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States have $31 billion to pay $635 billion in retiree health care and other benefits

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posted on May, 3 2011 @ 04:37 PM
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I think they have a little problem...
But it's of their own making, they lied about the returns, it's was a big ponzi scheme all along.

There's a $1.26 trillion retirement shortfall... and states have not to money to pay what they promised... not by a long shot.

Pew Finds $1.26 Trillion State Retirement Shortfall, Says States Only Have $31 Billion In Assets To Pay For $635 Billion In Liabilities

"State pension plans represented slightly more than half of this shortfall, with $2.28 trillion stowed away to cover $2.94 trillion in long-term liabilities—leaving about a $660 billion gap, according to an analysis by the Pew Center on the States. Retiree health care and other benefits accounted for the remaining $604 billion, with assets totaling $31 billion to pay for $635 billion in liabilities."


But it gets worse :

The $1.26 trillion figure is based on states’ own actuarial assumptions. Most states use an 8 percent discount rate—the investment target that states expect to earn, on average, in future years. But there is significant debate among policy makers and experts about what discount rate is most appropriate for states to use when valuing pension liabilities. This is an important issue because, depending on how those liabilities are calculated, states’ total funding shortfall for their long-term pension obligations to public sector retirees could be as much as $1.8 trillion (using assumptions similar to corporate pensions) or $2.4 trillion (using a discount rate based on a 30-year Treasury bond). How states value long-term liabilities going forward will play an important role in defining the scale of their challenges and the actions they will have to take to meet them,



You were lied to, there's no money.




posted on May, 3 2011 @ 04:44 PM
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Ive know its been a shell game for a long time. Im just waiting for the SHTF to happen and it WILL happen unless the goverment CUTS 1.5 TRILLION from their yearly budget NOW!

But we all know this will never happen because the sheeple will get mad that we are cutting there SS or medicare. Well its eather cut a little and make it last or burn it up and not have it at all. The sheeple will chose the first
edit on 3-5-2011 by camaro68ss because: (no reason given)



posted on May, 3 2011 @ 04:48 PM
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Many states and probably even the federal government are in this boat. Told you this a long time ago, right here. This is why they have to reform peoples' benefits. This is why they have to shut the people up...collective bargaining-wise and otherwise.

They STOLE and/or LOST to Wall Street the money people put in as well as what was contracted as a retirement package. I had a list of states around the time of the issues in Wisconsin who were in this boat. And it's only the tip of the iceberg. And dumbass Americans still won't put 2 and 2 together and will listen to their little puppetmasters and hate unions for this.



posted on May, 3 2011 @ 05:14 PM
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reply to post by camaro68ss
 

why should ss and medicare be cut, but not these benefits???
please, explain???
I mean, compare the average ss check to the average pension check, well, sorry, but cutting those pensions will save more money!!!



posted on May, 3 2011 @ 05:22 PM
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But...we got Osama...who needs money?



Joke's on us, folks.



posted on May, 3 2011 @ 10:53 PM
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reply to post by dawnstar
 


SS and Medicare are actual laws (taxes). Benefits (especially pensions) are actual contracts.. which are actually more binding than laws. Laws can be changed on a whim .. contracts must be negotiated, or else end up in court. In all likelihood if states were to cut back on Pensions right now, for what is currently owed, the lobbies and unions could sue forcing an immediate liquidation of state assets. Assets like land, buildings, holdings, investments etc.

Also, many states have "discretionary spending" which is what they cut, which usually includes police, fire, education and some social programs. Things like Pensions, lottery funds, highway funds, certain taxes and a variety of other programs are binding, meaning their funds cannot be altered, converted, moved or temporarily stopped without a ballot.

IMO, states will accept a bailout from the Feds before they ever renig on a pension, or be forced to liquidate assets. Also, they'd defend everything on their books before so. For instance, New York was prepared to shut down many schools, police and fire and many other programs after the economic crash wiped out the New York Pension Fund. Federal Funding kept a lot of the protection services running.



posted on May, 3 2011 @ 11:11 PM
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This is the best argument for socialized medicine that I have seen yet. Throw everyone into the same pool, eliminate excess profits and the states just may be able to live up to their obligations. Let's face it, they are going to end up on Medicare anyways.



posted on May, 4 2011 @ 12:15 AM
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This:



Is extremely sobering.


One thing I do not see mentioned is whether or not Obamacare has had any impact on these figures. That could be a possible cause here, increasing costs well beyond what states had prepared for. I only say that because I haven't heard anything at all about states raiding their retiree's health accounts and, I believe, some of the states on the list which have seen their health plans go under water in the past 2 years have laws forbidding such shenanigans.



posted on May, 4 2011 @ 12:46 AM
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reply to post by burdman30ott6
 


Obamacare, sometime in the next 10 years is supposed to cut into Medicaid, replacing much of it, which States currently pay for. Whether it eliminates it or not.. offsets expenses or not.. or whether it will even change anything .. has not been explained.

