Mitch McConnell to State Pension Funds: Drop Dead

The Senate Majority leader Mitch McConnell today said there would be no bailout for state pension funds and states should declare bankruptcy instead. His remarks were no doubt meant to apply to any municipalities that were hoping to get rescue money and direct some of it to their pensions. From Bloomberg:

Senate Majority Leader Mitch McConnell said Wednesday he favors allowing states struggling with high public employee pension costs amid the burdens of the pandemic response to declare bankruptcy rather than giving them a federal bailout….

“You raised yourself the important issue of what states have done, many of them have done to themselves with their pension programs,” he said. “There’s not going to be any desire on the Republican side to bail out state pensions by borrowing money from future generations.”…

McConnell may also find himself in conflict with President Donald Trump. The president said Tuesday after meeting with New York Governor Andrew Cuomo that states will need assistance. “And I think most Republicans agree too, and Democrats,” Trump said. “And that’s part of phase four.”

It’s ironic to see McConnell’s media interlocutors single out California, Illinois and New Jersey as profligates when McConnell hails from Kentucky, which the most spectacularly underwater major pension system in the US. Perhaps one motivator for McConnell is that any allocation of Federal monies to other pension systems could stabilize them a bit, while Kentucky is a goner. It is also ironic that New Jersey, with one of the biggest gaps in terms of the dollars involved, is in its sorry state because Republican Governor Christie Todd Whitman chose to starve it, a decision that was widely criticized at the time.

There is more and less to what McConnell said that one might think. First, his statement got pushback not just from Democrats but even Republican senators and even a bit from Donald Trump, so he might not be able to muster the votes to be as punitive as he’d like. For instance, from a New York Republican:

Second, money is fungible. States and municipalities do appear likely to get some sort of fiscal injection. The way government entities deal with underwater pensions is typically by increasing contribution levels over time. It would seem hard to prohibit various states and cities from continuing their current pension contribution levels even if they include amounts meant to address underfunding. For instance, the CalPERS system consists of 2200 pension plans. CalPERS provides the employers a schedule of payments based on that plan’s membership, terms, funding level, and CalPERS’ return assumptions.

However, McConnell appears intent to assist states and cities only with coronavirus costs, and not address the huge hits their revenues will take from collapsing employment, business failures, and falls in property values. Again from Bloomberg:

Later, on Fox News, McConnell said that any state or local aid must be specifically linked to the pandemic and shouldn’t be viewed as an opportunity for “revenue replacement.”

Honestly, I don’t see how this could be policed once the funds were deployed. In addition, the Administration appears to appreciate that having the country collapse isn’t such a hot idea, even if their idea is to first rescue the well off and treat everyone else as an afterthought.

The third issue, however, is that despite indignant squeals about McConnell’s attack on the virtue, um, solvency, of many public pension plans, the fact is that many are so deeply underwater that they won’t be able to earn their way out of their hole given the certainty of a continued low return environment. Even in the optimistic scenario that asset values recover fully, CalPERS has only gotten as high as 70% funded, and that came about in part due to two mini-bailouts by the state in the form of pre-funding the shortfall. CEO Marcie Frost more recently said CalPERS was about 63% funded, and I suspect she picked a relatively good day on which to have the numbers run. CalSTRS, which has had better investment performance than CalPERS, is nevertheless more underfunded because the legislature has been unwilling to make high enough current contributions. So the war over who gets what will only become bloodier.

There is a bigger philosophical problem: that having investments pay for retirement results in overallocation of resources to societally unproductive secondary market trading and manager fees, and also encourages policies to favor capital over labor, which in the long run hurts growth (assuming no resource constraints, another looming issue). We see what perverse behavior this creates, with public pension funds eagerly investing in private equity….which among other things, slashes employment, hurting the state and municipal revenues which fund pension contributions, and breaking private sector pensions, which makes it harder to justify having them for government workers. The best solution is a vastly more generous Social Security system. But to vary an old Yankee saying, I don’t see how you get there from here.

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63 comments

  1. skippy

    Let me see if I got this straight … private c-corp and elite investors get bailed out whilst public sector investors get brimstone for their moral wantings.

    That inverted totalitarianism term just popped into my head.

    Reply
    1. notabanker

      It really is a disgrace how blatant it has become. Blowback on this is not going to be managed with PR spin.

