The U.S. public pension gap has tripled to at least $2 trillion in less than a decade, Moody’s Investors Service said in a report on Thursday.
Moody’s measured the unfunded liabilities for the 25 biggest public retirement systems between 2004 and 2012. The total future shortfall is more than half the size of the $3.7 trillion municipal bond market, which comprises all the outstanding debt issued by U.S. states and cities.
The gap has widened in spite of the fact that average investment returns over about the same period were 7.45 percent, roughly in line with targets, according to the Wall Street credit rating agency.
“Part of the problem for the level of overall funding is that it is inherently difficult to recover an overall asset position after the double-digit losses seen during the recession,” Al Medioli, a Moody’s vice president, said in a statement.
In fiscal years 2008 and 2009, at the depth of the economic downturn, the plans’ assets dropped nearly 22 percent cumulatively on average, Moody’s said.
Other contributing factors include inadequate contributions from plan sponsors and the burden of an aging population across the country. …
Since the 2008 crash was a deliberate false flag, and pension “sponsors” “inadequate contributions” were supposed to equal the deductions they withheld from retiree’s paychecks over the course of their careers, this entire “shortfall” has been stolen outright.
And what about the social security trust fund?
Here’s how President Barack Obama answered CBS’s Scott Pelley’s question about whether he could guarantee that Social Security checks would go out on August 3, the day after the government is supposed to reach its debt limit: “I cannot guarantee that those checks [he included veterans and the disabled, in addition to Social Security] go out on August 3rd if we haven’t resolved this issue. Because there may simply not be the money in the coffers to do it.”
And Treasury Secretary Timothy Geithner echoed the president on CBS’s Face the Nation Sunday implying that if a budget deal isn’t reached by August 2, seniors might not get their Social Security checks.
Well, either Obama and Geithner are lying to us now, or they and all defenders of the Social Security status quo have been lying to us for decades. It must be one or the other.
Here’s why: Social Security has a trust fund, and that trust fund is supposed to have $2.6 trillion in it, according to the Social Security trustees. If there are real assets in the trust fund, then Social Security can mail the checks, regardless of what Congress does about the debt limit.
President Obama’s budget director, Jack Lew, explained all this last February in USA Today:
“Social Security benefits are entirely self-financing. They are paid for with payroll taxes collected from workers and their employers throughout their careers. These taxes are placed in a trust fund dedicated to paying benefits owed to current and future beneficiaries. … Even though Social Security began collecting less in taxes than it paid in benefits in 2010, the trust fund will continue to accrue interest and grow until 2025, and will have adequate resources to pay full benefits for the next 26 years.”
Notice that Lew said nothing about raising the debt ceiling, which was already looming, and it shouldn’t matter anyway because Social Security is “entirely self-financing” and off budget. What could be clearer?
Unconvinced, syndicated columnist Charles Krauthammer wrote a subsequent column questioning Lew’s assertions. “This [Lew’s] claim is a breathtaking fraud. The pretense is that a flush trust fund will pay retirees for the next 26 years. Lovely, except for one thing: The Social Security trust fund is a fiction. … In other words, the Social Security trust fund contains—nothing.”
Social Security status-quo defenders have assured us for the past 25 years that Social Security is fully funded—for the next 25 years, or 2036. So if there are real assets in the Social Security Trust Fund—$2.6 trillion allegedly—then how could failure to reach a debt-ceiling agreement possibly threaten seniors’ Social Security checks?
The answer is that the federal government has borrowed all of that trust fund money and spent it, exactly as Krauthammer asserted. And the only way the trust fund can get some cash to pay Social Security benefits is if the federal government draws it from general revenues or borrows the money—which, of course, it can’t do because of the debt ceiling. …
Of course even this is just a drop in the bucket:
By the way, the pentagon accounting office charged with tracking down the “missing” $3.4T happened to occupy the side of the pentagon that was apparently hit by a missle on 9/11. Similarly, the WTC7 building that magically collapsed into its own footprint at freefall acceleration on the same day happened to contain the SEC’s only copies (allegedly) of the files dealing with the worldcom and enron investigations. The 9/11 event killed a number of birds with one stone. And why not? If you can impose “random” disasters with impunity you can certainly arrange for those disasters to accomplish multiple things.
We’ve been sold down the river, and it’s self-evident that the gods of money don’t intend to just skip town when the sh*t hits the fan. They have every intention of maintaining control and in all likelihood they have concrete plans for how to do so. This is what the decades-long militarization of the police is all about. But don’t take my word for it, see
and draw your own conclusions.