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Is the economic state of a region the same as the fiscal state of a region?
Congress doesn't GAF about troubled municipalities because those municipalities don't lobby/pay/corrupt Congress. And even if they did, they couldn't outbid the corrupt payments of the FIRE/UCA
Is the economic state of a region the same as the fiscal state of a region?
It's not as good as many would like you to think.
California, Illinois on Brink of Pension Crisis; New Actuarial Rules Will Force States to Admit Problems
Many states, especially California and Illinois, have had severe pension underfunding problems for many years.
However, new actuarial pension rules will finally force states to admit the problem. Thus, it should not be surprising that talk of "technical bankruptcy" and “service insolvency” is growing.
Here are some pertinent ideas from California on the Brink: Pension Crisis About to Get Worse
•Moody’s new credit standards for public pensions would nearly double the unfunded liabilities for state and local pension plans in California to $328.6 billion from $128.3 billion.
•California has the second lowest credit rating at Standard & Poor’s of all 50 states; Illinois now has the worst. Moody's new standards would drop the funded status of these plans to 64%, versus a previous estimate of 82%, the Center said.
•“By standard accounting methods, some state pension funds will run out of assets within as little as five years”
•New rules will lower expected rates of returns on their pension assets, instead of the often overstated returns they now use to paper over holes in their plans blown out by bad investments.
•Meredith Whitney says California is papering over budget holes with gimmicks, like raising taxes retroactively, pushing state expenses onto local towns and cities that can’t afford them, and underfunding their pension funds. "It’s so much worse than the rosy picture that the headlines suggest,” the CEO of Meredith Whitney Advisory group says.
•The Senate Joint Economic Committee reiterates what Whitney says. “Many states and localities have regularly skipped or underfunded contributions to pension plans,” the report said. “Over the past five years, state and local governments have underpaid actuarially required pension contributions by more than $50 billion. The worst culprit of all, Illinois, has underpaid its pension contributions to the tune of $28 billion over the past 15 years.”
•Illinois’ plan is just 44% funded, or 30% using “conventional accounting standards,” the Senate committee says. Los Angeles’ combined plans would fall from 77% funded to 50% funded.
•San Jose’s combined plans would fall from 75% to 60% funded.
•San Francisco’s combined plans would fall from 88% funded to 69% funded.
Trouble Will Escalate
Many California cities are in serious trouble, and that trouble will grow by leaps and bounds as soon as there is a significant stock market correction.
Pension plans typically assume 7.5% returns. That's not going to happen on a sustained basis with 10-year treasuries yielding close to 2%. Yet, any significant rise in bond yields will crush existing bondholders as well as wreak havoc in equities.
Moody's wants states to assume 5.5% returns, but even that is far too high. The stock and bond markets are now so bloated thanks to Fed bubble-blowing policies that 0-2% returns for a full decade is a distinct possibility. And not a single pension plan in the US is remotely prepared for such an event.
Read more at http://globaleconomicanalysis.blogsp...wseGzETEQKz.99
Nope. See California. lol
Excellent distinction. Posters who've demonstrated they're incapable of making that distinction:
scroteface
angrydude
antichrist (DarrinS)
boobie4three
kingsfanwithoutname (TSA)
After reading everone's quotes it seems California is not so much on a road to recovery, but rather they just are not sucking as badly at some things.
It would be foolish to look at one while ignoring the other.Excellent distinction. Posters who've demonstrated they're incapable of making that distinction:
scroteface
angrydude
antichrist (DarrinS)
boobie4three
kingsfanwithoutname (TSA)
Wow. Even after the distinction between economic and fiscal health, Conservatives are still unable to bring themselves to admit that California's ECONOMY is recovering.
Who knew a state could be so polarizing...
Sure, if you're able to show a relationship between the two. You did not even appear to be able to make the distinction.
What state doesn't have fiscal liabilities up the wazoo?
Even 'fiscally conservative' Texas has more debt ac ulated than California...
http://www.city-journal.org/2013/23_...exas-debt.html
California has the problem that some of that debt is due sooner, but that's where a healthy economy helps them.
God you are so stupid.
What the does a recovery mean to you?
That GDP is going up? Or that the fundamentals of the economy are improving? They are not the same thing.
The "growth" is all illusory, and will implode at the first sign credit is drying up again.
But hey, lets focus on overly simplistic headline numbers and sweep the rest under the carpet.
If the choice is between muni/school bonds and unfunded pension liabilties, I'm going with muni bonds.
Some peeps here talk like this debt liability is static, but debt gets restructured all the time. The whole point is that it's much easier to restructure when you have a vibrant, growing economy. When you compound the fiscal problem with a ty economy you end up like Detroit, where people simply flee.
then TX should quit lying to employees than their pension agreements will be honored.
in RI:
"when Central Falls filed for bankruptcy protection in 2011,” the Pew report said. It recounted the Chafee administration’s appointment of state receivers who took over city government, cut budgets, raised taxes and gutted pensions while the General Assembly guaranteed investors their bonds would be paid in full."
http://www.providencejournal.com/bre...tral-falls.ece
"In Rhode Island, Sasse explained, state law protects bondholders in the event of a municipal bankruptcy. And that’s exactly how it played out when the small city of Central Falls, R.I., passed through bankruptcy in 2012. City employees and pensioners were hit hard, forced to renegotiate existing and past contracts. But the city never missed a payment on its general obligation bonds.- Gary Sasse, municipal finance expert
“The first thing that needs to be done is to achieve a balance between the bondholders and city employees.”
Sasse said protecting bondholders is critical to protecting the financial reputation of the city in question, as well as other municipalities in the state and the state itself. If that reputation becomes tarnished and investors lose faith in a city’s ability to repay its debt, it could have a contagious effect on the rest of the state."
Read more: http://www.foxbusiness.com/governmen...#ixzz2ZzbEwxEV
bondholders paid off, employees ed.
Contracts with the (1%) bondholders are honored, contracts with the 99% are worthless.
It wasn't debt that killed Detroit...First it was white flight to the suburbs and then working class black flight to the suburbs leaving the city to the wretched, drug and crime ridden underclass. It wasn't debt that killed Detroit, it was their tax base leaving to get away from the inner city animals.
Absolutely. Now stop arguing with me and get to work!
lol...now fox is credible. Although, this reminds me of the GM bankruptcy settlement.
If people had jobs, they would stick around. The problem was that there were no jobs there. Detroit has gone on an unemployment e since the early 2000s, with a peak of 27% in 2009. Still at 16% today.
Here's compared with Chicago:
http://www.google.com/publicdata/exp...=seasonality:U
Man, that's brutal.
so you think foxBUSINESS is lying about those facts?
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