      Reply
      1. workingclasshero

        Blowback?my guess is that it will be wildly popular with with suburban neo cons with a libertarian streak.were i live,a smaller great plains state,the local paper and t.v. news channels will be gleefull about it.some country!

        Reply
        1. JBird4049

          ‘Till the economic collapse gains even more speed and completeness that is! Great Depression, Part II is one of those events in which such popularity will be embarrassing.

          Reply
  2. Amfortas the hippie

    one might think that with such shameless display of cruelty and disregard for penury and suffering, that a guy like turtle would be easy to beat in an election…and that maybe, barring that, that the senators that elect him leader would have second thoughts about being tied by the feet to such a man.
    wife has a pension…teacher’s retirement in Texas…but we don’t trust that it will be there(if she lives long enough), given that it’s Texas, and is run by the same sort of cruelty and disregard as turtle displays.I have no idea what covid means for that.
    I do not have a pension…people who cook your dinner are not deemed worthy of such largess. I have no idea what covid means for that, either.

    I’ve spent much of my life trying to understand how otherwise, more or less, Good People could be convinced to support this kind of thinking….especially given those same folks’ assertions of Faith in a poor jewish carpenter guy with sort of socialistic tendencies.
    the result of that research and consideration is that much of it was literally engineered…which, in sad commentary, is almost as remarkable an achievement as the moon landings…back when we were still a civilisation.
    I’d like to see Kentucky Polling in about a week…especially if turtle holds firm on his obsession. will it make a dent in his support?
    I’ll also be interested to see how Team Blue gets behind this nonsense…what “Message” will give them sufficient cover?
    I’m sure brock is on it.

    Reply
    1. YankeeFrank

      Turtle isn’t polling well from what I’ve seen. Too bad the other party is so hollow and inept or they’d have an opportunity.

      Reply
    2. Painted Shut

      Maybe he does get voted out. Team Red seems to do this sometimes (Boehner, everyone except Trump in ‘16, etc). Turtle needs to go, for sure. But how about Team Blue and Pelosi, Schumer, Feinstein, Waters, and myriad other feckless entrencheds?

      Reply
      1. John Wright

        I suspect the “Grim Reaper”, not the voters, will term out most of the Team Blue people you list.

        But speaking from California (home of Feinstein and Pelosi), the younger Dems (Kamala Harris) don’t seem better

        However, there is the promising Southern CA Dem Representative Katie Porter, who was enough of a threat to Pelosi’s agenda that she was NOT selected for oversight of CARES money.

        If it were baseball, Team Blue is playing a lot of old “Black Sox” veterans while maintaining a corrupt farm system to provide new players.

        Reply
  3. Mr. Magoo

    Given the performance of the stock market, on the backdrop of a potential depression, shows who really got bailed out.

    As one rarely ever to agree with McConnell, the bulk of the current sad state of these pension funds has more to do with past decisions and not the corona virus.

    I work for myself, and no employees. There ain’t no package for me, nor will there be. Sorry if my ear is a bit deaf.

    Reply
    1. JBird4049

      I understand what you are saying, but this is obeying the divide and conquer strategy of our beloved elites like Mr. Turtle.

      The very state of the economy means that not ensuring functional local governments with their public services and pensions just ensures poverty, sickness, death, and probably civil unrest. Saying that because there is no package for you means that it is fine that there will not be for the non-wealthy is moralizing and since it means children, the elderly, and the disabled will be hurt hard, it is, maybe not sinful, it is cruel, destructive, and being blunt here, narcissistic. Just because someone hit me with a club does not mean I have to let the same someone hit somebody else with the same club.

      Reply
  4. ahimsa

    America: Socialism for the wealthy(capitalists)
    Capitalism for the poor (survival of the fittest)

    Time to repost this:

    ‘Who cares? Let ’em get wiped out’: Stunning CNBC anchor, venture capitalist says let hedge funds fail and save main street (Alternet)

    When Wapner, seemingly incredulous at what he was hearing, asked Palihapitiya why he would support the collapse of large companies, the Social Capital CEO said “this is a lie that’s been purported by Wall Street.”

    “When a company fails, it does not fire their employees, it goes through a packaged bankruptcy,” said Palihapitiya. “If anything what happens is the people who have the pensions inside the companies, the employees of these companies, end up owning more of the company. The people that get wiped out are the speculators that own the unsecured tranches of debt or the folks that own the equity. And by the way, those are the rules of the game. That’s right. These are the people that purport to be the most sophisticated investors in the world. They deserve to get wiped out.”

