Special Series: Broke Municipalities Look to Bankruptcy Option

Editor’s Note: This is the second in a CalWatchDog.com Special Series of 12 in-depth articles on municipal bankruptcy.

MARCH 9, 2012

By STEVEN GREENHUT

Economist Allan Meltzer once quipped that “Capitalism without failure is like religion without sin. It doesn’t work.” Americans have been witnessing this axiom on a broad scale, as government efforts to prop up industries, bail out the financial sector and protect select private businesses from failure have only caused a prolonged financial crisis. Without failure, there is no day of reckoning and no effort by the failed party to make the fundamental changes needed to avert future crises.

Ultimately, there’s only so much bailout money to go around, and private businesses that make bad decisions, offer uncompetitive products or services or are run inefficiently ultimately go belly up or restructure their debt. Americans accept that bankruptcy is a necessary part of the market system. We want to see those poor-performing businesses change or shutter their doors. New competitors will spring up and, in the end, the public is generally better served when companies can fail rather than get bailed out.

The problem in the public sector is that government never is allowed to fail. There never is a day of reckoning no matter how poorly a government agency may provide its so-called services. Because there are no real customers in the government world, there’s never any hell to pay when the public is mistreated, when resources are wasted and when incompetents enrich themselves in the name of serving the public. Often, the worst agencies are rewarded for their failure by being granted additional public dollars. There never is actual failure.

Reform Plans

For decades, I’ve been hearing about reform plans for any number of government agencies. Think of the Los Angeles Unified School District, the poster child for mis-educating students and squandering public resources. Nothing ever changes there because the system cannot fail. It is propped up by government funding.

Our federal government does many things, almost all of them poorly and wastefully, yet our government prints as much money as it needs to pay for this. There is no failure, no day of reckoning. The federal government’s debt has soared above $15 trillion, but there is no chance of capitalist-like failure for the national government.

But it’s a different story at the state and municipal level. State governments and localities cannot print money. They must, at least theoretically, balance their books. Yet many state governments such asC alifornia struggle with endless budget deficits. Unfunded liabilities to pay for pension promises for state and local public employees hit an estimated $3 trillion nationwide. Then there are the debts for the health-care promises that municipalities have made to their employees. Much of this is not honestly accounted for, so the real numbers are worse than the official ones.

De Facto Bankruptcy

As Orange County, Calif., Supervisor and former Treasurer John Moorlach has pointed out, California is in de facto bankruptcy. States are not allowed technically to go bankrupt under current federal law, but some of them — California most notably — are basically insolvent. They spend more money than they take in. California’s officials play games with the budget every year to mask that debt, but it is there no matter how artfully legislators and governors shift around funds and paper over their ongoing debt spending.

Municipalities can go bankrupt and some of them — Harrisburg,Pa., Central Falls, R.I., Vallejo, Calif. — have actually gone bankrupt or tried to do so. In the San Francisco Bay Area,Vallejois a union-dominated city that ended up spending 80 percent of its budget on pay and benefit packages for city workers, primarily police and firefighters. In Vallejo, one police captain earned a compensation package of $300,000 and average firefighter compensation is in the $175,000 a year range. At a certain point, cities that spend that way end up insolvent and bankruptcy becomes one of the few options available.

It’s one of the only ways to impose failure on a public entity. Governments are the ultimate example of Meltzer’s maxim. They spend. They make foolhardy decisions. They make outrageous promises to the public employee unions that have so much political power in state capitols and city halls. When there’s no money left, officials play games with the numbers or — as California Gov. Jerry Brown continues to do — make their main objective raising taxes. Of course, raising taxes is only a temporary fix. Short of the threat of failure, the same politicians who created the current mess will continue to spend money in the same old ways. They only buy themselves time and tax hikes can actually reduce tax revenues, as the supply side economists have shown.

Union Critics

The main critics of the bankruptcy option are the unions. They know that bankruptcy would enable cities and possibly states to abrogate these unaffordable contracts. I saw it many times while covering local government. Unions would promise that the new pension formula — usually granted retroactively — would not cost city governments anything. But their economic projections were always overly rosy, and before long the unfunded liabilities would soar.

But the courts in California have ruled repeatedly that once an elected body grants a pension increase, there is no reducing the benefit for the 30-year life of the contract. The California Supreme Court ruled in November 2011 that not only are vested benefits such as pensions, which were granted contractually, off-limits from any tinkering, but non-contractual and non-vested benefits such as retiree health care also can carry the weight of a contract. By unanimous vote, the court found an implied contract and made it that much more difficult for localities in this state to address budgetary problems. There are fewer and fewer options.

The public-employee unions championed a bill, signed into law by Gov. Jerry Brown in October 2011, that makes municipal bankruptcy more cumbersome by forcing localities to get approval for such actions by additional committees. It’s not a ban on such bankruptcies, but it makes it harder for cities to use this option. But it’s not just the unions that are opposed to the concept of government bankruptcy.

Bond Markets

Some conservative intellectuals, concerned about the impact of bankruptcy on bond markets, have been campaigning against this idea. This debate started in January after former Florida Gov. Jeb Bush and former U.S. House Speaker Newt Gingrich made this argument in a Los Angeles Times op-ed titled, “Better Off Bankrupt”:

“The figures for next year’s budgets are staggering. California, which faces a $25.4-billion budget shortfall, will pay $100,000-plus pensions to more than 12,000 state and municipal retirees this year. A Stanford study puts the state’s unfunded pension obligations at more than half a trillion dollars.Illinoishas a $15-billion budget deficit, prompting its governor and lame-duck Legislature to hike its personal income tax rate by 66 percent.New York, where 73 percent of the government workforce is unionized, is staring at a $10-billion deficit.

“There has been an organized federal bankruptcy process for municipalities since the 1930s, and a handful of cities, towns and counties – most notably California’s Orange County in 1994 – have gone through municipal bankruptcy and gotten their fiscal houses back in working order. A bankruptcy option for the states would look very similar to Chapter 9 municipal bankruptcy, with some necessary modifications.”

