But the government cannot sue itself. I’ve posted many times about this, here it is again more succinctly:
State pension funds are underfunded by over $3 trillion; this is more than six times the $438 billion in underfunding the plans themselves report. Pension shortfalls far exceed explicit state debts.
Current state pension accounting practices are inaccurate and outmoded. Private pension plans would not be allowed to use such methods.
Of course, no one will ever be sued by the SEC, prosecuted by the DOJ, or McCarthied by a Congressional committee for this. Or for the equivalent Federal fraud in making untenable promises for future Social Security and Medicare entitlements.Because this fraud is perpetrated by people who were Elected, it is sanctioned by Divine Right. Anyway, it cannot possibly be fraud, because government is “us.”
If a private company in NY was doing this AG Cuomo would be on it like stink on a monkey. 😉
One of the great ironies is that state pension plans are defined-benefit plans, and therefore employees have little to care about immediately when the economy tanks and the stock market (or the price of any equity, including real estate goes south. But many state-sponsored pension funds have taken a huge hit in their assorted investments, which over the years have been in, dare I say, sophisticated investments, including credit default swaps, not to mention collaterized debt obligations that own too many slivers of shopping malls. The idea was you didn’t have to go to the taxpayers to fund all your promises, assuming you were riding the gravy train of free market capitalism.
When it came to stoking the boiler of that engine, though, few of them would have much interest, even though they may have noticed that the train was losing some steam. Thank goodness they did not have their money in a 401-K, or ever had to think about saving a bit before buying that Chevrolet Silverado to tow the boat.
Now Calpers is strapped, as are the pension funds of many states and municipalities, and some are realizing that Nancy Pelosi’s theories about economics are downright nuts. Unemployed people, thinking of when their meager compensation will run out, which they know it will, are horrified when the administration says 9% unemployment may persist for several years. They fear the government is lying, and that it may be much more severe.
Would it not be a good idea to stoke the boiler of that train, instead of continually devising ways to making breaks in the tracks in between stations?