    “Why does anybody ‘deserve,’ using your word, to get wiped out from a crisis created like this?” replied Wapner.

    “Just be clear, like, who are we talking about?” said Palihapitiya, himself a billionaire. “A hedge fund that serves a bunch of billionaire family offices? Who cares? Let ’em get wiped out. Who cares? They don’t get to summer in the Hamptons? Who cares!”

    Reply
    1. edmondo

      “When a company fails, it does not fire their employees…”

      That should come as news to all those former Toys R Us employees.

      Reply
  5. Shiloh1

    Oh yeah, the virus must have hit Illinois 30 years ago, right…

    It was rigged to blow up from the start in terms of any actuarial components: age to retire, tenure to retire, expected rate of return, contributions, final monthly payout. In addition the fraudulent “sergeant for a day” for cops and lobbyists becoming teachers for a day. No state had more useless $200,000 / year assistant school district superintendents, either, many in single school districts.

    The only thing that the Illinois pension and virus have in common is an exponential function.

    I’ve been completely against the corporate bailouts over the last month – and 12 years ago, too. My letters to Durbin and Duckworth were answered with delightful responses on how they were working hard on the bailouts to “help” me.

    The only good thing is that JB hasn’t gone full gestapo like some other states. I just want to get my kicks in (on the running trails) before the whole d- s- house goes up in flames. If he does a complete lock down then he can find my house keys, unpaid mortgage and unpaid property tax bill on the kitchen table. He can give the house to one of his poor pensioners.

    Does anybody remember who was on the other end of Gov Blago’s infamous FBI bugged phone call, “this f-ing thing (Obama’s vacant U.S. Senate seat to be filled) is golden!”? It was JB. Patrick Fitzgerald and James Comey cut out that part. Illinois is absolutely rotten to the core politically, has been that way at least back to Daley I.

    Reply
  6. Joey

    The oft-stated (@nc) weakness of the Eurozone is that the central potentiality is limited due to regional sovereignty. Deep down, the US has the same design flaw, as the pensions reveal. Odd to see a Kentuckian or Italian take this austerity spokesman role…

    Reply
    1. Billy

      “the central potentiality is limited due to Regional sovereignty”
      What, like printing their own money and being able to affect its value?

      Reply
  7. rd

    The state and local pension fund bailout is about the only thing I agree with McConnell on. One thing about living in NYS with the high taxes is that NY has at least been reasonably prudent with its pensions. So I have zero interest in sending my federal money to places to bailout their pension funds considering they are always laughing at NYS’s high taxes and trying to draw businesses from here by being more “tax friendly”.

    Many of the pension funds for first responders are outrageous where doing a bunch of overtime in one year can give you a $100k+ annual pension. My wife is a teacher in NYS and the formula is a percentage of the average of the highest three years of pay with limits on how much higher those three years can be compared to the two preceding years. Also, only income earned with student contact time counts, so you can’t be gifted some committee jobs to boost your pay. Basically, the system is set-up so that if you work 30-35 years, then the pension plus Social Security give you retirement income roughly equivalent to your regular income towards the end of your career. You would have to work for 50 years for the pension to equal your average final salary. That is a civilized pension system that the school districts have been funding so they are 90%+ funded. Quite transparent and hard to game.

    However, that is a completely separate issue from addressing collapse of revenues from sales and income taxes, as well as user fees that are supporting dedicated bonds such as water systems etc. I completely support providing temporary support to cover missing revenues to provide life support but there should be a caveat that they maintain current contribution levels for their pensions. The unions, politicians, and taxpayers need to sort out their pensions at another time. This may be the wake-up call they need ot stop playing games by pretending everything is good and someobody else will solve it. This isn’t a Republican or Democrat issue. As far as I can tell both parties have states and cities with competent pension systems and both parties have states and cities with pensions that may go bankrupt. Also, the tax levels of the states don’t seem to matter in defining which ones are solvent or not, It just seems to be a matter of priorities.

    Reply
  8. corndog

    Letting states go bankrupt, couldn’t that negatively affect efforts against the virus and cause even more death?

