Yes, under-funded pension funds was part of the examination that
was getting a lot of publicity, but zero attention about a year ago.
Fortunately, Tennessee was 47th out of 50 states that were
essentially bankrupt, which is usually defined as not having sufficient assets
to cover its liabilities. But, all Californians are going to have to “pay
the piper” and that crisis is not too far down the road. Think you have
tax issues now; just wait until these contract obligations hit the books!
As industries and the rich flee your state, you will not be able to cover those
liabilities without huge hikes in taxes. I just hope that Tennessee isn’t
going to be expected to bail out California, because it is too big to
fail. The 1860 Civil War will seem like a mild skirmish in that
case. Most of the southern states are highly conservative and do not have
the same public-sector labor corruption.
But that is just the beginning. The government backed
student loan program was noted as approaching $ 1 Trillion in liabilities,
greater than the credit card debt. With the current feeble job market,
much of that is not going to get repaid.
About 2016 we are heading into a confluence of financial
disasters. The Medicare/Medicaid cost explosion at the Federal level,
baby-boomers expecting pensions at the State level and Social Security at the
Federal level, and the students defaulting on school debt. Then we have
the potential collapse of the Eurozone, which WILL have serious collateral
damage to our economy and ability to cover these financial obligations.
Half of Americans THINK they are already paying for too much and
the government has an infinitely large and bottomless piggy bank. They
are like Eleanor Cliff who said on Sunday’s McLaughlin Group, “What me worry.
We’ll figure something out when the time comes. We always have.”
She reflects the mentality of the political left. I’ve tried to deal with
these people. I think they live in OZ, where the wizard takes care of
everyone.
I am still hoping we can sell California (and Eleanor) to the
Chinese before we are forced to surrender it to them to cover unpaid loans. It
would be worth less in a surrender.
Australia or New Zealand are looking better every year.
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