your state. If you are a member of a union, whether UAW, SEIU or at the state level, perhaps there's something here for you to think about, too.
Too many Americans are paying little or zero attention to what's happened in Greece, Italy, Spain and other socialist countries. Many don't realize Greece has unions; and now that decades of bloated government spending (like the U.S.) and massive "entitlements" have driven Greece into financial ruin, there's no more money to pay the bills, just like here in American both at the federal and state levels. The rioting has been going on for months over there and if you think it's not possible here, think again.
Who pays the taxes for these union workers?
June 23, 2010. New York. Man Earns $300,000 Public Pension.
One of the critical problems facing the state and local governments are pension funds that are way under funded. Fox 5 News first reported on James Hunderfund in May. The retired superintendent of the Commack School System on Long Island earns a pension of about $316,000 a year. On top of that, Hunderfund is now the superintendent of the Malverne School District. Fox 5 obtained his contract, which shows he makes about $225,000 annually plus he gets 18 paid sick days and 23 paid vacation days a year. His wife is the superintendent of the Locust Valley Central School District on Long Island. Her contract shows she makes $250,000 a year. When she retires she'll get a pension. All of this is perfectly legal and paid for by taxpayers.
"Fred Gorman, the founder of a watchdog group called Long Islanders for Educational Reform, says the state employee pension system is bleeding taxpayers dry and that the state Legislature needs to step up and change the system. The web site seethroughny.net lists some state pension earners. It shows a retiree from the New York Public Library earning a pension of more than $188,000 year."
June 27, 2010. State pensions are inflated as workers boost salaries. (This is NY)
"Carmen A. Granto Jr. cashed in 45 unused vacation days and 747 accumulated sick days, boosting his salary over $200,000 in his two years before retiring.... Granto is getting a $147,109 annual state pension in retirement. He was making $129,000 a year when he retired in 2009. How did he do it? The same way others before him did it."
Underfunding of union pension funds isn't just a problem for those who receive that check every month. It will drastically continue to affect our economy for a long time to come -- especially local economies. How? By more rape at the federal level in taxes to illegally bail out any pension funds. While the habitual liar, Obama/Soetoro, says there will be no more bail outs, it is the Outlaw Congress who can push through another grotesque and illegal plunder of the people's treasury. If the Democrats believe they will lose control of the House in November, there is a good chance they will "lame duck" this type of illegal legislation on the way out.
May 24, 2010. The Next Bailout: $165B for Unions.
"A Democratic senator is introducing legislation for a bailout of troubled union pension funds. If passed, the bill could put another $165 billion in liabilities on the shoulders of American taxpayers. The bill, which would put the Pension Benefit Guarantee Corporation behind struggling pensions for union workers, is being introduced by Senator Bob Casey, (D-Pa.), who says it will save jobs and help people. As FOX Business Network's Gerri Willis reported Monday, these pensions are in bad shape; as of 2006, well before the market dropped and recession began, only 6% of these funds were doing well. Although right now taxpayers could possibly be on the hook for $165 billion, the liability could essentially be unlimited because these pensions have to be paid out until the workers die."We are talking massive numbers:
April 5, 2010. California Pensions Are $500 Billion Short, Stanford Study Says
April 9, 2010. States Skip Pension Payments, Delay Day of Reckoning
June 14, 2010. 61% Underfunded Illinois Teachers Pension Fund Goes For Broke, Becomes Next AIG-In-Waiting By Selling Billions In CDS
June 19, 2010. In Budget Crisis, States Take Aim at Pension Costs. "Many states are acknowledging this year that they have promised pensions they cannot afford and are cutting once-sacrosanct benefits to appease taxpayers and attack budget deficits."
As unemployment rises (it will get worse) and pensioners get less than their full check, states will continue to be unable to generate enough taxes to fund even basic services, much less these monstrous pension funds.
Are all state employees union?
Law and the Workplace On the Job
Unions in the Workplace
"If a union wins the election, must the workers join the union? No. Just as the National Labor Relations Act (NLRA) gives employees the right to join unions, it also gives employees the right to refuse to join a union. The NLRA prohibits both employers and unions from forcing employees to join a union.