    Reply
    1. Yves Smith Post author

      Yes, firing a lot of state employees and cutting pay isn’t a great way to motivate people to rally and take on a huge challenge, and in many cases, take personal health risk too.

      Reply
  9. rob

    The congress may not be willing to help the states…. .. because ;Why would they?… it isn’t like they are there to help or anything.
    But ,
    I believe I read somewhere that the FED has a “special purpose vehicle” or some such… that will allow municipalities and ? states/bond creating entities… to deal directly with the fed…. in this time of crisis..
    which I guess means with the “bond investment” industry… that interfaces for the fed… the fees.. charges,valuations,etc… get another “customer” pool.
    They get “debt”….so they can cover expenses now… Then all they have to do is pay it all back.. with interest.

    Reply
  10. Edward

    So now McConnell is saying “aid must be specifically linked to the pandemic and shouldn’t be viewed as an opportunity for “revenue replacement.””

    This is after, under the influence of an army of lobbyists, McConnell and Congress passed a trillion dollar giveaway to corporations that had little to do with Covid-19.

    The Republicans seem to be strong on a Soylent Green outcome these days, for both Covid-19 and pension plans. Austerity.

    Reply
  11. Susan the other

    Bankruptcy causes deep cuts to the budget. Much of the debt can be forgiven but the cost for new money goes too high. (It’s possible Mitch is speaking for some of his banking buddies.) And that avenue back to solvency was OK in our previous incarnation. But in today’s brave new world there doesn’t look to be a way to work your way out of a bankruptcy. Yes NYC did it decades ago, or so I’ve heard. But that was still when we had a sort-of-functioning capitalism – or at least the hope of “growing” out of the mess. We don’t have that anymore. Somebody please tell Mitch. And while we’re at it let’s see if we can do something about that moronic meme he is using- “borrowing from the future.” Or oxymoronic at this point. Only insurance policies “borrow from the future”. A loan actually invests in the future. Which is why having, using and needing money should not be punitive. Mitch is really the Church Lady in disguise, no?

    Reply
  12. Susan the other

    I’m not sure where the Federal Reserve ends and the direct “fiscal” bailouts from the Treasury begin. The Fed claims it is not giving money away, instead it is making “loans.” So we see this in the SBA loans that have self-defeating requirements and might be “forgivable”.and other confusing arrangements and restrictions. If the Fed is the vehicle for emergency money going out to the states it can be assumed it is a loan transaction and there will be bank fees and interest payments. Which almost defeat the purpose. We need most of all to have all debt forgiven, and start with a clean slate. Not merely because debt is destructive for an equitable economy – but more acutely because there will never be much opportunity to pay it back. Those days are over. We need direct fiscal spending. I’m not entirely sure where all the “bailout” money comes from – what part of it comes directly from Treasury into fiscal purposes, and what defines a fiscal purpose as opposed to the private purposes (interest and fees) of the Fed and it’s network of private banks? That so many of them are clearly out to make a profit on this is disgusting. And further confusion is created when we start talking about bailouts for states and municipalities. Only states or cities of a certain population threshold quality for what exactly? And if states and municipalities are required to go through bankruptcy won’t that screw up the Fed’s requirements for buying a certain quality of municipal bonds and state bonds? Does the right hand know what the left hand is doing here? It looks like typical congressional incompetence to me.

    Reply
  13. Scubba

    I have put my broker on full alert as to negative changes to my State Bond holdings. This sort of thing can cause a rapid domino effect. It’s not only State workers who need to be vigilante in times like this, the average investor who thinks State Bonds are safe Haven’s can be hurt.

    Reply
    1. Riddler

      If a State uses bankruptcy as a way out its bond obligations, then ask not for whom the bell tolls, it tolls for thee.

      The Raven’s reply remains, Nevermore…

      Reply
  14. Trustee

    Mitch McConnell may not want to “bail” out pensions for nurses, firefighter, emt, police and teachers. After all they tend to be union and vote Democratic.

    However, what about muni and state bond investors? They tend to have higher incomes and vote Republican? They will take a big part of the hit in a state bankruptcy.

    Reply
  15. McWatt

    Illinois pension problems.

    In my town’s village government the pension benificiary’s wrote their own pensions. And they made them generous while making them vest early. Which allowed employees to move to other state local governments and also vest in those pensions. A double bubble. A scam.

