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Old 02-04-2019, 04:07 PM
Danny B Danny B is offline
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Join Date: Oct 2012
Location: L.A. Ca.
Posts: 4,448
Inescapable pension problems

The steady price inflation over the years engineered by the bankers was not offset by wage inflation. The differential was handed out as stock dividends to people who rented out their money. This deflation of purchasing power necessitated that women entered the workplace if a couple hoped to live above the poverty rate. Having children became a very expensive scenario. The combination of price inflation and, the destruction of the family meant that the traditional arrangement of caring for elders by family members was lost.
The State stepped in with a public pension system. This worked well for buying votes but, has become prohibitively expensive.

"The Public Employees Retirement System, like investors everywhere, had a tough 2018. U.S. stocks’ worst year in a decade was capped by a fourth-quarter plunge that wiped out trillions in wealth and most gains for the year. The pension fund’s full-year return was 0.48 percent, preliminary results show, falling well short of its assumed earnings rate of 7.2 percent.

As a result, system actuary Milliman Inc. estimated, PERS’ unfunded liability grew to $26.6 billion – a $4.3 billion increase"
"That’s obviously not good news, but Milliman suggested the situation may actually be worse than it appears. That’s because the system’s 0.48 percent return does not reflect fourth-quarter results for its investments in private equity partnerships, which comprise about 20 percent of the portfolio."
"PERS officials also note that last year’s poor investment returns will force them to transfer $255 million in reserves to fund the guaranteed earnings crediting for Tier One members’ pension accounts"

Calpers, "The new method, called “projected benefit obligation,” aligns pension assets and liabilities with new governmental accounting standards and how the federal government values its own employee pension program.

Using that methodology, CalPERS’ current unfunded liabilities, officially $179 billion, could be more like $360 billion, completely overwhelming the fund’s current assets and making it, on paper at least, hopelessly insolvent."

"In my previous post I demonstrated a grim reality: using official government figures that under current accounting conventions, we would need a wealth tax approaching 100% in order to fully finance the enormous unfunded liabilities for Medicare and Social Security.

These unfunded liabilities represent promises made by U.S. policymakers that exceed the dedicated funding set aside to guarantee them. This means that to pay for said promises, we either have to be willing to raise taxes higher than they have ever been, borrow amounts than ever before have been possible or substantially cut back on what has been promised. There is no magic way to square the circle."
"For those brave enough to dive deeper into this rabbit hole, I will use today's post to explain the two most important reasons the challenge of funding our two biggest entitlements is far bigger than advertised: the chasm to fill is much larger than the $97.8 trillion problem described in my last post:"

"The Medicare trustees soberly summarized this bleak future in their most recent report "By 2040, simulations suggest that approximately half of hospitals, roughly two-thirds of skilled nursing facilities, and over 80 percent of home health agencies would have negative total facility margins, "
An obtuse way of saying that they would be broke and closed.

Martin Armstrong Warns on Pension Crisis, Confiscation of 401k Plans ...
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