May Top $1 Trillion

[Tempest]

The bank bailout? The automaker bailout? Nope. The State Unfunded Pension and Benefit Liabilities bailout!

 Quote:

In August, JP Morgan released a preliminary estimate projecting the present value of unfunded government employee health care and other non-pension benefits at between $600 billion and $1.3 trillion. In mid-October Chris Edwards, director of tax policy at the Cato Institute, released a report putting the number at $1.4 trillion.

 Quote:

In April 2006 the Rockefeller Institute of Government issued "Retiree Pensions and Health Care Benefits: State and Local Governments Face New Budget Challenges," which said the unfunded liability of health care costs for retirees may be greater than the unfunded liability for pension benefits. The report used as an example the state of Maryland, which shows an unfunded liability of $4.6 billion for pensions but a staggering $23 billion for retiree health care.

http://www.heartland.org/publications/budget%20tax/article.html?articleid=20235 Backed up by this older article:

 Quote:

Nationwide, the payment shortfall is reported at $278 billion for just the largest state and local pension funds. Illinois alone has $39 billion in unfunded obligations, Ohio $30 billion and Michigan and Massachusetts $15 billion each. Scores of cities have unfunded shortfalls -- $1.4 billion in San Diego, for example. Barclays Global Investors sets the national state-local total at close to $700 billion.

And my favorite paragraph:

 Quote:

Why have states and localities acted so foolishly? Political expediency. Elected to four- or two-year terms, the immediate pressures on city council members and state legislators are to cut or not raise taxes, to fund popular programs, and to make concessions to government workers and their unions that don’t require immediate budget outlays. Postponing payments into pension funds, even sweetening future benefits, is a stealthy form of unannounced borrowing -- and a course of least resistance.

http://www.stateline.org/live/details/story?contentId=102283 Since the CEOs of the automakers are getting slammed for their "poor leadership"...let the slamming of state and local politicians begin! Like that's gonna' happen. The government is here to help us right?? Do we really want these people "solving" our financial problems??

 

[Shannow]

That's an NPV of future spending rolled into today's dollars. Unlike the $10T of todays dollars that aren't there at the present time.

 

[bullwinkle]

That's NOTHING compared to the Social Security, Medicare, & Medicaid outlays for the next 50 years!!

 

[Tempest]

 Originally Posted By: bullwinkle

That's NOTHING compared to the Social Security, Medicare, & Medicaid outlays for the next 50 years!!

Yep, fully agree. Just another example of political expediency at work (and our future tax rates ).

 

[Cutehumor]

Medicare will go bankrupt in 15 years.

 

[Steve S]

The sloptrough of the tax payer is bottomless

 

[Drew99GT]

If we weren't spending $10 billion a month on something else, these problems would be a little more manageable, eh!

 

[ToyotaNSaturn]

I think the running tally is 4.6 Trillion now.

 

[VeeDubb]

And the raping of our children continues. They get to pay for us living beyond our means.

 

[oilyriser]

You cannot borrow from the future.

 

[Cutehumor]

My parents aren't leaving anything to me. My dad always told me growing up, you can't take money with you when you die, so he spends it all with 3 bankruptcies, a foreclosure, and two repos to his name. My ole man is 64 yrs old.

 

[Gary Allan]

 Originally Posted By: oilyriser

You cannot borrow from the future.

I respectfully disagree. That's how (the other guy) did it That's how (another guy) did it. ..and it's turned into a disaster so far.

 

[VeeDubb]

 Originally Posted By: oilyriser

You cannot borrow from the future.

call it what you want. The point is, future generations are screwed.

 

[oilyriser]

Borrowing creates scarcity now, in the hopes that there will be less scarcity in the future. What you can do is neglect things now, which creates problems for the future. Eg. stop having children today, so you have more money left over for economic expansion for a few decades. Stop repairing roads, so you can build more cars and keep more people busy for a little while until there are no roads to drive on. Build cheap homes to create jobs, and worry about running out of natural gas to heat them when the problem comes, in the future. Then you are really screwed, and don't even have any present value to borrow from.