    In my town teachers are very well paid. And they seem to be a great community asset. However, the pensions are so generous, at their best 80% of last three years average income, that there is no way that a state pension fund can afford that.

    Since no corporations are paying local taxes the burden falls on local property taxes.

    Reply
  16. Duck1

    To throw a non sequitur on the bonfire, how does FED and Treasury prosecuting a ZIRP financial environment create the prerequisite for any type of pension scheme other than asset stripping and the casino?

    Reply
    1. Amfortas the hippie

      yeah…i remember a time when little old ladies would get a bump in their CD’s and come out to my cafe for salad, a cup of soup and a shared slice of quiche.
      seems like a long, long time ago.

      and, has noone mentioned the switch to “defined contribution”?
      pension promises were always gonna be contingent…like everything else for Us’n’s.

      Reply
  17. LowellHighlander

    What about the National Guard? Who funds their pensions? [My point is that, if it’s the states that fund pensions for retirees of the National Guard, I’d have them front-and-center before the press to show Americans whose pensions McConnell is so eager to cut.]

    Reply
  18. Mikerw0

    I have a quite different take on this. McConnell actually seems to have a pretty impressive track record of staking out an extreme position on an issue so that when the Dems cave he gets what he wants. I think relative the states that is exactly what he is doing. He potentially faces a tough re-election race this fall and will make sure KY gets every dollar they need.

    Also, my admittedly small sample indicates that the neo-libs, deficit hawk, hypocrites have started their full-throated we can’t keep growing the deficit story. After paying off the elites in both tax cuts and a multi trillion dollar bailout I’m not surprised that they will use the deficits as an excuse to go after programs that benefit the middle class and needy. And, if Trump loses in November they are setting the stage to starve the new President of any money to aid the economy to make him fail.

    Reply
  19. David in Santa Cruz

    What tiny fraction of McConnell’s beloved multi-trillion dollar Fed money-cannon would it take to fully fund the state and local pension plans that have been looted by (mostly GOP) under-funding and those high-fee “investment” products being shilled by the same corporate hucksters sucking from the Fed money hose? These people got conned into the hard work of being teachers, cops, and firefighters — how is it OK to hang them out to dry while bailing-out profligate greed-heads? He’s no “conservative” or “Christian” in any way.

    I’m not religious, but I hope that there’s a Hell in which McConnell can spend eternity being flayed and burned.

    But agreed: Where was Team Dem on this? Inventorying Nancy’s ice cream? They could have blocked McConnell, but are just as amoral — while adding spinelessness to the mix.

    Reply
  20. Off The Street

    Obligatory Ben Franklin Quote

    “When the people find that they can vote themselves money that will herald the end of the republic.”

    ― Benjamin Franklin

    Who, whom question is evergreen, and arises again when asking about the voting and the recipient class(es)?

    When one party in power can co-opt the other through joint interest in padding wallets, then that shows trouble. I think of that whenever I see that photo of Richard Burr leaning over to talk to Chuck Schumer, for example.

    Panama Papers, California Prison Guards, small school district administrators, CalPERS board members, add your own examples to that long and growing list. There is a pervasive dishonesty in politics with assemblages that need to be disinfected. Mail-in ballots, the latest shell game proposal, won’t get that job done. /end rant

    Reply
  21. flora

    This only ever comes up when the little people standing in lines finally get to the ‘govt financial help during a crisis’ window and find a “closed” sign on that window…after Wall St. and the big banks have got their’s, no strings attached.

    When it’s the little people’s turn then the moralizing starts. Any excuse to close the window to the little people, the people who can’t hire thousand-dollar-suited-lobbyists to bribe offer considerations to congresspeople.

    Reply
    1. flora

      On the other hand, if Mcconnell wants to cut the ties between pension funds and Wall St. by defunding the states then Wall St loses a huge funding source.

      Reply
  22. sam

    Not to praise the Turtle but public employee pensions (like corporate pensions before future liabilities had to be accounted for) have for years been a shell game of hiding the cost of future promises to buy current services without raising taxes. Here in CA I know a recently retired couple with a combined 45 years of service in CalSTRS who are receiving $140000 annually. A quick online check indicates that an immediate annuity in that amount would cost about $2.5 million. Now multiply that by hundreds of thousands of retired public employees. As noted previously in these comments, teachers are generally not eligible for overtime and the pension rules for teachers do not permit spiking so this is just a very generous system in comparison to most workers who might have a high cost 401K if they are lucky enough to have a full time job at all. Maybe my friends’ compensation is justified and no doubt many CA students benefitted from their 45 years of dedicated service but it’s not clear to me why someone in Texas or Idaho should be asked to pay for that as part of a federal bailout of an underfunded state plan.