The Manhattan Institute’s E.J. McMahon disagreed. He argued in the Wall Street Journal that, “Such an option would certainly rattle the bond market — which bankruptcy proponents see as a good thing. Yet this ignores the potential for collateral damage and disruption. While bond spreads might get wider for the most troubled states, the enactment of a state bankruptcy law is likely to raise the cost of borrowing for all municipal issuers.”

Granted, McMahon is dealing here with the prospect of state bankruptcy, rather than the municipal bankruptcies that are the subject of this series. As such, he is right to point out that most of the state spending problems come from educational spending and Medicaid transfer payments, not pension obligations, which are local obligations. But many of his points are meant to apply to municipal bankruptcy as well. He argues that “officials committed to cutting costs already have options for putting the squeeze on their unions.”

Unused Tools

Unfortunately, while officials indeed have those tools, they generally are unwilling to use them. Expecting state and local officials, who in California and other states with the biggest problems tend to be union-supporting Democrats, to take on the unions that elected them to office is unrealistic. It’s not going to happen easily and the threat of bankruptcy at the very least could force these unions and officials to embrace the needed tough medicine.

Critics of bankruptcy like to point to the results of the Vallejobankruptcy as an example of why municipal bankruptcy is no panacea. I wrote in March 2010 in City Journal, “Though the city eventually voted to reduce firefighter pensions for new hires and to require a larger pension contribution by firefighters, it did not touch existing pensions or pensions for police officers.Vallejo’s avoidance of the pension issue makes it less likely that other cities could declare bankruptcy and then easily dispose of their burdensome pension promises.” Since then, the city has emerged from bankruptcy and has cut benefits mostly moving forward. The city did cut back salaries and slash its retiree health-care debt, but it fell far short of ditching its enormous benefit obligations.

Bondholders’ Losses

Wrote Nicole Gelinas in City Journal:

“Bondholders should realize, then, that they are vulnerable to real losses as cities, towns, and states move to escape massive health-care obligations to their retirees. At best, they’ll suffer theVallejo bondholders’ fate — though a three-year deferral of payment is no small matter to an investor. At worst, they’ll take bigger losses as obligations pile up. It’s easy to imagine some future mayor convincing a bankruptcy judge that it’s only fair for bondholders, along with union members, to take big cuts in a restructuring. Indeed, heavily indebted governments’ willingness to repay crippling municipal debt will depend on what’s politically expedient. Today, politicians still see the advantages of borrowing more. Ten years from now, it may be more practical for a governor to tell the public: we’ve borrowed too much, we did so because clever Wall Street investors convinced our predecessors that it was a good idea, and we shouldn’t have to pay those investors back.”

So Vallejo was not a panacea, but it did help the city and, as Gelinas points out, might set the stage for much more far-reaching results from future municipal bankruptcies. That’s what has many bankruptcy critics concerned. Granted, bond holders might have reason to fear that result, but that should give taxpayers hope that bankruptcy could provide the pressure needed to force officials to get out from under these unsustainable costs for public employees. Cities are running out of money and something has to be done.

Sure, it would be better if elected officials used other options such as those detailed by McMahon before relying on bankruptcy. But that’s wishful thinking. Officials would rather play financial games and seek new tax revenues or leave the mess for future politicians. Yes, as other critics note, municipal or state bankruptcy is just a reflection of failure. But that’s exactly what governments need — some level of failure to force them to act responsibly. As Meltzer understood, failure — or the threat of it — is the only thing that works.

———————–

CalWatchDog.com’s Special Series on Municipal Bankruptcy:

Broke Municipalities Look to Bankruptcy Option

Bankruptcy Didn’t Make the Sky Fall In Orange County

Local Governments Face Bankruptcy Quandary

Bond Holders Seek Governmental Transparency

 

72 comments

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  1. Beelzebub
    Beelzebub 9 March, 2012, 11:11

    You folks want to know why the Calfornia is more interested in enforcing Federal law instead of protecting State law when it comes to medical marijuana? You want to know why Prop 19 – to make marijuana legal – got defeated? Look at who the anti-pot lobbyists are and who the largest contributors are. It all makes perfect sense. The corruption is over the top!

    http://www.republicreport.org/2012/exclusive-why-cant-you-smoke-pot-because-lobbyists-are-getting-rich-off-of-the-war-on-drugs/

    Reply this comment
  2. Bob
    Bob 9 March, 2012, 13:44

    He argues that “officials committed to cutting costs already have options for putting the squeeze on their unions.

    McMahon lives in a fantasy land. Darrell Stinkbug was a union lawyer before becoming a politican and Porky Perez was a union activitst for crying out loud.

    Reply this comment
  3. Bob Smith
    Bob Smith 9 March, 2012, 21:28

    I believe the bond people are reacting to decisons made by the courts. In a regular bankruptcy everybody takes a haircut. If pensions and health benefits are unmodifiable obligations, however, all of the financial fallout of a bankruptcy must fall solely on the bondholders.

    Reply this comment
  4. Rex The Wonder Dog!
    Rex The Wonder Dog! 9 March, 2012, 23:53

    If pensions and health benefits are unmodifiable obligations,

    Everyone takes a haircut-including pensions, ask Central Falls RI.

    Reply this comment
  5. Bob Smith
    Bob Smith 10 March, 2012, 00:46

    “Everyone takes a haircut-including pensions”

    That’s certainly what should happen, but not, as I said, what the California courts want to happen. That’s the point of the “bankruptcy panels” the CA legislature now requires. So long as municipalities can’t file bankruptcy (given the required composition of such panels that’s the likely result) they can’t escape the California court system that’s denying them relief.

    Reply this comment
  6. Rex The Wonder Dog!
    Rex The Wonder Dog! 10 March, 2012, 08:15

    That’s certainly what should happen, but not, as I said, what the California courts want to happen.

