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| The affect that overspending has on Social Security and pensions; San Bernardino as a prime example | |
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| Tweet Topic Started: Oct 25 2012, 01:05 AM (224 Views) | |
| Pat | Oct 25 2012, 01:05 AM Post #1 |
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Fire & Ice Senior Diplomat
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I think how cities in California are approaching their finances is microcosm of how Obama and the democrats are approaching governing our nation. Refusing to cut spending and using phony accounting as they have done with the healthcare law. And letting social security flounder without any plan for fixing it. The next step will be for the federal government to begin the process of weaseling out of entitlement obligation for seniors, a process already underway by diverting medicare funding. I think it is class warfare at it's extreme being practiced by the far left against blue collar America. When San Bernardino refused to cut spending, this was a volley shot at all who were promised a pension in return for lower wages. Yes, pensions make up a large part of a worker's compensation, the worker sacrifices on payday for security in old age.. As San Bernardino goes, watch other towns and cities follow suit and the federal right on their heels. Published: Oct. 23, 2012 Updated: Oct. 24, 2012 7:57 a.m. San Bernardino halts pension fund payments Bankrupt city owes $5.3 million to CalPERS; judge may have to decide payment priorities. THE ORANGE COUNTY REGISTER The city of San Bernardino filed for bankruptcy protection three months ago, and shortly afterward was reported to be under investigation by the federal Securities and Exchange Commission, allegedly for hiding deficits by diverting money intended for sewers, roads and construction to pay ongoing bills instead. Now, the Wall Street Journal reports the Inland Empire city of about 210,000 residents "has stopped making its regular payments to the California Public Employees Retirement System" and owes $5.3 million toward its employees' pensions. A San Bernardino official told the Journal the city needs to be put on a payment plan because it doesn't have enough cash to pay its bills. Article Tab: A San Bernardino sign on I-10 East is seen July 11, 2012. The San Bernardino city council voted Tuesday night in favor of the city filing for bankruptcy. This is just the latest in a string of California municipal fiscal difficulties. Perhaps more troubling, San Bernardino may offer a glimpse of the future for other cities struggling to avoid bankruptcy as varied interests and creditors make demands for limited funds. A lawyer for the state employees retirement system, known as CalPERS, says federal bankruptcy law doesn't pre-empt state control over benefits overseen by the fund, the Journal reported. POLITICAL CARTOONS: 40 cartoons on the last debate, undecided voters and Lance Armstrong But with pension investment returns down and pension costs rising, other troubled cities might follow San Bernardino's lead if the cities think bankruptcy judges will relieve them of pension commitments, Karol Denniston, a bankruptcy lawyer at Schiff Hardin LLP in San Francisco, told Bloomberg news agency. If bond insurers win their argument that pension debts should not be given priority over other creditors, it is an open question whether pensioners could see retirement checks trimmed, or current employee contracts abrogated. Cities contribute monthly to CalPERS, which manages $229.8 billion in investments for 1,500 cities, counties and other government agencies. It is not common for cities to be delinquent on CalPERS payments. Stockton and the city of Mammoth Lakes, both of which also filed for bankruptcy this year, continue to make their payments. CalPERS spokeswoman Amy Norris told the Los Angeles Times that delinquent payments would have no immediate effect on pension payments to retirees, but eventually could. "Ultimately if payments are not made, they could be terminated and any available assets placed in our terminated pool," the Times quoted her. "This means no additional contributions would come in, and benefits would be paid from what remained and how that pool is invested. That could possibly impact pensions." When San Bernardino filed for bankruptcy protection it had a $46 million deficit. The City Council has since cut the general fund budget by about one-third. There are about 1,600 retired San Bernardino workers and 1,700 active city workers covered by CalPERS. "The city's broke because leaders resorted to accounting tricks, rather than reduce spending as the recession drove down property taxes and sales levies," San Bernardino Treasurer David Kennedy told Bloomberg. |
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| Neutral | Oct 25 2012, 01:36 AM Post #2 |
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Fire & Ice Senior Diplomat
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I read an article recently that implied several CA cities are going to go bankrupt. Some pensioners are going to love socialism when it's all said and done. lol |
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| Berton | Oct 25 2012, 04:11 AM Post #3 |
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Thunder Fan
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| Pat | Oct 25 2012, 04:14 AM Post #4 |
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Fire & Ice Senior Diplomat
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That is one of the better cartoons posted here. The artist forgot the hammer and sickle sign hanging from the castle.
Edited by Pat, Oct 25 2012, 04:14 AM.
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| tomdrobin | Oct 25 2012, 04:49 AM Post #5 |
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Fire & Ice Senior Diplomat
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Obama and the dems have offered spending cuts. They just want a balanced approach of cuts and revenue increases (aka raising taxes on the wealthy). The CBO is phoney accounting? Maybe in right winger speak, but not in the real world. And, the real definition of phoney is trying to say the problem with California cities is comparable to the federal deficit problem. Edited by tomdrobin, Oct 25 2012, 04:50 AM.
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| Berton | Oct 25 2012, 04:54 AM Post #6 |
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Thunder Fan
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In approaching the nation’s fiscal challenges, President Obama has repeatedly called for a “balanced approach,” by which he means cutting spending but also raising taxes. That may sound appealing on the surface. However, the reality is that before President Obama exploded the size of the federal government, our existing tax rates were more or less adequate to pay for the government we needed. President Obama claims now to be offering a compromise. In fact, by undoing only some of the harm he has inflicted on our fiscal health over the past three years, he would ratchet up permanently the size of government and the tax burden on the American people. President Obama’s proclivity for fostering uncertainty about the long-term shape of the tax code is particularly troublesome. He has embraced one temporary solution after the next while rejecting permanent adjustments that would bring some predictability and stability to investment decision-making. The result is a business climate marked by hesitation. When President Obama complains about banks refusing to lend and businesses refusing to hire, he should consider the impact of his own policies on that state of affairs. No discussion of President Obama’s tax policies would be complete without a reference to Obamacare and its $500 billion in tax increases. Whenever President Obama discusses the need for more tax revenues, Americans should remember that he already got them and spent them on a health care scheme that is itself proving to be hugely disruptive to the economy. LINK |
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| tomdrobin | Oct 25 2012, 05:15 AM Post #7 |
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Fire & Ice Senior Diplomat
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Politifact says a fact check show these claims form the Romney campaign are false. http://www.politifact.com/truth-o-meter/statements/2012/jun/28/mitt-romney/mitt-romney-says-obamacare-adds-trillions-deficit/ |
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| Berton | Oct 25 2012, 05:22 AM Post #8 |
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Thunder Fan
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