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Good point. Unlike another poster claims, having a GOP local and State government is certainly no guarantee that a combination Harvey/Irma problem won't be occuring shortly.
We talk about living in flood zones and question people why they made that choice to buy that home given the fact it could flood.
Yet this far larger storm of unfunded pensions can drastically effect homeownership costs.
I was looking at a home with taxes X and thought it was a stretch to be paying that much. Now I am beginning to see that home with a figure of 2X or 3X and thinking no way.
All of these pensions, both private and government, will receive huge haircuts through either sovereign default, inflation, or most likely both.
Not only do I believe its going to happen - but I also believe it will be witnessed and discussed here on this site by quite a few of the very same people who post here now.
This is why you don't count on the government to manage your retirement for you. All they'll do is take your money, and spend it on something else. The budget deficit will just be something else for some future politician to deal with.
As usual, every government organization that's intended to help people just turns into a huge money sink hole that accomplishes nothing.
You are ignoring we had to bail out the entire financial system when they screwed up.
California and it's liberals have created $992 billion in unfunded pension liabilities. Lots of six-figure pensions and free lifetime cadillac health care benefits.
Hopefully California has to pay every penny of these pensions also the pretentious, unqualified and illogical liberal Democrats promised them.
What is amazing is Califonia legislature rather than worrying about that 992 billion in pension liability that is unfunded due to the legislature being in bed with the public unions was more worried about Donald Trump.
California knows that it's about to fall of a fiscal cliff and is insolvent over the long-term so it diverts the public's attention by making worthless resolutions that mean nothing condemning a president they are jealous of.
Will be interesting to see how high the taxes will go and how terrible the public services can get in California. They already have third-world level of public services, overwhelmed and nearly non-existent safety-net for American citizens and lots of dumpy, outdated schools.
What is really going to be excellent when honest, well-run states like Nebraska, North Dakota, South Dakota will have tiny pension liabilities because they vote Republican.
It's quite possible that a sovereign debt implosion in California begins, and then ends with other severly debt-ridden states like Illinois and Oregon, simultaneously imploding, and it sends the whole house of cards crashing down.
About 75% of you reading this will see your home taxes and/or sales taxes double in five - ten years.
What will you personally do?
Will you sell and try and move to a community with less of a pension burden?
Will you down size to smaller home with less taxes?
Or will you take your monies and join the millions of Americans living overseas?
The problem is when you sell the tax rate is going to reduce your selling price considerably. People generally "buy the payment" or in other words they can only afford "x" amount per month for housing. It would be similar to interest rates increasing.
Public pensions are monies promised to government workers including police and teachers. Millions of workers have been promised trillions of dollars.
The problem is the politicians who are supposed to collect taxes to pay these future bills have either not been collecting enough money and pensions are underfunded or not funded at all.
Alternately, fund managers have projected stellar returns on pensions money year in year out with no market crashes.
" The storm is only beginning. Think Hurricane Harvey on steroids, but all over America."
"The problem is the politicians who are supposed to collect taxes to pay these future bills have either not been collecting enough money and pensions are underfunded or not funded at all."
They collected the money but, spent it on other things.
I have spent the better part of my adult life attending all levels of government meetings.
At benefit time, they all call in the consultants who prognosticate about pension funding. They always tell the elected that the agency can afford whatever raise or pension options are being considered. IMO, they pull numbers from their backsides. When do we get 8% growth for 13 or 14 years running?
IMO, this underfunded benefits crap will stop when some town, school district or cop shop sues the bastards and wins.
In the 40 years I worked in NJ the pension plans rate of return was 8.85%. You can question their assumptions going forward but these pension plans have an historical record that can be compared to what the assumptions were.
In NJ the sole issue was the State was to make pension payments of less than 1% of the budgets that covered State workers and teachers but failed to make that payment entrely or significantly less than they were supposed to. Now those accumulated years plus the 8.85% return on those funds need to be made up
I live in a state with fiscal responsibility so that won't happen.
I have an option how about if we just don't pay those pensions. Let the state go bankrupt or whatever it takes. Everyone should not suffer so just some career government employees have a cushy retirement.
Do you know how bankruptcy works?
Income over required expenses and assets are distributed. Both of those will cover pensions at the State level.
Remember only constitutional required spending would be protected other spending would be unsecured and creditors like bond holders and pensions would be paid first.
"The problem is the politicians who are supposed to collect taxes to pay these future bills have either not been collecting enough money and pensions are underfunded or not funded at all."
They collected the money but, spent it on other things.
Bingo
Like goodies that citizens wanted that helped them get reelected
This is why you don't count on the government to manage your retirement for you. All they'll do is take your money, and spend it on something else. The budget deficit will just be something else for some future politician to deal with.
As usual, every government organization that's intended to help people just turns into a huge money sink hole that accomplishes nothing.
Sure I get that. But for many people the only option to "manage their money" is rolling the dice in the Wall Street casino. There is going to be a big correction down the road, just a matter of when not if. At that point all the "money management" in the world is not going to save you.
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