"However, employees can be forced to pay for the work that the union performs on their behalf, even if they do not want to join the union. Most collective bargaining agreements contain a union security clause. In effect, this clause requires workers to pay the dues and fees that union members are required to pay. If a worker refuses to pay dues, he or she can be fired.
"Because the law requires the union to represent all the workers in the bargaining unit, regardless of whether they are members of the union, the law allows the union to "tax" the workers for the benefits they receive from union representation. Some states prohibit union security clauses."
Let me ask this question: Is belonging to a union good for your future? Do they are care about you -- state unions or private ones like the AFL-CIO, Teamsters?
Let's take one of the most corrupt, the SEIU. The Service Employees International Union spent $60 MILLION dollars to get a stinking communist, who is legally ineligible to run for president "elected" -- that would be Obama/Soetoro who was born with dual citizenship. In 2007, Congressman Ron Paul introduced the Tax Free Tip Act would would make tips for service workers exempt from federal or employment taxes. You would think the SEIU and Obama/Soetoro would have jumped on that bill: No more federal taxes on tips for waiters, waitresses and so forth. Oh, no, the SEIU did nothing to let their members know anything about it. So, don't tell me the SEIU cares about their workers. That union supported a Marxist who is hell bent on stealing every last penny from every American except those he's in bed with politically and financially. To be fair, the "caring" Republicans also ignored the bill.
How about the hundred million or so working folks who don't belong to a union and are dying under the weight of federal and state taxes? Do unions serve taxpayers?
Albany Police Officers Union President Chris Mesley recently chimed in regarding his position and the American taxpayer: "I'm not running a popularity contest here," Mesley said. "If I'm the bad guy to the average citizen . . . and their taxes have go up to cover my raise, I'm very sorry about that, but I have to look out for myself and my membership."
People want police protection, but should they be required to pay for it 10, 20, 30 years after a police officer has left public service? Does a policeman pay your retirement from J.C. Penny's after 25 years on the job for another 20 years? Shouldn't it be the responsibility of the individual to plan for their retirement and set up their own private retirement fund or should the public be forced to contribute just because the individual worked in "public service" whether it be police, state hospital worker or janitor at the state capitol?
April 28, 2010. Public Employee Unions Work Against The Public
"Many public sector union members get health benefits when they retire for free or nearly free for the rest of their lives. A friend's mother retired from a Northeast state DMV. She was a clerk. She has medical coverage for life with $2 co-pays! Her pension was just raised $4,000 a year. What clerk gets that in the private sector? It is also not uncommon for public pensions to be high 5 or low 6 figure amounts. Why should taxpayers pay for lavish health care plans and pensions that most do not get themselves?"
"Public unions across the country do not want to curb their pay, medical benefits or pensions, even though there is great pain and expense to the taxpayer and the economy. Public unions are not the entire reason states are in financial trouble, but cutting those benefits are certainly part of the solution. The good of the union cannot supercede the good of the public which pays them. Look for more protests and backlash from unions as they are asked to take cuts. Look for more outrage and push back from the public as they are asked to pay for the lush benefits. I predict public unions will either take some big cuts voluntarily or be forced to do so through bankruptcy. This money fight will not play well with hard working voters in the private sector this fall. Remember, the private sector is the only place where real wealth and prosperity is created. The public sector does not generate revenue; it only confiscates taxpayer money. Taxpayers need union employees to work for them, not against them."
Make no mistake about it: unions hold lawmakers hostage after they buy their favors with campaign donations. They are powerful, but now, well, the rooster is coming home to croak.
Of course, one must pay attention to the 'International' in SEIU. That union is just another communist front operation promising workers utopia, social justice and all the other communist claptrap while mother government drowns them in more and more taxes. If you think I'm just blowing smoke, you haven't studied communism as I have for more than a decade. But, don't listen to me, listen to William Z. Foster who wrote, Toward Soviet America. Foster was a useful fool, a Marxist labor organizer. He served as Secretary General of the Communist party USA (very active here in the USA) and promoted the destruction of free markets and capitalism -- the very systems that made America the greatest debt free nation every on this earth. You can read Toward Soviet America on line here. Learn how important unions are to the communists towards Sovietizing this republic.
