Yet another source of Apocalypse in a world already brimming with Apocalypse:
Gov. Bruce Rauner’s administration says a pending move by Illinois’ largest public-pension fund would increase the state’s required payment by hundreds of millions of dollars, potentially leading to higher taxes or massive cuts to education and social services already suffering amid a budget crisis.
The board of the Teachers Retirement System, which serves more than 400,000 teachers outside of Chicago, is scheduled to vote Friday on whether to lower its expected rate of return on investments. A reduction would trigger a larger contribution from the state, where the Republican governor and Democrat-led Legislature have gone more than a year without agreeing on how to close a multibillion-dollar budget hole or address a $111 billion unfunded pension liability.
The retirement system won’t make public the recommended change or its impact on Illinois’ payment for the next fiscal year until Friday’s meeting, spokesman Dave Urbanek said Wednesday.
When the system last changed its assumption – from 8 percent to 7.5 percent in 2014 – it cost Illinois an additional $200 million. That’s almost the total combined state funding for six public universities last year, Rauner’s senior adviser for revenue and pensions warned.
“Unforeseen and unknown automatic cost increases will have a devastating impact on the state’s ability to provide adequate resources to social service programs and education,” Michael Mahoney stated in a memo sent Monday to Rauner’s chief of staff. He also called the lack of public discussion ahead of Friday’s vote “troubling.”
Credit card debt, student loan debt, mortgage debt, corporate debt, small business debt, car loan debt, local debt, state debt, and national debt all don’t factor in the Ponzi-scheme like nature of everything from bank deposits, to pensions, to Social Security, to welfare. So at the very moment all the debt comes due, nobody will be receiving the money they expected to use to pay it.
It would be quite a mess even without organized, heavily armed gangs of criminal savages laid up right next to hoity-toity liberals who think guns are dirty and violence in self defense is immoral – all in cities which will have such disorder that food delivery would be impossible even if every store hadn’t been burned to the ground in a mass fit of vibrancy.
It is all shaping up to be a nice little Apocalypse – and that is before the pandemic hits.
[…] Apocalypse Pensions […]
Given that political will is and will always be lacking to tell the whining pensioners that sometimes unrealistic promises aren’t kept because they simply can’t be, the popular will must stiffen and generate a refusal to “contribute” more of their earnings to mollify a gang of already overly mollycoddled public employees. The wise adult learns to live with less and discover its joys, because when the likely-inevitable (an oxymoron like “likely alternatives” when there can be only one) drastic cutback of pensions and perhaps even social security takes place, one will have fewer forced lifestyle adjustments to make.
Note what the budget concern is. Not funding police. Not building roads. Not funding the court system. It’s “social service programs.”
That speaks volumes.
To “everlastingphelps,” you nailed it. Remember, the people who staff those “social service agencies” are de facto, but not de jure, employees of the state. It is into their hands most of the loot disappears, and “serving” the poor, et.al. is simply a rationalization for a vast apparatus of political patronage to exist. This is why Illinois cannot balance its budget, and never will.
Failure to make timely pension contributions by Illinois’ inveterate crook-legislators is simply a means of borrowing from the pension funds without issuing a bond.
Unlike Uncle Sam’s managers (CONgress), state pols can’t issue an Ocean of bonds people will treat as electronic gold. IL’s bond rating is already the lowest in the USA, so they really don’t want to issue more explicit debt. Solution? “Borrow” from the state’s pension funds by simply skipping payments. What would be a better way to obtain more from the state treasury with which to line the pockets of supporters/family/cronies, etc.?