However, even with the advent of health exchanges (those Fascist little centers where we can buy our forced health insurance..) may not actually reduce the cost of States.

Also, and more importantly, health care is not the largest liability of states, in fact the most expensive part of health care is "emergency." .. Like when the Ambulance comes in from the Projects, the Trailer Park, the bum passed out under the bridge, because they have a "headache" and needs pain meds .... that's a State expense. But not a liability. Because it's paid then and there. Pension plans, which often go 500k-1.5m per worker at retirement, plus continued pay outs or lump sum exchanges are the biggest liability. Also the Health Insurance Premiums of retired workers. Under Obamacare States will still pay worker insurance, and in fact, insurance prices will probably go up 30%+.

A good example of Obamacare in action: Mitt Romney enacted a Obamacare type plan in Massachusetts .. it's underwater big time, and only 2% funded.



posted on May, 4 2011 @ 05:08 AM
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reply to post by Rockpuck
 

there's one simularity though, both the social security fund and most of the pension funds invested in some form of treasury bond.....america might have a huge debt, but most of it is owed to the american people and institutions!!!
so, well, lets say pete down the street borrowed a thousand bucks from ya . and well, after two months, he hasn't paid you back, but you've been watching, you've noticed the new boat in his back yard, the new siding on his home, and well, you're wife has mentioned that she ran into his wife at the store, and she was buying herself a new wardrobe!! well, pete says he's broke, he can't give ya any money!!!
this seems to be very similar to what our gov't is doing...
they can't afford to pay their debt (the money they borrowed from the social security fund.....) and well, what do ya think will be next...those other treasury bonds that are held by the american citizens, and those pension funds??? so, well, are you gonna just pat pete on the back and reassure him that it's all okay, don't worry about the thousand bucks he owes ya?? heck, in my neck of the woods, well, pete might not be living that much longer!!! so, why do people think that those of us who are approaching retirement age, have paid into the social security fund most of thier lives are going to be willing to??
as far as I am concerned, this gov't can come up with billions out of thin air when it's their precious wall street buddies who are in trouble...well, they can just keep those presses running for the seniors and PAY BACK THE MONEY THAT THEY OWE TO THE FUND!!
they start a war in libya, then they turn around and start saying how the troops might not be paid what is owed them.
they claim they have no money, but then it's found out that they are paying a million dollars for a stupid frog riding fairy queen for their new million dollar pentagon building!!!
they have been creating money out of thin air for the past serveral years....to give to their buddies, for bailouts, for stupid projects that most of us could care less about!!! well, I'm sorry, the damage is already done!! they might as well, just keep printing the danged money, creating those little electronic bits and bites, and well, keep their obligation to the social security fund also, what the heck, it's only money, it's only bits and bites in the computer, ain't like it's gonna be worth anything in the end anyways!!!
otherwise, well, what is good for the goose, it also good for the gander.....don't expect me to honor my debts either?? and that includes when tax time comes around!



posted on May, 4 2011 @ 12:46 PM
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reply to post by dawnstar
 


Inflation is part of the "Liability" .. when the directors of the various funds, for instance, the pensions draws out the next 10 year prospectus for what each individual will by estimate get, inflation is considered. Inflation will draw resources from other sectors of the economy, unless tax receipts increase, inflation then eats the bottom line. So the algorithms they use to determine the estimated liability vs the estimated income vs the estimated inflationary losses of said income usually show a deficit. The Fed might be able to "print" more money to cover debts, but states cannot. And even the Fed, if they did such a thing would end up with more problems on their hands. The only alternative would be to cycle the currency into a new form, which the US has done several times in the past 200 years.

Think of it this way. The Fed owes $100. All their programs cost $125. They bring in $100. So each year they borrow $25 to cover the cost, and each year that number grows because of interest. So one year they print $125 to cover what they owe and what they would borrow. Laws of economics says inflation then takes place, so now all their programs cost $250 and their income is only $100 now they have to borrow more than what they did but no one will loan now. So they print.

That's an inflationary spiral, and it's in rough terms exactly what happened in Germany, Hungary, Zimbabwe and numerous other places in the past 2 centuries.

Our Govenrment uses "Quantitive Easing" which is their way of very slowly supplementing the amount we have to borrow by printing money. By using the Fed the interest is returned to the Treasury and the principle destroyed, hypothetically inflation is then "temporary" but it really only depends on how much "leaks" into the economy through government spending. IMO, the whole fight over Gov spending is less to do with actual debt levels and more to do with trying to fight inflation since the Gov's money is injected into the economy, usually the top tier of the economy, it's causing higher than average inflation.




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