While the Ferengi portion of MOMCOM's empire (the 'upper' one percent) say they are doing quite well, the state budgets clearly are not.There is talk in financial circles that states may not be able to pay pensions or return tax refunds:
State governments in the United States had approximately $2 trillion set aside in pension funds and $3 trillion of “stated” pension liabilities in December 2008. By this measure, the funds seemed to be short nearly $1 trillion. But according to Rauh and Novy-Marx, the shortfall is more than three times larger, at $3.2 trillion. The lower estimate, they say, is the result of government accounting standards that require states to apply accounting procedures that severely understate their defined-benefit pension plan liabilities.(Kellogg Insight, emphasis added). It is a good thing the wars don't cost anything or we would have financial problems in this country wouldn't we?
Many states seem to be in dire straits. Relative to its revenues, Ohio faces the largest burden. It would need to devote over eight years of tax revenue solely to retirement funding to cover already-acquired pension liabilities. Colorado, Rhode Island, and Illinois are close behind. “Vermont, the least underfunded as a percent of total tax revenue, would still need over twenty months of tax revenue to make up for its pension fund shortfall,” Rauh says.
The Bush II budget propaganda "don't ask, don't tell" approach to war costs has been replaced with "we have to pay for the wars" in the current political configuration.
This leaves out the underlying, overlying, and just plain lying portion of the story: we have to borrow the money because we cannot pay for the wars.
That is one meaning of "pay".
The other meaning of "pay" is that since we are paying dearly with our freedoms, common welfare, national reputation, and general well being, the democrats may have a bill to pay in the 2010/2012 elections (is that the definition of "pay-GO"?) like the republicans did in the previous two elections.
Yes, we are paying very dearly for the stupid, endless, unamerican wars to make the one percenters obscenely rich while the nation as a whole, or the ninety nine percenters as we like to say, are obscenely plundered.
That is the way it goes when addiction generates commerce.
Addicts never seem to be able to balance the check book.
Dredd,
ReplyDeleteAll great points today. State budgets are symptomatic of overall federal fiscal health, as many of their programs are federally mandated and/or funded (or not) and the states don't enjoy the privelege of printing their own money (although California's recently issued debt bonds came pretty damn close).
Likewise, borrowing money to fight endless wars is a concept so stupid that nothing can really be added to make it any clearer. The fact that it doesn't just scare the bejeezus out of people tells me all I need to know about our current state of denial. The sheeple have effectively been pacified into comlete submission.
Unfunded liability (pension) defaults will probably be the first thing that wakes them up. Many that I've listened to think the primary result will merely be generational warfare, as the younger generations gladly give the finger to the aging baby boomers and their pension funds (which might be true to some extent), but they'll also have to deal with the social carnage such measures cause, as in will they finally get comfortable with strict "pay as you go" social services with no exceptions?
Imagine no money, no food, you starve; no money, no rent, you live in the street; and no money, no medical care, you die (in some cases slowly and dramatically) strictly implemented on a mass scale. If nothing else, it would be a living demonstration of the young's own future, even as they were strapped with the monumental debt and the decreased living standards it will impose anyway.
At that point I expect what remains of our civil society to come apart at the seams and foreign wars of occupation to be the least of our problems.
disaffected,
ReplyDelete"At that point I expect what remains of our civil society to come apart at the seams and foreign wars of occupation to be the least of our problems."
Like all disease, the warnings about how to avoid the disease do become moot once the pandemic sets in.
The time to warn, and the time of avoidance, is now.
The notion of too late, as you surmise or imply, is actually a reality the nation needs to grasp.