    Reply
    1. David in Santa Cruz

      California has always subsidized the rest of the country, while Kentucky gets far more federal money than it pays in taxes. Texas and Idaho wouldn’t necessarily be bailing-out anyone but themselves — especially when you understand that the US Treasury and Fed issue fiat money, and don’t actually rely on revenues.

      https://www.politifact.com/article/2017/feb/14/does-california-give-more-it-gets-dc/

      Pensions are simply investment savings accounts like any other, but with an insurance overlay. The rich keep their bonuses and get bail-outs for their investments. Socialism seems to work quite well for McConnel’s cronies. Why isn’t it “fair” that it work for everyone?

      Reply
      1. flora

        As an example of federations (the US is a federation of states) that don’t work well: Look at the way the EU is tearing itself apart financially by claiming all countries in its federation must abide by its financial rules, but no centralized EU financial help will be forthcoming during this crisis. It’s getting very ugly over there right now.

        Reply
      2. Shiloh1

        “…subsidizes the rest… gets far more federal money than it pays..”

        Ok, I’ll bite. Why is that? Some Kentucky moonshiner calling the shots from a rocker on the front porch with a shotgun in his lap?

        Reply
      3. Anthony G Stegman

        What you say about California “always” subsidizing the rest of the country simply isn’t true. In fact, for most of the 20th century California was a net recipient of federal tax dollars. There would be no California as we all know it had there not been massive federal spending on infrastructure as well as on the military. Subsidizing public pensions in California is a bad idea. And unfair to most of the rest of the country.

        Reply
        1. flora

          Once you start parsing – by “deserving” or “undeserving” states – a general federal dollar sharing or enhancement program, say for highway funds or other, it turns into a political football bringing the whole thing to a halt and no one wins.

          Turtle may use the political carrot of ‘dem state’s pensions are “undeserving”‘ , but included in the states’ bailout is money for states needing a lot more unemployment insurance funding to meet the sudden unexpected surge in unemployment payments which no state can handle with its current UI funding based on the last 5 years. Don’t bite on the “deserving” carrot without looking for the stick beforehand. my 2 cents.

          adding: the feds chose to push thru ui relief through the states, not thru direct payments to workers as in other countries. Now the pols threaten state’s ui added funding? nice.

          Reply
          1. flora

            Adding: Puerto Rico is being both slowly starved and privatized, so this from the linked op Bloomberg article is instructive.
            Divide and conquer!

            The idea has fans, however, including David Skeel, a professor at the University of Pennsylvania’s Carey Law School and a member of Puerto Rico’s financial oversight board.

            “That’s amazing,” Skeel said about McConnell’s comments on possible bankruptcy for states. “This is a pretty strong signal that bankruptcy for states ought to be part of the policy debate.”

            When they show you who they are believe them.

            Reply
          2. flora

            shorter Mitch: we can’t help Penn or OK or Ohio with their unemployment problems because we had to make sure CA didn’t get money.
            _
            Always look for the stick. The stick hits everybody.

            Reply
  23. Louis Fyne

    nothing will change cuz of the culture wars, particularly as neither side will budge.

    Abortion, 2nd amendment, immigration—perfect wedge issues to divide and conquer the bottom 90% Just saying

    Reply
  24. KEVIN

    Apparently, Mitch McConnell & Co. are ok with the fact the Fed is now using the $4.7 trillion that it just created out of the recent “CARES Act” [sic] in its purchasing of “bad debt” to shield banks and wall street from their own bankruptcy or failure; that’s more important to him than the fate of ordinary people who happen to be the ones whose labor and sacrifice provided the value that lead to the great wealth that Congress is protecting through secretive (protected now from FISA-based investigation) Federal Reserve “bailouts.” I suppose he thinks it’s more tragic to see an old billionaire on the street than an ordinary “worker” who gave much of his or her life to a company and expected some return from that particular investment.

    Reply
  25. Synoia

    This makes mu brain hurt.

