An Unsolvable Math Problem: Public Pensions Are Underfunded By As Much As $8 Trillion - The corrupt politicians FUCK YOU ALL
Defined Benefit Pension Plans are, in many cases, a ponzi scheme.
Current assets are used to pay current claims in full in spite of insufficient funding to pay future liabilities... classic Ponzi. But unlike wall street and corporate ponzi schemes no one goes to jail here because the establishment is complicit. Everyone from government officials to union bosses are incentivized to maintain the status quo...public employees get to sleep better at night thinking they have a "retirement plan," public legislators get to be re-elected by union membership while pretending their states are solvent and union bosses get to keep their jobs while hiding the truth from employees.
We even published a note several days ago entitled "Establishment Tries To Suppress "Dissident Actuaries" Explosive Report On Public Pensions," which pointed out that the American Academy of Actuaries and the Society of Actuarieskilled a report that would have warned about the implications of lowering long-term expected returns on pension assets. Apparently the truth was just too scary.
Bill Gross has been warning of the unintended consequences of low interest rates for years, and reiterated his concerns to Bloomberg recently:
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