    Bob, the BK courts are federal courts-CA state courts are not involved. What a muni must do today is do a 60 day mediation, because the public unions got a watered down bill passed that stopped a muni from going right into BK court. So the CA court system has nothing to do with the relief. Federal BK court has already said it is perfectly OK to cut pensions, at Central Falls it was as much as 55%.

    That WILL happen in Stockton mark my words-because the money is simply not there. If it is not there and there is no way it can/is going to come, then pensions take haircuts.

    Reply this comment
  7. Bob Smith
    Bob Smith 10 March, 2012, 11:26

    “BK courts are federal courts”

    What about “if they can’t file BK they can’t escape the California courts” implies I didn’t know that?

    The problem here is the mediation. It makes California courts very much part of (or rather, in opposition to) the relief. What happens when the unions cry foul and claim the municipality isn’t negotiating “in good faith” (because, after all, the municipality just wants to wait the 60 days and file BK)? Answer: they go to the the CALIFORNIA courts to sort it out. Given the ample precedents that public employee benefits are untouchable, there’s no way any CA court will allow them to exit mediation and file BK. As I said before, the point of this exercise is to keep things out of Federal court, where CA court precedent doesn’t apply.

    Reply this comment
  8. Rex The Wonder Dog!
    Rex The Wonder Dog! 10 March, 2012, 13:20

    What about “if they can’t file BK they can’t escape the California courts” implies I didn’t know that?

    The CA courts have no involvement here whatsoever.

    There is mediation, but that is not court mandated.monitored or reviewed. So they go through the mediation, and it will not solve a thing, then they file BK.

    What happens when the unions cry foul and claim the municipality isn’t negotiating “in good faith” (because, after all, the municipality just wants to wait the 60 days and file BK)? Answer: they go to the the CALIFORNIA courts to sort it out.

    #1-it is not a negotiation, so it does not have to be in good faith. You have a mediator and if the sides don’t meet then they don’t meet, you move to BK.

    #2- The CA courts have no jurisdiction and any case filed would be dismissed as soon as it is filed. No worries.

    Reply this comment
  9. Tough Love
    Tough Love 11 March, 2012, 07:55

    Bob, If … “the unions cry foul and claim the municipality isn’t negotiating “in good faith”” …. try that unilaterally and too often or too aggressively defined, it seems that the city have the right to get a determination in FEDERAL COURT that they have met the 60 day test, than then file for Bankruptcy?

    Reply this comment
  10. queeg
    queeg 11 March, 2012, 08:34

    You all jnow the end game…chaos in streets…when the money is apportioned ala universal haircuts!

    Reply this comment
  11. SkippingDog
    SkippingDog 11 March, 2012, 10:41

    If the cities have engaged in bad faith negotiation, or haven’t properly completed the fact-finding process, they would have no standing to seek protection in the bankruptcy court. That is particularly true if the State of California opposes such a filing.

    Since counties and municipalities are nothing more than subdivisions of state government, the state has a clear legal interest in their activities and could be expected to oppose such efforts. That’s a big reason why the recent law requiring such a fact-finding and cool down period was enacted.

    On top of that, cities like Stockton will find themselves opposed in the bankruptcy filing by no less than CalPERS itself, which will make sure the municipality meets every single requirement for such a filing and will then oppose each of the grounds upon which the filing is made.

    For those of you hoping pensioners themselves would be forced into a haircut, it simply wouldn’t happen in California. Every pension system is a politically independent agency, and every pension system has its first and foremost fiduciary duty to its members. That means it would be either CalPERS or one of the independent pension systems opposing a municipal bankruptcy filing and, even if one were filed, the pension system would likely be number 1 on the creditor list and bring the full force of its resources to bear during the litigation.

    I know such thoughts are inconvenient, but you really need to understand the reality of your hopes and dreams.

    Reply this comment
  12. Tough Love
    Tough Love 11 March, 2012, 11:17

    Quoting Skippy …”Since counties and municipalities are nothing more than subdivisions of state government, the state has a clear legal interest in their activities and could be expected to oppose such efforts. That’s a big reason why the recent law requiring such a fact-finding and cool down period was enacted.”

    No Skippy, the ONLY …”reason why the recent law requiring such a fact-finding and cool down period was enacted.” …. is because the Unions still control the Democratic Legislators they have paid off, and are trying to do everything in their power to stop and/or delay the VERY MUCH needed Pension reforms.

    Reply this comment
  13. Tough Love
    Tough Love 11 March, 2012, 11:51

    Skippy, endlessly repeating that CalPERS and … “Every pension system is a politically independent agency,” ….. as well as any actions they take to oppose reform, will do nothing (nor can the Courts do anything) to create the money that now doesn’t exist (nor will likely ever exist) to pay all pension “promises”.

    The excesses approve by paid-off legislators will ultimately lead to the haircuts you incorrectly think will never happen.

    Denial is not a solution.

    Significant reform (ASAP) is.

    Reply this comment
  14. Beelzebub
    Beelzebub 11 March, 2012, 13:05

    All of you need to read this latest Stanford U. study on 24 of the largest municipal pension systems in CA (98% of total municipal pension assets) and how screwed up they are. The average pension system is only about 50% funded. Any system that is not at least 80% funded is in the danger zone.

    More evidence that the pensions are essentially insolvent. No possible way will the next flood of public hogs entering the pension system over the next 10 years get their full pensions. Not only will it be a ‘haircut’ – it will be a buzzcut.

    In the end it’s all about the math. The union officials have lied to the public workers for years. They made promises that simply can’t be kept. And the day of reckoning is getting closer.

    Support for Jerry Clown’s tax increase proposal is falling like a 10 ton rock. 2 months ago it had a 68% approval. Today it has only 52% approval. Average people are tired of getting screwed by government.

