Natural News – by Mike Adams
Last week, Detroit declared bankruptcy, becoming the largest city in
U.S. history to take such drastic action in the face of financial
insolvency. A declaration of bankruptcy isn’t what most people think it
is, though: it’s not just a statement of “we’re broke!” It’s actually a
way for the city to clear its slate of all financial obligations and not
pay the retirees it owes.
What are the largest financial obligations the city facing? Pensions. $3.5 billion worth of pensions, to be exact.
Yes, Detroit owes former government employees — teachers, firefighters, cops and more — a whopping $3.5 billion in current and
future payments. Except
Detroit doesn’t have $3.5 billion to
pay the pensions. The city is in a state of economic collapse.
Remember, the U.S. government used billions in taxpayer money to help
General Motors
move its manufacturing offshore to countries like China. As a result of
economically-insane actions and criminal mismanagement, a city that
used to be the hub of industrial output in America has become a ghost
town of abandoned buildings, crumbling infrastructure and financial
destitution.
But even as all this was becoming apparent, the government workers there continued to collect fat
paychecks
and pensions, all based on the promise that endless population growth
would out-pace the rise in pension obligations. Many pensioners are owed
over $100,000 a year from the government, and this is true across
California, Illinois and many other states as well.
Chicago, for example, owes $19 billion in pension
payments that
it doesn’t have, and the city of Los Angeles is more than $30 billion
in the hole. The story is much the same in every major U.S. city.
As the
Detroit Free Press now reports:
Early this year, the Pew Center released a survey showing that 61
of the nation’s largest cities — limiting the survey to the largest city
in each state and all other cities with more than 500,000 people — had a
gap of more than $217 billion in unfunded pension and health care liabilities. While cities had long promised health care, life insurance and other benefits to retirees, “few … started saving to cover the long-term costs,” the report said.
Read that report here:
http://www.pewtrusts.org/uploadedFiles/wwwpewtrustsorg/Reports/Retire…
Detroit’s bankruptcy being challenged
Realizing it flat-out doesn’t have the money to pay these pension obligations, Detroit had little choice but to declare
bankruptcy in an effort to avoid paying the pensions. In effect, this is
a confiscation of all pension funds by
the government, meaning that retired cops, firefighters, school
teachers and so on will never see a dime of the pensions they thought
they had earned.
Naturally, those who are owed the pensions are furious about all
this. Imagine working 40 years on the job, building up a retirement only
to have that retirement stolen from you by a local government that’s
steeped in corruption and financial mismanagement. The word
“incompetent” doesn’t even begin to describe Detroit’s political
leadership. It’s more like “brain damaged” or “criminally insane.”
But it’s also commonplace. Across the country, city governments have all
spent the pension funds instead
of saving them. Almost no large city has the funds necessary to pay its
obligations to retirees. Pension financial planning strategies are
tragic nightmares of broken promises, dishonest politicians and
delusional workers (who still somehow believe they’re going to get
paid).
In Detroit, the pensioners are fighting back, claiming Michigan’s
state constitution
forbids cities like Detroit from wiping away pension obligations by
declaring bankruptcy. It’s all headed to the courts now, where even if
Detroit’s bankruptcy is nullified,
the city still doesn’t have the money to pay its pension obligations.
So it’s a no-win situation regardless of the outcome. Where the money
doesn’t exist, nobody gets paid regardless of the legal wrangling in
the courts.
Is Detroit “Too Big To Fail?” An Obama bailout may be imminent
There’s already talk of Obama bailing out Detroit, meaning the
federal government would take on the debt of the mismanaged city and its
pension funds, eventually passing on those obligations to taxpayers all across the country.
Yep, that means you and I will be paying the $100,000
retirement pension of some ex-cop in Detroit. It’s all part of the federal government’s new plan to
reward waste and punish fiscal responsibility.
No wonder Sen. Rand Paul says Detroit will only be bailed out “over my dead body.” As
Breitbart.com reports,
Sen. Paul has stated, on the record, “I basically say he [Obama] is
bailing them out over my dead body because we don’t have any money in
Washington.”
Breitbart.com goes on to state, “Paul said the reason he is going to
fight to stop any efforts to bail out Detroit is that if the president
succeeds in bailing it out, that will send a signal to the rest of
cities and states nationwide that the federal government will bail them out to if they conduct reckless spending.”
“Those who don’t have their house in order, who are teetering on
disaster, will continue to make bad decisions.” – Sen. Rand Paul.
