Ex-Fed Advisor: Looming Pension Catastrophe Makes It “Hard To Sleep At Night”

Wednesday, December 14, 2016
By Paul Martin

Birch Gold Group
Tuesday, 13 December 2016

Of all the troubling economic issues in the United States today, the current crisis erupting from mismanaged public pension programs stands out as a uniquely menacing threat to Americans’ financial security. Five major cities have filed bankruptcy over pension woes since 2008, and dozens more are teetering on the brink.

Faced with massive budget shortfalls, a rapidly increasing number of beneficiaries, and stagnant rates of return, federal and state pension funds around the country are near their tipping point.

Ex-Federal Reserve advisor Danielle DiMartino Booth warns:

…the idea that we can escape what’s to come, given demographically what we’re staring at is naive at best. And it’s reckless at worst. And when you throw private equity and all of the dry powder that they have — that they’re sitting on — still waiting to deploy on pensions’ behalf, at really egregious valuations, yeah, it’s hard to sleep at night.

But when it all comes crashing down, pension holders won’t be the only ones who suffer.

Trouble in Dallas Proves the Problem with Pensions

The most recent example of our nationwide pension crisis comes from Dallas, Texas. After years of negligent decisions and questionable accounting, the Dallas Police and Fire Pension Fund is poised to bankrupt the city. To make matters worse, retirees are frantically cashing out, so much so that the mayor just filed a lawsuit to stop them.

Unfortunately, the Dallas pension debacle is far from an isolated incident.

Mary Walsh of the New York Times writes:

What is happening in Dallas is an extreme example of what’s happening in many other places around the country. Elected officials promised workers solid pensions years ago, on the basis of wishful thinking rather than realistic expectations.

The Rest…HERE

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