    Read this report. It’s a real eye opener.

    http://siepr.stanford.edu/system/files/shared/pubs/papers/pdf/Nation_More_Pension.pdf

    Reply this comment
  15. Rex The Wonder Dog!
    Rex The Wonder Dog! 11 March, 2012, 13:47

    That’s a big reason why the recent law requiring such a fact-finding and cool down period was enacted.

    There was only ONE reason this new law (watered down version even) was passed, because the firewhiners gave a couple million to the democratic party, no other reason.

    Reply this comment
  16. Rex The Wonder Dog!
    Rex The Wonder Dog! 11 March, 2012, 13:54

    On top of that, cities like Stockton will find themselves opposed in the bankruptcy filing by no less than CalPERS itself, which will make sure the municipality meets every single requirement for such a filing and will then oppose each of the grounds upon which the filing is made.

    Yep, they surely will if they go after pensions, which they have to. And Calpers will lose, just like the cops and ff in Central Falls RI lost. I am sure Stockton expects a fight with Calpers and is getting ready for it. I bet they are saying “fine, bring it on”.

    For those of you hoping pensioners themselves would be forced into a haircut, it simply wouldn’t happen in California. Every pension system is a politically independent agency, and every pension system has its first and foremost fiduciary duty to its members. That means it would be either CalPERS or one of the independent pension systems opposing a municipal bankruptcy filing and, even if one were filed, the pension system would likely be number 1 on the creditor list and bring the full force of its resources to bear during the litigation.

    Skippy, Central falls RI said the exact same thing. They lost, calpers will also lose. As for priority the pensions will NOT get a priority over bonds, and they will both be taking major haircuts, of at least 50% IMO. They can bring “the full force of its resources to bear during the litigation” all they want, that is why they call it litigation, both parties duke it out in court with all their resources.

    Skippy, stop grasping at straws. The jig is UP buddy, gravy train ride is now coming to a halt.

    Reply this comment
  17. SkippingDog
    SkippingDog 11 March, 2012, 14:01

    Lot’s of huffing and puffing by the Three Amigos again, I see. Whatever the merits, or lack thereof, of targeting public pensions for reform may be, the real driver isn’t “math” or “the economy,” it’s a decidedly Republican effort to open a front of attack on organized labor that will reduce its effectiveness in opposing other Republican candidates and proposals.

    Public pension reform, “Paycheck Protection,” etc., are all just tactics in the ongoing struggle between labor and capital, whether those fights are in California, New York, RI or Wisconsin.

    The workers entering the public pension system over the next decade will receive substantially reduced benefits from those available during the past decade. That alone will reduce the direct cost of public pensions, but we’ll all end up paying more direct costs for the labor those people perform on our behalf, since the true cost won’t be offset by pension contributions or other benefits.

    When the next round of state park closures is announced, class sizes are at 60 kids or more, and other public services that people want and expect are being further reduced, you’ll see people voting for a tax increase and being happy to do so. It may not even be necessary to go that far, since the Democrats are increasingly likely to pick up the seats necessary to give them a two-thirds majority in the legislature later this year.

    In the meantime, keep those happy thoughts flowing, Amigos.

    Reply this comment
  18. SkippingDog
    SkippingDog 11 March, 2012, 14:10

    Once again, Rex, you are attempting to draw conclusions based on non-comparable examples. The surest way to see substantial tax increases would be for a city like Stockton to go into wholesale failure mode. Do you really think the people and institutions who would take haircuts long before any pensioners are exposed would willingly allow that to happen without an expensive and lengthy fight?

    Take a look sometime at the companies and institutional investment houses that make up the CalPERS investment portfolio. Do you really think organizations like those are going to just happily take losses and kiss their profits goodbye? Not likely. It didn’t happen with the banks and it’s not going to happen to Blackwater, KKR, and their brethren either.

    Reply this comment
  19. SkippingDog
    SkippingDog 11 March, 2012, 14:16

    BTW, Rex, do you really think a city like Stockton could afford to spend $50-$100 million in legal fees to fight CalPERS? Do you really think any city or county in California has that kind of legal fund?

    One of the best things about the way we have our pension plans set up in this state as independent agencies, is that they have a fiduciary duty to use any and all resources needed to protect the plan and its members. In the case of CalPERS, it would be easy to envision a scenario in which it could devote 1-2% of its assets to such a legal fight on behalf of its membership. How much would that be Rex? $3 or $4 billion dollars? Even the State of California doesn’t have the resources to effectively fight that kind of legal battle.

    Reply this comment
  20. Tough Love
    Tough Love 11 March, 2012, 14:43

    Quoting Skippy …”When the next round of state park closures is announced, class sizes are at 60 kids or more, and other public services that people want and expect are being further reduced, you’ll see people voting for a tax increase and being happy to do so.”

    Seriously? Long before THAT, the pensions for actives will be frozen, and in fairness to the actives, a haircut for the retired may also be on the plate.

    Quoting Skippy …”It may not even be necessary to go that far, since the Democrats are increasingly likely to pick up the seats necessary to give them a two-thirds majority in the legislature later this year.”

    Such a tax increase (forced via a 2/3 majority on a resentful citizenry) will surely result in a mass exodus of those WITH the funds to pay more.

    Reply this comment
  21. Tough Love
    Tough Love 11 March, 2012, 14:52

    Skippy, Without a doubt some town will rather soon decide to fund it’s essential service but not pay CalPERS. Rationale … so sue me, there’s no money. I really doubt a Court will place the funding of CalPERS ahead of essential services. And even if a Court orders them to pay, the response cycles back to …. “there’s no money”.

    After the first such refussal, a FLOOD will follow in short order. CalPERS demise will then be assured as will all the excessive “promises”. And your earlier comment was wrong … the “math” ALWAYS rules in the end.

    Reply this comment
  22. SkippingDog
    SkippingDog 11 March, 2012, 14:54

    Still waiting for you to tell us what the legal mechanism would be for freezing pensions and giving “a haircut for the retired.” There’s no provision in the law to do either of those things in California and, since pensions are just another form of private property, there are clearly 5th Amendment issues that would arise under federal jurisdiction, notwithstanding the challenges to such an action that would be prohibited by the contracts clause.

