Please define <<criminal>> ...
market-ticker.org
Posted 2012-02-28 09:26
by Karl Denninger
in States
State Pension Fund Managers Must Be IMPRISONED
This sort of behavior ought to earn a long stay in prison -- not continued employment:
ALBANY — When New York State officials agreed to allow local governments to use an unusual borrowing plan to put off a portion of their pension obligations, fiscal watchdogs scoffed at the arrangement, calling it irresponsible and unwise.
And now, their fears are being realized: cities throughout the state, wealthy towns such as Southampton and East Hampton, counties like Nassau and Suffolk, and other public employers like the Westchester Medical Center and the New York Public Library are all managing their rising pension bills by borrowing from the very same $140 billion pension fund to which they owe money.
That's utter and complete crap.
It is identical to taking a $20 out of your left pocket, putting it in your right, and claiming you've increased your net financial position by +$20.
You have not. The claim is a bald lie.
How the actuaries and other financial watchdogs allow this is beyond me.
This is a fraud upon the public, a fraud upon the pensioners, and a fraud upon the workers who are being promised those pensions. It is a scam; you cannot borrow from yourself and claim you have somehow improved your own lot, as you've done no such thing -- you have simply moved money from one bucket to another.
When this sort of scam becomes commonplace you know that the end of the line is near -- this is such a blatant rip-off that nobody in their right mind would attempt it unless they were literally at the end of their rope. By borrowing from the very fund that you're allegedly funding you are, in each and every instance, destroying the already-accumulated surplus that is already pledged to pay other people!
Public pensions are one of the points I cover in depth in Leverage, as there's no possible way for the promises that have been made to be kept.
This is not about what we want to do -- it is about what's possible, and we must tell current and future retirees the truth about the promises made and what we will actually be able to sustain -- two entirely-different things. |