He’s right, of course. But rewarding reckless spending has become the
new sport in Washington, where globalist banks routinely receive
hundreds of billions of dollars in taxpayer bailouts after losing money
on outlandish derivatives bets that went sour.
If we bail out Detroit, then the precedent is set: The taxpayers will
have to foot the bill to bail out Chicago, Los Angeles, New York,
Phoenix, Seattle and every other city that’s on the brink of financial
disaster because
bureaucrats are short-term thinkers who typically only think ahead to the next election, not the next generation.
“Public pension plans across the nation are in fiscal distress.
Generally underfunded, most now require far greater contributions from
governments than initially envisioned,” writes the
California Common Sense organization, which goes on to state:
In 2012-13, Los Angeles’s pension costs are expected to rise to
$1.3 billion, or 18% of the city’s budgeted expenditures. In 2002-03,
just 10 years ago, pension costs were only $157 million, or 3% of total
expenditures. Over the last decade, pension costs have grown at an
annual average growth rate of 25% and have outpaced spending growth for
every major area of the city’s budget.
“In April Moody’s Investors Service warned it could downgrade the
ratings of Chicago, Cincinnati, Minneapolis, Portland and 25 other local
governments and school districts as part of a change in how it factors
public pensions into debt grades,” writes
Forbes.com.
“In Chicago, teachers’ pensions alone cost $1 billion a year, while
overall debt service accounts for close to a quarter of the city
budget.”
The top 10 biggest U.S. cities on the brink of pension bankruptcy
According to
Business Insider,
here are the top 10 U.S. cities whose pension obligations will soon
collapse: (this article was originally published in 2010, so we have
updated the “years” to reflect 2013)
#1 Philadelphia - Unfunded liability of $9 billion, $16,696 per household, only 1 year before the pension accounts are empty
#2 Chicago - Unfunded liability of $44.8 billion, $41.966 per household, money runs out in 4 years
#3 Boston - Unfunded liability of $7.5 billion, $30,901 per household, money runs out in 4 years
#4 Cincinnati - Unfunded liability of $2 billion, $15,681 per household, money runs out in 5 years
#5 St Paul - Unfunded liability of $1.4 billion, $13,686 per household, money runs out in 5 years
#6 Jacksonville - Unfunded liability of $4 billion, $12,944 per household, money runs out in 5 years
#7 New York City - Unfunded liability of $122 billion, $38,866 per household, money runs out in 6 years
#8 Baltimore - Unfunded liability of $3.7 billion, $15, 420 per household, money runs out in 7 years
#9 Detroit - Unfunded liability of $6.4 billion, $18,643 per household, money runs out in 8 years
#10 Fort Worth - Unfunded liability of $2 billion, $7,212 per household, money runs out in 8 years
Note that some of these numbers were actually
optimistic. Detroit, for example, was predicted to run out of money in 2021, yet it already declared bankruptcy in 2013. What you are looking at here is a looming cascade of municipality bankruptcies over the next 10 – 20 years.
Cascading financial collapse
Nobody saves in America anymore; not cities, not states and of course
not the federal government which Obama has brought to the astonishing
debt level of $16 trillion (it was only $8 trillion when he first took
office). It begs the question: If the cities bail out the pensioners,
and Washington bails out the cities,
who’s going to bail out Washington and its exploding debt?
The answer, of course, is nobody. Central banks all around the world
are already sitting on far too much U.S. debt that’s being eroded by the
hour as the Federal Reserve commits “quantitative easing” that dilutes
the global dollar supply. They aren’t going to take on trillions more to
bail out a nation now seen as a global imperialist bully that runs NSA
spying on its own allies while routinely engaging in economic espionage
through currency manipulations.
The American government is widely hated throughout the world today.
Most nations probably wouldn’t mind seeing the USA collapse into
financial oblivion. And within a few years, they may just get their
wish.
“On average, pensions consume nearly 20 percent of municipal budgets,” writes
Anthony Flint of The Atlantic Cities.
“But if trends continue, over half of every dollar in tax revenue would
go to pensions, and by some estimates in some cases would suck up 75
percent of all tax revenue.”
Financial collapse is not a doomsday conspiracy theory; it is mathematical inevitability
The upshot of all this is that if you are counting on a government
pension to pay your bills during your retirement years, you may need to
write that off because
it probably won’t be there for very much longer.