    Reply this comment
  23. Tough Love
    Tough Love 11 March, 2012, 14:55

    Quoting Skippy, …”BTW, Rex, do you really think a city like Stockton could afford to spend $50-$100 million in legal fees to fight CalPERS?

    Read my last comment ….. they don’t even have to fight. They just won’t pay because they can’t pay what they don’t have.

    Reply this comment
  24. Tough Love
    Tough Love 11 March, 2012, 15:04

    Quoting Skippy …”Still waiting for you to tell us what the legal mechanism would be for freezing pensions and giving “a haircut for the retired.” There’s no provision in the law to do either of those things in California and, since pensions are just another form of private property, there are clearly 5th Amendment issues that would arise under federal jurisdiction, notwithstanding the challenges to such an action that would be prohibited by the contracts clause.”

    What part of “there’s no money” do you not understand ? A” the legal mechanisms (or not) won’t change that.

    Reply this comment
  25. SkippingDog
    SkippingDog 11 March, 2012, 15:04

    The choice you describe might well happen somewhere, but cities are not immune to injunctive relief, nor does the law permit them to make preferential payments. Such a decision would immediately violate any agreements they have for bond financing, since those bond payments would be considered preferential payments absent a bankruptcy filing.

    A city could conceivably disincorporate, but even then its legal obligations remain intact and subject to payment through the city’s assets, be they land, utilities, airports, parks, etc.

    A city’s decision to simply quit paying its bills has the same effect on that city as it would have on you or me. Our creditors would begin legal action to take whatever remaining assets we had and, absent a bankruptcy work-out plan, our creditors would be successful.

    One final consideration that you seem to miss is that although “math always rules in the end,” the variables involved in the equation are subject to political rationality, not pure economic rationality. When the variables change, so does the result.

    Reply this comment
  26. SkippingDog
    SkippingDog 11 March, 2012, 15:08

    Since when does the world’s 9th largest economy have any basis to claim “there’s no money?” There is certainly money; it’s just a matter of whose money and how it’s spent.

    “There’s no money” is not only incorrect, it’s intellectually lazy.

    Reply this comment
  27. Tough Love
    Tough Love 11 March, 2012, 15:08

    Quoting Skippy …”A city could conceivably disincorporate, but even then its legal obligations remain intact and subject to payment through the city’s assets, be they land, utilities, airports, parks, etc.”

    I believe that’s incorrect, and unlike in a Corporate bankruptcy, a Bankruptcy Count has no authority too order the sale of municipal assets. I believe that extends to other Counts as well

    Reply this comment
  28. SkippingDog
    SkippingDog 11 March, 2012, 15:10

    Since pensions, and the required contributions therefore, are part of an employee’s salary, what makes you think that a city – any city – would have employees showing up for work if they were no longer being paid?

    Sorry, TL, but if that’s what you’re counting on, you simply don’t understand either politics or human nature.

    Reply this comment
  29. Tough Love
    Tough Love 11 March, 2012, 15:12

    Quoting Skippy …”Since when does the world’s 9th largest economy have any basis to claim “there’s no money?” There is certainly money; it’s just a matter of whose money and how it’s spent.”

    I was not talking about the entire State of CA, but particular municipalities. Thanks to the unbridled greed of the Public Sector Unions and cooperating self-serving politicians, many towns will certainly be able to honestly claim “there is no money” in the near future.

    Reply this comment
  30. SkippingDog
    SkippingDog 11 March, 2012, 15:13

    A city seeking chapter 9 protection is different from a city that makes a voluntary choice to disincorporate. Under chapter 9, you’re correct that the city cannot be forced to sell of its assets, but chapter 9 requires a legal showing of insolvency – meaning that the city can’t (not won’t) pay its ongoing bills – and further demonstration of the city’s commitment to a work-out plan supervised by the court.

    If the city doesn’t have the protection offered by a bankruptcy filing, it has no protections for any of its assets from creditors. That’s the whole point of a bankruptcy filing.

    Reply this comment
  31. Tough Love
    Tough Love 11 March, 2012, 15:16

    Quoting Skippy, …”Since pensions, and the required contributions therefore, are part of an employee’s salary, what makes you think that a city – any city – would have employees showing up for work if they were no longer being paid? ”

    Talk about intellectual laziness. Do you really believe that if a town stops paying CalPERS, it employees will walk off the job … losing there cash pay check ? I highly doubt that.

    And if they did, we might have a Regan-moment …”You’re Fired”. All the better. Start fresh with DC Plans.

    Reply this comment
  32. SkippingDog
    SkippingDog 11 March, 2012, 15:26

    I think that’s exactly what would happen in some cities, TL. You’d find police officers, fire fighters, and other essential workers simply deciding that a work agreement is a two-way street and that the city was acting in bad faith out of malice or spite. That, in turn, would create not only a municipal governing crisis but also a safety crisis. The County Sheriff probably wouldn’t have sufficient resources to replace the police department and there are few fire-fighting resources available for most urban areas outside of their own departments.

    If you’re hoping for some kind of Mad Max solution, I suppose that’s how it would start. Fortunately, the people who are actually responsible for such things generally aren’t interested in doing something like you suggest just to see what will happen and if they can pull it off. That’s a good thing.

    Reply this comment
  33. Tough Love
    Tough Love 11 March, 2012, 15:30

    Skippy, Time will surely tell … perhaps we’re both wrong ???

    I certainly see ugliness, and conflict in the future. California will be Greece in the not to distant future.

    Reply this comment
  34. SkippingDog
    SkippingDog 11 March, 2012, 15:35

    You might find this interesting:

    http://www.calitics.com/diary/11276/california-is-not-greece

    Big difference in the percentage of debt between California and Greece, along with a big difference in social norms, history, etc.