In no way am I saying that every American who belongs to any union is a communist or has communist sympathies. What I am saying is that the goal of world communism is to replace our free enterprise system by drumming into people's heads -- especially union members -- that capitalism is evil. Tear down the classes! Raise up the toiling masses to their place of social and economic justice! Unionize workers so the working class can rise up for justice! Very dangerous propaganda and Foster gives it to you in plain language:"The final aim of the Communist International is to overthrow world capitalism and replace it by world Communism, "the basis for which has been laid by the whole course of historical development."On this the Program of the Communist International says:
An exceptional read on this is by Dr. Fred Schwarz: You Can Trust the Communists to be Communists. Dr. Schwarz goes into Techniques for Seizing Power, Revolt Through Labor Union Control, pgs 72-83. This short work (182 pgs) is free on line; click here."Communist society will abolish the class division of society, i.e., simultaneously with the anarchy in production, it will abolish all forces of exploitation and oppression of man by man. Society will no longer consist of antagonistic classes in conflict with each other, but will represent a united commonwealth of labor. For the first time in its history mankind will take its fate into its own hands....
"The future Communist society will be Stateless. With private property in industry and land abolished (but, of course, not in articles of personal use), with exploitation of the toilers ended, and with the capitalist class finally defeated and all classes liquidated, there will then be no further need for the State, which in its essence, is an organ of class repression.....
"The road to this social development can only be opened by revolution. This is because the question of power is involved. The capitalist class, like an insatiable blood-sucker, hangs to the body of the toiling masses and can be dislodged only by force. But when the workers have conquered power, how- ever, then the way is clear for an orderly development of society by a process of evolution. Naturally, even after capitalism has been overthrown and the power taken by the workers, society cannot simply leap to a complete Communist system. There are stages of development to be gone through. The first of these is the transition period from the overthrow of capitalism to the establishment of Socialism."
It's staring you right in the face America. Obama/Soetoro's "czars" are a collection of dedicated socialists to hard core Marxists.
Whether union or not, I highly encourage you to read this superb piece: Forgotten Facts of American Labor History by Tom Woods (May 5, 2010):
"The ways in which labor unionism impoverishes society are legion, from the distortions in the labor market described above to union work rules that discourage efficiency and innovation. The damage that unions have inflicted on the economy in recent American history is actually far greater than anyone might guess. In a study published jointly in late 2002 by the National Legal and Policy Center and the John M. Olin Institute for Employment Practice and Policy, economists Richard Vedder and Lowell Gallaway of Ohio University calculated that labor unions have cost the American economy a whopping $50 trillion over the past 50 years alone.
"That is not a misprint. "The dead-weight economic losses are not one-shot impacts on the economy," the study explains. "What our simulations reveal is the powerful effect of the compounding over more than half a century of what appears at first to be small annual effects." Not surprisingly, the study did find that unionized labor earned wages 15 percent higher than those of their nonunion counterparts, but it also found that wages in general suffered dramatically as a result of an economy that is 30 to 40 percent smaller than it would have been in the absence of labor unionism.
"Although labor unionism has actually made working people worse off, however, the usual argument for labor unionism and government legislation on behalf of labor is that in the absence of these things, employers will pay their workers unconscionably low wages."
A monstrous storm is building within the states because there is no money to meet all these obligations for public union pension obligations. Many pensions have taken a massive hit from the BP disaster in the Gulf:
How BP Screwed Over 42 State Retirement Funds, Including Alabama And Florida
"The California Public Employees' Retirement System lost $284.6 million in value as the largest oil spill in U.S. history erased more than $1.4 billion from BP PLC shares held by 42 state retirement accounts, data compiled by Bloomberg show. The declines come as public pension funds are struggling to recover from investment losses that averaged 21 percent last year, according to Wilshire Associates of Los Angeles."