    If money is given to pensioners (the recipients of pension finds), the money is spent in the economy.

    I think. Please correct me if I’m wrong.

    Isn’t such spending good for the economy?

    My point is, stimulus should go to the poorest sector, and the rich will get their eventual cut. In other words, corporations and the wealthy will have to “do business” or “add value” to get their reward.

    Giving money to the wealthy and corporation appears to encourage “speculation,” which in my limited understanding means “encourage gambling.”

    Reply
    1. rob

      I agree,
      The lines justifying; incentives,tax breaks,bailouts,tailored “special purpose vehicles” ,from the fed… ETC… are always… people ought to just accept that it is “good for the economy”… “their economy”… and so on…
      But really… isn’t our economy driven by something like 75% “consumer demand”… Sounds like the “consumers” ought to be “the point” of it .

      Reply
  26. rob

    before I would argue with anyone as to whether some states are more in need of help , than others.
    Or more ,or less deserving…. because of past good sense and luck, or bad..
    or have a lot of over paid people… or even “gave too many sweetheart deals”
    I would want to know the relative cost of a giant stream of cash going to the states and municipalities coffers….. compared to the giant stream of money,value,debt,etc… going out now… to ? what.. a bunch of rich SOB’s and their publicly traded, liability shields….
    It seems to me that if there was A THOUSAND PILES OF A BILLION DOLLARS EACH.;
    the fifty states, and the territories too… could be made whole.
    And that is just half of the tax cut… last time.. it is just half of the corporate give away , this time…

    So before I start an argument as to portion size… I want to know the relative size of the crumb. And if the states are really only in need of “crumbs”… I would rather every person who had a job and a good pension plan… get what they thought was coming…
    Now if it was something like the 16 trillion dollars the fed made up and put on the books of corporations right after the 2008 crash… or something serious… then I would need to re-think this whole thing.

    Reply
  27. I want $, so give me $ - logical

    Yes, sure, let the Fed run trillions in deficits and bail out every state, muni and person, the more in debt you have the more you get, the more lobbyists you hire the more you get — great policy folks

    Reply
    1. flora

      Hudson’s debt jubilee idea is apparently fine for Wall St, per the bailouts and QE, according to our pols. It’s not fine for regular people, though, according to our pols. Seems fair. (not)

      Reply
    2. rob

      The “fed” is in the “making money “business.
      The more they make…. the more they make.
      The point you seem to be missing.. is they are making debt. and have been for 100 years.. without bailing out the “people”… It is the “corporations” who get the benefit.Wall street bankers making money for wall street speculators. who give that money to wall street corporations selling the goods.. and the people get the debt.
      If the people do get some of this… it won’t be too large a slice of the corporate pie.
      But if you are concerned about “debt”,
      I would look at the money creation for debt model of the federal reserve… that is THE long term liability to the american people.
      The USA doesn’t have to create debt ,in the first place…. to create “us dollars”. but it does because of the federal reserve act. That is the detail in your debt devil.

      Reply
  28. Susan Mulloy

    Your solution to our public pension problems is simple and profound: vastly improved Social Security benefits. Do you see anyway of getting there from here?

    Reply
  29. Tomonthebeach

    The disgusting thing about government pension funds is that technically, at least, if not outright written in law, civil service and military pensions are supported by employee contributions AND are considered delayed compensation. Thus, a city or state cannot declare bankruptcy and walk away from its pension obligations in the same way the PE takeovers do when they loot private companies. Pensions are monies owed which the employer could have invested and supported payouts via dividends or equity liquidations (like modern IRAs).

    Of course, old Turtleface continues the GOP BS of putting the burden on future generations, as if our offspring will somehow live in poverty so the elderly may eat and have shelter. Shameless.

    Reply
  30. Bill Carson

    What makes McConnell’s position particularly cruel is that in several states public employees do not participate in Social Security. I know that in Texas and Colorado public school teachers do not pay into Social Security—they only pay into their state retirement system. If their pension systems go bust, then retired teachers are screwed.

    Reply
  31. Ep3

    In Michigan, a lot of these pensions are for Police & Firefighters who DO NOT pay into social security. Why don’t they?
    Is Mitch the B—ch really gonna take on P&F?

    Reply
    1. Off The Street

      Civil Service Retirement System, or variants, for many government employees here and there, perhaps in your jurisdiction, too.

      Reply

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