If you find yourself not facing foreclosure (yet), and wonder why your pension is tanking, read the report below. You see, the same criminals that stole everyone’s homes, equity, life savings, etc from people facing foreclosure, stole your money too…
The turmoil this country, actually the world is facing right now, all ties directly back to the financial games that Wall Street played with all of us. They want to make you believe it was the “deadbeat borrower” that caused all this but it is a lie, a distraction.
Once you realize that this was the largest Ponzi Scheme perpetrated on a global scale, to take every bit of wealth from the population, you will become angry too.
Hopefully, you will realize it before it is too late and stand up a do something about it…
From the report…
The Origins and Severity of the Public Pension Crisis
The major reason that shortfalls exist at all was the downturn in the stock market following the collapse of the housing bubble, not inadequate contributions to pension funds.
It is important to recognize that the main contributor to the current funding problem facing public pension funds was the collapse of the housing bubble and the subsequent downturn in the economy and the stock market. The plunge in the stock market led to a sharp decline in the value of pension fund assets.
Figure 1 below projects pension fund assets if pensions had continued to earn on average a 4.5 percent nominal rate of return in the period since the end of 2007. Under this assumption, state and local pension fund assets would have been $857 billion higher at the end of the third quarter of 2010.
The economic fallout from the collapse of the housing bubble has also led to budget shortfalls in state and local governments across the country. One result of these shortfalls is that governments reduced payments in pension funds. In the period since the beginning of the recession, annual payments into state and local pension funds have averaged $6.9 billion less than withdrawals. By contrast, in the three years prior to the downturn, payments averaged $18.4 billion more than withdrawals. If state and local governments had continued to contribute to their pensions at the same rate as they had in the prior three years, then the total assets of these funds would be $77 billion higher than was reported at the end of the third quarter of 2010. Adding this to the $857 billion figure above results in an additional $934 billion in pension funds, a figure far higher than most estimates of the size of state and local government shortfalls.
While state and local government pensions should be funded at levels that allow them to weather the impact of cyclical downturns, it is important to recognize that the current downturn is by far the longest and deepest of the post-war period. The managers of these funds obviously failed to recognize the housing bubble and the dangers it posed to the economy, but this was true of the vast majority of economic and business analysts at the time. Certainly state and local pension funds were not well served by the professional managers who advised them. It might be reasonable to ask why financial experts, who were often highly compensated for their services, failed to see such an obvious threat to the economy and the stock market as the collapse of a housing bubble.
However, this is an issue of the failings of the financial industry, not the failings of state and local governments, except insofar as they exercised poor judgment in buying the industry’s services.
Full report below…