In the meantime, the states of the Union are putting everything in jeopardy because, to date, not one of them have passed a sound money bill. Why is this so important? Back in January, I sent a letter to 1100 state reps and senators about a sound money bill. It is self explanatory; the actual letter is at the bottom of the column. However, it is imperative that every citizen, union or non union, of every state understand that almost 3/4ths of the states in this Union are headed towards either total financial collapse or severe financial ship wrecks that will cause a huge harm to her citizens.
Those who depend on monthly checks from union pensions had better take the time to understand the information below because the states simply cannot meet those obligations; and it will get worse for some time to come. In my humble opinion, some of what the states are doing with your retirement is dangerous for many reasons. The prime reason is the decline of the dollar, ignorance of our monetary system, what will happen when the FED can no longer print trillions in confetti and the commie Chinese refuse to bail out America's foolishness.
Here are but a few examples:
June 1, 2007. Banks Sell 'Toxic Waste' CDOs to Calpers, Texas Teachers Fund
Feb. 18, 2010. U.S. state pension funds have $1 trillion shortfall
March 11, 2010. Public Pension Funds Gamble With Risky Investments
March 11, 2010. Failed Banks May Get Pension-Fund Backing as FDIC Seeks Cash
Let me give you a few words from Dr. Edwin Vieira's testimony in March 2009 for the financial committee, Montana State Legislature; the bill did not make it out of committee. A tragedy:
I set up a special page to make this issue easy to understand. It contains Dr. Vieira's full speech as well as others. It has model statutes written by Edwin for both state governments and Congress. This isn't about Republicans v Democrats, right v left. This is an American issue that affects tens of millions of folks who depend on public pension annuities. The monetary issue affects every man, woman and child in this country. All states go back into session in January. Boots on the ground: Every adult in every state must stay after your state rep and senator to get a sound money bill passed -- something that should have been done five years ago or more. We are talking about the lifeblood of our nation and the ability for the states to survive. Here is the special web site."The provision of an alternative currency will promote social justice. It will begin to rectify the wrongs perpetrated against wage earners whose standards of living cannot keep up with the systematic inflation built into the Federal Reserve System; against the elderly and infirm who live on fixed incomes that steadily erode in purchasing power; against those anxiously approaching retirement while watching the real values of their pension funds evaporate; against the poor whose only wealth is the small amount of currency they acquire from week to week; and against all the recipients of essential public services that the State finds it difficult or even impossible to provide to the requisite degree because the real values of tax revenues cannot keep pace with costs. And,
"The provision of an alternative currency will fulfill the State's legal, moral, and political responsibility to protect the safety, health, and general welfare of her people against an economic calamity that no one doubts confronts this country at the present time.....
"But with this opportunity comes a extremely heavy responsibility as well. This matter is too important to be left to a single legislative committee's determination. More than any other issue in recent memory, the need to provide Montana with a economically sound and constitutional alternative currency vitally affects every resident of this State, and perhaps every resident of the United States as a whole—not simply immediately, but for many years to come. A mistake made here and now may prove incapable of correction later on."
Important links:
Pension Watch
States of Crisis for 46 Governments Facing Greek-Style Deficits
Petition - Right to Work Committee
Unions are the Biggest Threat to Farm Workers
FEC Fails to Investigate Teachers’ Complaint of NEA Union Money Laundering Scheme
Re-electing the Band Aid Brigade
My choice for president of these United States of America in 2010: Rep. Sam Rohrer of Pennsylvania.
Rohrer Votes Against Costly Public Pension Bill "Representative Sam Rohrer (R-Berks) today voted against a bill approved by the House that would increase the cost to taxpayers paying for retirement benefits for current state employees, teachers and legislators in the state's two pension systems."
You tube video of Barack Obama in Kenya supporting Raila Odinga, the election and violence afterwards. Odinga was the "agent of change" who "promised to redistribute the wealth of the country more evenly" Remember: Odinga, a Marxist socialist is Obama's cousin.
SEIU - Neanderthal thugs who appear to have taken lessons from Obama/Soetoro's cousin. Violence has a nasty way of escalating.
Dozens Storm D.C. Bank Branches
Huge Mob of SEIU Goons Attacks Banker's Home
SEIU Calls Senators Terrorists
UK public sector debt ‘around £2 trillion’
