Monday, June 13, 2011

Cities Are Confiscating Pensions

What? You thought this was your money -
A small town in Alabama, which has stopped paying its retirees' pensions, could be an early casualty in a coming pension disaster, the New York Times reports.

As public pension funds across the nation suffer from years of underfunding, and from assets that lost value in the financial crisis, experts say that days of reckoning are fast approaching. In Prichard, Alabama, that day came last year: When the fund ran out of money, the city stopped paying retirees, the NYT reports. Retirees have sued, but to little avail. The money simply does not exist.

Without pension checks, 11 retirees have died, according to the NYT. Others have declared personal bankruptcy. The rest of the 150 retired workers are struggling to get by.
The Real Effect
I want everyone to think long and hard about the implications of this story. What little tidbits can we glean -
  • While not stated overtly, it is implied that the city did not fund the entirety of the pension fund. It probably used general funds to drive it.
  • The city is breaking State law to not pay the retirees. Hello? Handcuffs anyone?
    • "In the years leading up to the financial crisis, many cities delayed funding their pensions, as assets were seeing high returns and governments expected good times to last."
  • The city will undoubtedly cry a river publicly about "failing" the retirees, but don't expect any sort of discourse let alone cooperation on how to solve the problem. Nope, we must double down.
  • By not requiring 100% backing on "owed" funds, this is how we end up with these messes.
  • The State itself is broke and will not help, much.
  • Socialism, communism, crony-capitalism, fascism are birds of a feather and all tend to operate in the same manner. Fraudulently.
This brings to mind a scene in the movie Titanic. When the ship is sinking (I know, spoilers) the ship's captain has the lower class locked to the bowels of the ship, to facilitate order while the rich stake out their own personal lifeboats. At one point, a trapped member pleads with one of the crew, 'There are women and children down here.' only to have the desperate request fall on deaf ears. I'm sure, he was only doing his job.

That is the unfortunate reality of these things. The elite will doom members of the lower classes to death in the name of 'everything is justified under the sun' just to ensure that they do not so much as suffer a scratch on their entitled little heads. They will not warn you, they will not help. As a matter of fact, they will assure you that everything is wonderful right before they lock you in the bowels of the ship and let nature take it's course. Surplus population and all that.

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