    Reply this comment
  35. That dog won't hunt
    That dog won't hunt 11 March, 2012, 16:12

    I think we will just have to wait and see as things unravel…. Skippy keeps referring to Calpers, but there are 12 county plans outside of Calpers, like Los Angeles, Orange, Kern. I do believe the tipping point has been reached. Los Angeles is already saying they can’t pay the next wage increase. My neighbors all send their kids to private school and don’t care if the schools become insolvent. It is not Democrat against Republican – it is private sector vs. public sector. It can be argued that the pension plans promised the increase in benefits would be totally paid for by investment returns and then they were not. What about all the public sector employees being let go? What side do you think they would side with now? I think we can all argue about it, but no one knows for sure what will happen. The Feds have already discussed the possibility of allowing the states some form of bankruptcy around these increasing debts. It is not just a CA problem.

    Reply this comment
  36. Al Moncrief
    Al Moncrief 11 March, 2012, 16:48

    THE COLORADO WE LIVE IN.

    Fact #1: Governor Hickenlooper signs bill this week to give a raise to state legislators. Fact #2: State legislators steal contracted, earned, fully-vested, and accrued retirement benefits from elderly in our state (SB 10-001, COLA theft bill.)

    Our values are warped.

    Thank God the courts are beginning to correct the outright, unabashed theft of public pension benefits that has occurred in a number of states across the U.S. Read below the clarity that this Florida judge brings to the matter, it is truly breathtaking.

    COLA LAWSUIT VICTORY IN FLORIDA! – FLORIDA JUDGE: IT’S ILLEGAL TO TAKE EVEN FUTURE COLA ACCRUALS FROM EMPLOYEES, LET ALONE COLA BENEFITS THAT HAVE ALREADY BEEN EARNED AND ACCRUED (SEE: COLORADO GENERAL ASSEMBLY, SB1.)

    The Florida Legislature attempted pension reforms that were not nearly as aggressive, in terms of risk of unconstitutionality, as those adopted by the Colorado General Assembly. Nevertheless, the Florida Legislature has been smacked down by the courts.

    Here are some noteworthy portions of the Florida ruling:

    “This court cannot set aside its constitutional obligations because a budget crisis exists in the state of Florida. To do so would be in direct contravention of this court’s oath to follow the law.”

    “To find otherwise would mean that a contract with our state government has no meaning.”

    “There was certainly a lawful means by which they could have achieved the same result.”

    “Florida law is clear that a legislature can, as part of its power to contract, authorize a contract that grants vested rights which a future legislature cannot impair.”

    “The elimination of the future COLA adjustment alone will result in a 4 to 24% reduction in the plaintiffs total retirement income. These costs are substantial as a matter of law.”

    “Where the state violates its own contract, complete deference to a legislative assessment of reasonableness and necessity is not appropriate because the state’s self-interest is at stake.”

    “All indications are that the Florida Legislature chose to effectuate the challenged provisions of SB 2100 in order to make funds available for other purposes.”

    “If a state could reduce its financial obligations whenever it wanted to spend the money for what it regarded as an important public purpose, the Contract Clause would provide no protection at all.”

    “The Takings Clause is intended to prevent the government from forcing some people alone to bear public burdens, which in all fairness and justice should be borne by the public as a whole.”

    “Defendants are further ordered to reimburse with interest the funds deducted or withheld . . . from the compensation or cost-of-living adjustments of employees who were members of the FRS prior to July 1, 2011.”

    Here’s a link to the decision in Florida:

    http://judicial.clerk.leon.fl.us/image_orders.asp?caseid=49809133&jiscaseid=&defseq=&chargeseq=&dktid=87117441&dktsource=CRTV

    Here’s hoping that one day Justus will prevail in Colorado. Read all about it and support the lawsuit at saveperacola.com.

    Reply this comment
  37. Tough Love
    Tough Love 11 March, 2012, 18:52

    Again ? … surprise surprise

    Reply this comment
  38. Beelzebub
    Beelzebub 11 March, 2012, 19:44

    Let the whole thing come crashing down so that there is simply no more money left to pay these greedy pension swine. That will settle it once and for all. At that point all the rules will no longer apply. And that day is coming. Sooner than you might think!

    Reply this comment
  39. john moore
    john moore 11 March, 2012, 20:27

    Stockton has suspended bond payments. Go to the city web site where they have dedicated space to AB506 mediation(a pre-Chap 9 step). Pensions are on the table in the mediation.

    Reply this comment
  40. SkippingDog
    SkippingDog 11 March, 2012, 20:38

    You’re mistaken, john moore. Existing pensions are not on the table, but OPEB such as the city’s retiree health insurance plan certainly could be. In Stockton’s case, CalPERS has already been identified as an “interested party” in the AB506 process, so you can certainly count on that agency’s legal presence on behalf of its members.

    During the mediation process, it is certainly possible that the city and its labor groups could reach an agreement to change or reduce its pension program in the future. I have no idea whether CalPERS would agree with or oppose such an approach. I suppose we’ll all just have to watch and see how this new ground is covered.

    Reply this comment
  41. SkippingDog
    SkippingDog 11 March, 2012, 20:42

    So you’re actually hoping for anarchy, Beelzebub? Once the rules no longer apply, it will be wise to remember they no longer apply to how you are treated as well.

    Are you really hoping for that to happen? Since you spend so much time worrying about the future of your kids, do you think such a development would make their lives better?

    Reply this comment
  42. Tough Love
    Tough Love 11 March, 2012, 20:47

    John, Hopefully Stockton won’t just lower salaries and retiree healthcare, but (1) hard freeze further pension accruals to stop digging the hole DEEPER, and since this does NOTHING to lower the existing pension debt, (2) lower the unfunded liability by reducing the past pension accruals of actives, and similarly hair-cutting the pensions of those already retired.

    Heaven knows, these excessive pensions were NEVER justified, but the result of union-politician collusion.

