Booms, Busts, and Recoveries Message Board

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Strategies & Market Trends : Booms, Busts, and Recoveries

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To: Maurice Winn who wrote (72902)	3/18/2010 5:44:03 AM
From: Snowshoe	Read Replies (1) of 74559

>>the good answer is to default on government debts<< Mq, it's not that simple because most government agencies have valuable assets in the form of land, buildings, future tax receipts, etc. If the state government doesn't pay its pension obligations, the pensioners can go to court and sue. It's pretty hard for a government to default on pension debts unless it files for bankruptcy, which has all sorts of serious ramifications like paying higher interest rates for borrowed money. My own state faced its burgeoning pension problem by creating multiple tiers of employees based on their initial hire date. The new employees hired after these cutoff dates are promised lower retirements at the time of their initial hire. They are up to four tiers now, and I've been around long enough to have first dibs at the trough. >>There's no reason youngsters just starting work now should pay for debts incurred by those who went before.<< Oh sure there is! The court judges, legislators, and their staffs here are all beneficiaries of the same pension system, so they're highly motivated to see that the promised obligations are paid! :0)

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