This is true not just for local and state government workers, but
also for federal government workers. Yep, all those TSA agents, DHS
workers and FDA bureaucrats are going to see their own pensions stolen,
and I can’t say that I’m shedding tears over TSA goons not getting their
pensions. (“Pedophilia pensions!”)
“I mean the statistics in California are staggering,” said Sen. Rand
Paul. “I think there’s over 100,000 people there getting over $100,000 a
year in retirement. You got police chiefs in medium-sized cities
getting $350,000 a year for a salary. It’s become untenable. But the
main thing is we cannot send a signal from the federal government that
cities and states are going to be too big to fail.”
Where all this really hurts, though, is at the local level. In most
cities, people like firefighters, cops and school teachers are wildly
under-paid. They dedicate their lives to serving the community, often
putting their own lives at risk in the process. Stealing their pensions
is especially malicious given how much they have sacrificed to earn
them.
But there’s nothing that can be done to save them at this point. The
mathematics are already in motion and unstoppable. Nearly all big-city
pension obligation projections have been based on the false assumption
that
endless economic growth would provide a never-ending tax base from which pension obligations could be paid. That assumption, however, was a
willful delusion in which city managers and bureaucrats happily engaged.
There is a
day of reckoning coming for America, and it’s going
to be a day of nationwide outrage as pensions all across the country
are confiscated or destroyed in a cascading chain of bankruptcies. At
the same time, the federal government will no doubt embark on a
Cyprus-style private bank account confiscation program that steals
private wealth from the American people. Wiring money out of the country
will be made illegal, and all forms of wealth — including retirement
accounts — will be subject to government confiscation.
At that point, only people who have gone to great lengths to protect
their assets will have anything left. What holds value in such a
scenario? Land, bullets, rifles, hand tools, stored food, silver coins,
gold coins, iodine disinfectants and antibiotics, to name a few obvious
items. Skills and education also rank high.
Detroit’s bankruptcy tells us the era of financial demise has begun. Now
it’s only a matter of time before
what happened to Detroit spreads to Los Angeles, Chicago, Philadelphia,
Boston and other large U.S. cities. It is no coincidence that DHS and
the feds are now routinely running paramilitary police state training
exercises in high-density urban areas.
As bad as pensions are, unfunded health care liabilities are far worse
For the real story on all this, take everything you’ve just read
about unfunded pensions and dig that hole ten times deeper. Because the
unfunded health care obligations are ten times worse.
According to the Pew research document at
www.Pewstates.org ,
a fiscal assessment of 61 large U.S. cities revealed that while
pensions are 74% funded, retiree health care liabilities are only 6%
funded.
You read that correctly: cities have only saved 6 cents on the dollar
for what they’re going to need to pay the health care costs of
retirees. And that’s assuming health care costs don’t keep skyrocketing
thanks to hare-brained monopoly programs like Obamacare which lock in
guaranteed monopolies to the drug companies, cancer centers and
hospitals that now extract nearly one out of every four dollars of
economic activity generated in across America.
Here’s the chart:
What this means in reality is that
health care obligations will have to be abandoned. So at the same time cities confiscate pension funds, they will also abandon health care obligations.
For many retirees, this means they will lose their pensions and their health care benefits at the same time.
This is what will ultimately lead to widespread riots in the streets
followed by the police state crackdown that the federal government has
been planning with its purchase of
billions of rounds of ammunition,
thousands of armored assault vehicles, full-auto assault rifles and other equipment to be used on the streets of America. The
IRS is now training with AR-15s in order to engage American taxpayers at gunpoint. Even the Wall Street Journal now admits that the
militarization of American police is wildly out of control, saying:
Law-enforcement agencies across the U.S., at every level of
government, have been blurring the line between police officer and
soldier. Driven by martial rhetoric and the availability of
military-style equipment — from bayonets and M-16 rifles to armored
personnel carriers — American police forces have often adopted a
mind-set previously reserved for the battlefield.
This also tells you why government is secretly begging for a mass
pandemic to wipe out all the elderly people in America: it would save
cities and states from bankruptcy! No wonder government loves to promote
Big Pharma — it’s the fastest way to kill people off and therefore not
have to pay their retirement benefits.
Longevity is the enemy of government because
the longer you live, the more you collect in benefits. The sooner you
die, the more you help government meet its unfunded financial
obligations.
I wouldn’t be surprised to find the White House one day running a new
public relations campaign with the message “Kill yourself. It’s good
for America.”
Or “Suicide is patriotic.”
New York Post - KATE BRIQUELET and ISABEL VINCENT 