    No negotiations, Stockton has a one-time opportunity to get this anchor off it’s neck and set the standard for California which needs to get the pension-reduction ball rolling throughout the State.

    Reply this comment
  43. SkippingDog
    SkippingDog 11 March, 2012, 21:02

    If you read the city’s website, as john referenced, you’ll find that their main target is the $417 million debt they have for retiree health insurance. Read the letter to the retirees and the FAQ pages for current employees.

    Reply this comment
  44. Rex The Wonder Dog!
    Rex The Wonder Dog! 11 March, 2012, 21:37

    Whatever the merits, or lack thereof, of targeting public pensions for reform may be, the real driver isn’t “math” or “the economy,” it’s a decidedly Republican effort to open a front of attack on organized labor that will reduce its effectiveness in opposing other Republican candidates and proposals.

    I am not a republican and never have been, the real driving force behind stopping the pensiosn scam is obviosu, it is a scam, a fraud and the jig is up. And it is the “math”.;

    Half-truth #2: “There is no crisis. Once the stock market recovers, there is no problem.”

    Some of today’s pension Pollyannas claim that when stock-market trends return to their historical averages, everything works out. That is simply ignorance and puffery from people who don’t even bother to understand pension math. The actuarial projections used by most public pension plans are already assuming that 85-year historical returns will continue indefinitely, even though many of the major investment consultants have already dialed down their projections for the next decade. Perpetual stock-market increases of 10 percent annually are already baked into the funding ratios that now hover just above 70 percent on average nationwide. Even if stocks return next year to their previous peak levels (DJIA 14,100), that wouldn’t restore pre-recession funding ratios. That’s because there have been no capital gains from equities for the five intervening years while the underlying liabilities have grown about 50 percent. Stocks may have good and bad growing seasons, but there is never a crop failure on the liabilities farm. As I explained last year, stock indexes would have to double in the next two years to restore most pension funds to their 2007 funding ratios. To return the average pension fund to full funding, stock markets would have to produce 14 percent compounded returns the rest of this decade, with no intervening recession. That would put the Dow Industrials at 30,000 in January 2020. I’ll gladly give even odds against that scenario to anyone who wants to buy into that long-shot.

    Reply this comment
  45. Rex The Wonder Dog!
    Rex The Wonder Dog! 11 March, 2012, 21:47

    When the next round of state park closures is announced, class sizes are at 60 kids or more, and other public services that people want and expect are being further reduced, you’ll see people voting for a tax increase and being happy to do so.

    The sky is falling, the sky is falling!!!! No, there will nto be any tax increase, and your “for the children”: line obviously is not going to work.

    There is certainly money; it’s just a matter of whose money and how it’s spent.
    The money is currently going to GED gov employees with $5-$10 million pensions and that is where the cuts will come, so you’re correct-for once- there is moneu, and how it is spent will change.
    The surest way to see substantial tax increases would be for a city like Stockton to go into wholesale failure mode. Do you really think the people and institutions who would take haircuts long before any pensioners are exposed would willingly allow that to happen without an expensive and lengthy fight?
    Yes, I expect to see $200K pensions cut by 75% before other haircuts-and I could care less if there is a “fight”. Bring ti on. The fight has already been fought-and the cops and firewhiners lost, in RI
    BTW, Rex, do you really think a city like Stockton could afford to spend $50-$100 million in legal fees to fight CalPERS? Do you really think any city or county in California has that kind of legal fund?
    Do you expect ANYONE to believe that bogus claim?? San Diego said the same thing, expect a $100 million pension fight. Can you point to ANY case in America, where legal fees were $100 million?? No, because there is not a single one. $3-$10 million max.
    In the case of CalPERS, it would be easy to envision a scenario in which it could devote 1-2% of its assets to such a legal fight on behalf of its membership. How much would that be Rex? $3 or $4 billion dollars?
    They can spend their entire fund, they wiull still lose. Rememebr Skippy, the law is what matters, not how much you spend. You seem to think the mnore you can spend the better the result. Try telling that to Phil Spector of the Cebntral Falls cops and ff’s.

    Reply this comment
  46. Beelzebub
    Beelzebub 11 March, 2012, 21:54

    “So you’re actually hoping for anarchy, Beelzebub?”

    Not hoping for it. But I believe it will be the end result. In fact, we are really in a state of selective anarchy today. Those in power are pretty much immune from the rule of law. And through acts of corruption lopsided rules were enacted that favor certain groups (like public employees) at the expense of the rest of society. The disenfranchised will eventually rise up and revolt unless we see pension reform.

    “Are you really hoping for that to happen? Since you spend so much time worrying about the future of your kids, do you think such a development would make their lives better?”

    It’s your ilk that is placing an enormous financial burden on the children who will be forced to pay for all the pension debt that continues to accumulate. Every time there is talk of a pension haircut for existing gov workers or retirees you stamp your feet, hold your breath and turn blue. I get the impression that you don’t give a damn about the younger generations. As long as you get yours – that’s all that matters. Unfortunately it might take an uprising to turn that attitude around. It would be a shame if it came to that.

