Looming Crisis: State Budgets Soon to Be Under Siege
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Looming Crisis: State Budgets Soon to Be Under Siege
By Ed Easterling, Crestmont Research
There are numerous problem-solving and decision-making processes in the military and civilian sectors. All of them start with a common first step: Identify and define the problem. Get the first step wrong, and there is no chance for success.
Public employee retirement systems across the nation have a major problem. Yet the issues are not isolated to investment portfolios managed in the basements of cold, dark government buildings. Nor is the impact limited to retirees or near-retirees of those programs. The tentacles reach out to the taxpayers that backstop those plans and the people served by the government workers in those plans.
Pension plans are simple programs. They are set-up to receive contributions from employers and employees to be distributed later back to the employees as retirement benefits. But the plans expect to distribute more than the contributions that go in—and it almost always can. Down in the basement, the pension plan invests the contribution money over many years to produce a return. The return and the contributions combine to meet the obligations promised to the workers upon retirement. However, if that combination of funds is insufficient, then the taxpayers are expected to make up the shortfall.
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Loved your tribute to Dave Brubeck! Had an opportunity to see him perform with his son @ the Hollywood
Bowl in an all-star cast tribute to Stan Getz.An amazing time! He will be sadly missed. Who will replace these masters?
At the present time CALPERS is suing the City of San Bernadino for back pension contributions…..the city has filed for bankruptcy however. As goes CA, the rest of the nation goes. I feel this is a significant case that point other pension plans with the direction to follow to stay solvent. If CALPERS wins its case, it will reduce the populace of San Bernadino to become tax paying slaves to CALPERS. This result will have dynamic ramifications throughout America….can you ellicidate on what these ramifications might lead to. Thank you for your thoughts.