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By 2014 the city of Los Angeles will go belly up, in great part due to the one third of all revenues that will go to the pension system instead of buying basic government services.
"More and more states and local governments are finding their pension plans eating into their budgets, a problem that first slapped the city of San Diego years ago. San Diego's difficulty in cutting costs -- $2 billion remains unfunded -- shows how hard everyone else might find it, too.
The answer is the U.S. government, said former Los Angeles Mayor Richard Riordan and Alexander Rubalcava, the president of an investment advisory firm. The two wrote an op-ed in The New York Times this week arguing for a federal bailout of local pension funds, but not by just cutting checks.
Instead, borrowing a page from the Education Department's Race for the Top initiative, which provides money to states that propose significant reforms for their public school systems, it should strike a grand bargain with city and state pension funds: in exchange for capping their liabilities and adopting better management practices, they could cover their costs through tax-free, federally guaranteed securities."
This may be well intentioned--but a disaster for the taxpayers in Wichita, Dover and Orlando. Why bankrupt them because California political hacks, owned by the unions, are corrupt and use pensions to buy votes.
So called tax free Federal securities are NOT free. They mean less revenue for the federal government, which raises the deficit and debt.
Not a good idea. Let California figure it out--even if it defaults--why force others to pay for our mistakes and corruption?
More...
"More and more states and local governments are finding their pension plans eating into their budgets, a problem that first slapped the city of San Diego years ago. San Diego's difficulty in cutting costs -- $2 billion remains unfunded -- shows how hard everyone else might find it, too.
The answer is the U.S. government, said former Los Angeles Mayor Richard Riordan and Alexander Rubalcava, the president of an investment advisory firm. The two wrote an op-ed in The New York Times this week arguing for a federal bailout of local pension funds, but not by just cutting checks.
Instead, borrowing a page from the Education Department's Race for the Top initiative, which provides money to states that propose significant reforms for their public school systems, it should strike a grand bargain with city and state pension funds: in exchange for capping their liabilities and adopting better management practices, they could cover their costs through tax-free, federally guaranteed securities."
This may be well intentioned--but a disaster for the taxpayers in Wichita, Dover and Orlando. Why bankrupt them because California political hacks, owned by the unions, are corrupt and use pensions to buy votes.
So called tax free Federal securities are NOT free. They mean less revenue for the federal government, which raises the deficit and debt.
Not a good idea. Let California figure it out--even if it defaults--why force others to pay for our mistakes and corruption?
More...