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Detroit’s City Pensioners Finally Figure It Out After 40 Years: No Pensions.

"Fiscal conservatives have said for years that this was inevitable. We were dismissed as crackpots. The red ink could flow forever, we were told. 'No problem!' They say the same thing today about the federal government. The suckers line up for jobs with the federal government, with its fat pensions and unfunded liabilities. The result will be the same: default. Cities can do what individuals do: run up large bills, and then declare bankruptcy. The voters will shrug off 20,000 pensioners who lived in a fantasy world all their lives. They are no longer politically viable. They are merely a tiny voting bloc that has no money to give to campaigns." Continue reading →

Continue ReadingDetroit’s City Pensioners Finally Figure It Out After 40 Years: No Pensions.

Ingham County judge rules Detroit bankruptcy be withdrawn

"Ruling the governor and Detroit’s emergency manager violated the state constitution, an Ingham County Circuit judge ordered Friday that Detroit’s federal bankruptcy filing be withdrawn. 'It’s absolutely needed,' said Judge Rosemary Aquilina, observing she hopes Gov. Rick Snyder 'reads certain sections of the (Michigan) constitution and reconsiders his actions.' Prior to her ruling, the judge criticized the Snyder administration and Schuette’s office over their hasty move. 'It’s cheating, sir, and it’s cheating good people who work,' the judge said. 'It’s also not honoring the (U.S.) president, who took (Detroit’s auto companies) out of bankruptcy.'" Continue reading →

Continue ReadingIngham County judge rules Detroit bankruptcy be withdrawn

Ingham County judge rules Detroit bankruptcy be withdrawn

"Ruling the governor and Detroit’s emergency manager violated the state constitution, an Ingham County Circuit judge ordered Friday that Detroit’s federal bankruptcy filing be withdrawn. 'It’s absolutely needed,' said Judge Rosemary Aquilina, observing she hopes Gov. Rick Snyder 'reads certain sections of the (Michigan) constitution and reconsiders his actions.' Prior to her ruling, the judge criticized the Snyder administration and Schuette’s office over their hasty move. 'It’s cheating, sir, and it’s cheating good people who work,' the judge said. 'It’s also not honoring the (U.S.) president, who took (Detroit’s auto companies) out of bankruptcy.'" Continue reading →

Continue ReadingIngham County judge rules Detroit bankruptcy be withdrawn

Public Sector Pensions Are a National Issue

"Paul Krugman and Dean Baker took the Washington Post editorial page to task yesterday for stating that unfunded state and local pension liabilities amounted to $3.8 trillion. They accuse the page of misquoting a study in which the total was cited as only $1 trillion. Currently, standard practice measures the funding status of public pensions in the US under the laughable assumption that every dollar in the pension funds will earn compound returns of 7.75% or 8% per year. That’s the basis for the $1 trillion in unfunded liabilities. If unfunded liabilities are $1.0 trillion under an 8% rate, then they are $3.4 trillion unfunded under a 4% rate." Continue reading →

Continue ReadingPublic Sector Pensions Are a National Issue

Public Sector Pensions Are a National Issue

"Paul Krugman and Dean Baker took the Washington Post editorial page to task yesterday for stating that unfunded state and local pension liabilities amounted to $3.8 trillion. They accuse the page of misquoting a study in which the total was cited as only $1 trillion. Currently, standard practice measures the funding status of public pensions in the US under the laughable assumption that every dollar in the pension funds will earn compound returns of 7.75% or 8% per year. That’s the basis for the $1 trillion in unfunded liabilities. If unfunded liabilities are $1.0 trillion under an 8% rate, then they are $3.4 trillion unfunded under a 4% rate." Continue reading →

Continue ReadingPublic Sector Pensions Are a National Issue

Europe Continues to Circle the Drain

"Where is the austerity? The cuts Keynesians are complaining about are mere reductions in increase. 'Despite austerity rhetoric,' wrote Frank Karsten, 'government debts keep rising in most democratic countries. ‘Austerity’ is a code word for ‘spending less than we had wanted, but more than in the past.’ In the end, they wind up raising taxes, rather than lowering expenditures to cut deficits.' As we reported last week, central banks around the world continue to cut their euro holdings for the third straight year. The Old World’s scrip now accounts for only 23.3% of foreign reserve holdings. If central banks are wary of euros… you should be as well." Continue reading →

Continue ReadingEurope Continues to Circle the Drain

Europe Continues to Circle the Drain

"Where is the austerity? The cuts Keynesians are complaining about are mere reductions in increase. 'Despite austerity rhetoric,' wrote Frank Karsten, 'government debts keep rising in most democratic countries. ‘Austerity’ is a code word for ‘spending less than we had wanted, but more than in the past.’ In the end, they wind up raising taxes, rather than lowering expenditures to cut deficits.' As we reported last week, central banks around the world continue to cut their euro holdings for the third straight year. The Old World’s scrip now accounts for only 23.3% of foreign reserve holdings. If central banks are wary of euros… you should be as well." Continue reading →

Continue ReadingEurope Continues to Circle the Drain

The Democrats Finally Embrace Money Printing

"Even though Quantitative Easing started in 2008, it seems as if Democrats didn’t really 'get it'. They viewed it as a way to save the banksters’ collective bacon—they didn’t see it as the way by which the Federal government could go into limitless debt. But with Thursday’s testimony, it’s clear like a bomb blast that the Democrats finally understand what QE really means: The Federal government can go into as much deficit spending as it wishes, because the Federal Reserve will be buying the bonds that finance this deficit spending by way of QE. And now that they understand this, they are all in favor of more of it." Continue reading →

Continue ReadingThe Democrats Finally Embrace Money Printing