 

[Shannow]

Problem is that every raw material is going to be harder to source in the future. All of the copper lying on the ground has been found, the high yield ores have been used, and we are running ever closer to the smell of an oily rag. Exponential growth, finite resouces. And we've been spending tomorrow's money like a man with 10 arms, but on junk, not on infrastructure.."if it was worth building, private industry would have done it", we keep hearing My own state is all but bankrupt, having received (and therefore spent) more than ever before, and with infrastructure falling to pieces... repayment of debt means that they don't build stuff today, because they borrowed yesterday for instant gratification. How can the US spend it's (and the world's) way out of the crisis when the lack of intention to pay the debt seems to be a major part of getting here in the first place ? (And I've heard the sentiment here on BITOG a number of times "If they will take pieces of paper for tangible goods, then they are suckers) Someday, somebody pays.

 

[Al]

 Originally Posted By: VeeDubb

call it what you want. The point is, future generations are screwed.

Believe me.its not going to go that far. Armageddon will hit us. I'm not sure there will be future generations.

 

[VeeDubb]

 Originally Posted By: oilyriser

Borrowing creates scarcity now, in the hopes that there will be less scarcity in the future. What you can do is neglect things now, which creates problems for the future. Eg. stop having children today, so you have more money left over for economic expansion for a few decades. Stop repairing roads, so you can build more cars and keep more people busy for a little while until there are no roads to drive on. Build cheap homes to create jobs, and worry about running out of natural gas to heat them when the problem comes, in the future. Then you are really screwed, and don't even have any present value to borrow from.

Right. The problem is that only a puny fraction of this bailout is going into investments in the future. Most of it is to pay for toys that have already hit the junkyard or McMansions that should have never been built. It's not hard. If I max out my credit card to buy a big screen TV and gameboy, I'm not exactly investing in my future. Al, unfortunately, you could be right. However I HOPE the present generation takes it in the rear. The wastrel should be the one that pays.

 

[Gary Allan]

 Quote:

And we've been spending tomorrow's money like a man with 10 arms, but on junk, not on infrastructure.."if it was worth building, private industry would have done it", we keep hearing My own state is all but bankrupt, having received (and therefore spent) more than ever before, and with infrastructure falling to pieces... repayment of debt means that they don't build stuff today, because they borrowed yesterday for instant gratification. How can the US spend it's (and the world's) way out of the crisis when the lack of intention to pay the debt seems to be a major part of getting here in the first place ?

I keep seeing the recurring vision of a scene from a Monty Python skit where John Cleese was an architect hired to design some public entrance hall for Eric Idle (iirc) ..anyway Cleese described how the main hall way would lead to a chute that would go through rotating blades and right into a rendering/disposal plant. Idle paused for a moment and said "Well, that's not quite what we had in mind". Why would you do this? I'm absolutely certain that we've moved Pb out of the plumbing long enough ago that sound minds should be a given. That is, one would not do this ..regardless of the short term benefits ..unless the short term benefits had the intent of sending your species into Dystopian misery in the most efficient manner.

 

[buster]

http://www.youtube.com/watch?v=3qsJjTaekA8 End the Fed?

 

[Gary Allan]

There are no solutions, buster. Just exchanges of problems. I don't care how you mix it up, without changing the basic human condition there's just no "good" way to change things around. The elimination of the Fed would just reconfigure the shakedown by closing one door. True free floating/free market governors will just unleash the motivators in another way. Those who gain DO NOT CARE about the consequences. When a solution arrives ..they then go to task to capitalize on it and subverting its intent. This sorta, in a manner, lends credence to Tempest's Natural Law leanings. That is, why bother trying to juggle all this stuff in an attempt to make it work ..when you're outgunned by the basic primal nature of the species. Any impressions otherwise all appear to be delusions of grandeur in terms of morality and civility. Now if you start shooting people who hurt the vitality of the nation for personal gain, that might work. That could fall under Natural Law. It's what I'd do to someone destroying my home with anti-social behaviors. Consider it a more draconian version of Belushi's stairway deal with the guitar. I guess we could start with guitars. When a spin doctor starts talking ..as soon as the beee-s meter twitches ..you smash a guitar over his head. Then when they ban guitars ..you move to more ranged weaponry. Mangos ..tomatoes .. spaghetti (w/sauce) Thwap!