    Reply this comment
  47. Rex The Wonder Dog!
    Rex The Wonder Dog! 11 March, 2012, 21:56

    Still waiting for you to tell us what the legal mechanism would be for freezing pensions and giving “a haircut for the retired.” There’s no provision in the law to do either of those things in California and, since pensions are just another form of private property, there are clearly 5th Amendment issues that would arise under federal jurisdiction, notwithstanding the challenges to such an action that would be prohibited by the contracts clause.
    There are NO 5th Amendment issues in BK court, and yes, retirees WILL have their pensions cut-ask the cop in Central Falls who had a $193K pesnion vut to $80K
    A city’s decision to simply quit paying its bills has the same effect on that city as it would have on you or me. Our creditors would begin legal action to take whatever remaining assets we had and, absent a bankruptcy work-out plan, our creditors would be successful.
    Once again, Skippy shows why he is a cop and nto a lawyer. If there is no money you will collect nothing, and BTW, you cannot force a muni to sell any “assets”, go after cash maybe, but not real property, that includes land, utilities, airports, parks.
    I think that’s exactly what would happen in some cities, TL. You’d find police officers, fire fighters, and other essential workers simply deciding that a work agreement is a two-way street and that the city was acting in bad faith out of malice or spite
    Bring it ON, let the GED Wonders walk off the job, there are alredy 500-2,000 applicants per EACH cop and FF opening, let them walk, see hwo they do in the real world with a GED and 4 years of military.
    The Feds have already discussed the possibility of allowing the states some form of bankruptcy around these increasing debts. It is not just a CA problem.
    Wow, here we go again, I am so tired of stating the law on the issue of state bankruptcy-STATES do NOT HAVE TO GO BK, they simply stop paying their debts, no one can sue them, there is NO WAY to get relief if they screw you over. States do NOT NEED bankruptcy protection because they have something better, the ability to not pay and not be sued over their breach, little pesky thing called the 11th Amendment.

    Reply this comment
  48. Rex The Wonder Dog!
    Rex The Wonder Dog! 11 March, 2012, 22:00

    It’s your ilk that is placing an enormous financial burden on the children who will be forced to pay for all the pension debt that continues to accumulate. Every time there is talk of a pension haircut for existing gov workers or retirees you stamp your feet, hold your breath and turn blue. I get the impression that you don’t give a damn about the younger generations. As long as you get yours – that’s all that matters. Unfortunately it might take an uprising to turn that attitude around.

    It is 100% public employees who will cause the intergenerational theft, by scam pensions that were NEVER worked for nor earned. That is a FRAUD, and I hope a member muni sues Calpers over the fraud of SB400, where they withheld material information on the cost of that giveaway.

    Reply this comment
  49. Rex The Wonder Dog!
    Rex The Wonder Dog! 11 March, 2012, 22:06

    SkippingDog says:
    You might find this interesting:
    http://www.calitics.com/diary/11276/california-is-not-greece
    California Is Not Greece
    by: Robert Cruickshank
    Carly Fiorina thinks California should file bankruptcy (Earth to Carly: the state can’t). And many right-wingers have argued that California has to reduce its level of spending, adopting austerity budgets to avoid the kind of financial problems faced by Greece. Along with other Mediterranean countries, Greece has been pushed to adopt austerity budgets that threaten a European-wide severe recession in order to satisfy bond markets that worry about the level of debt to GDP.
    California faces no such problem.

    Intesting, a left wing dork spouting off SEIU talking points?? PLEASE!
    Skippy, stop posting links to dorks like Cruickshank, they mean ZERO.

    Reply this comment
  50. Rex The Wonder Dog!
    Rex The Wonder Dog! 11 March, 2012, 22:09

    SkippingDog says:
    Since pensions, and the required contributions therefore, are part of an employee’s salary, what makes you think that a city – any city – would have employees showing up for work if they were no longer being paid?

    They would keep showing up, alld ay long, because in the end a $10 an hour job for a GED edcuated gov emplloyee is $10 an hour more than they could ever hope get in the real world where they would probably not be able to get hired.

    Reply this comment
  51. SkippingDog
    SkippingDog 11 March, 2012, 23:16

    Now that you’ve posted your daily round of nonsense, you should actually read the letter put up on the Stockton city page by their city manager. You might actually learn something.

    We’ll talk about the 11th Amendment again, no doubt, but a city is not a state. Even the 11th Amendment can’t prevent injunctive relief by the court for unlawful acts by the governor or treasurer. That’s an area where you sound increasingly like the “Tenthers” and others who have their own ignorant ideas about what the Constitution does and does not allow.

    You might also want to educate yourself about something called the “Stripping Doctrine.” That’s exactly the legal principle used to make state executive officers, like those I listed above, do things whether they want to or not. Writs of mandate or Writs of Prohibitum are used all the time against state officers. That’s why the Little Rock schools were forcibly integrated, as well as the University of Alabama and other fine institutions who believed the 10th and 11th Amendments somehow gave them magic powers to ignore the federal court.

    Reply this comment
  52. SkippingDog
    SkippingDog 11 March, 2012, 23:40

    Here’s a nice summary of 11th Amendment cases, Rex. Pay particular attention to the fact that a violation of the “Takings Clause” in the 5th Amendment is one of the clearly identified exceptions to the general rules of sovereign immunity you love to hypothesize about.

    http://www.columbialawreview.org/assets/pdfs/106/1/ChoperYoo-Web.pdf

    Reply this comment
  53. JW
    JW 11 March, 2012, 23:55

    Hey Rex, or surfpuppy619, or BillyBobHeny or JohnnyVegas….
    Early you were talking about legal fees…thought you might want to know you’re behind the times on those billable rates.

    Legal Fees Mount at Fannie and Freddie

    In 2012, a regulatory analysis found that taxpayers had advanced almost $50 million in legal payments to defend former executives of Fannie Mae and Freddie Mac in the three years since the government rescued the giant mortgage companies.

    During that time, $37 million went to three former Fannie Mae executives accused of securities fraud, according to the analysis by the inspector general of the Federal Housing Finance Agency, which oversees both companies. Acting as their conservator, the agency is charged with protecting taxpayers from further losses at Fannie Mae and Freddie Mac.

    Reply this comment
  54. JW
    JW 12 March, 2012, 00:03

    Oh BTW, San Diego City Attorney, already estimated the costs/ fees for a Muni Bankruptcy in San Diego at easily 100 million.

    http://www.voiceofsandiego.org/government/article_ad9f5522-2b73-11e1-90fa-0019bb2963f4.html

    But you already knew that months ago.

    Reply this comment
  55. Rex The Wonder Dog!
    Rex The Wonder Dog! 12 March, 2012, 01:15

    Skippy, using his old Google + “cut and paste” = more nonsense of things he has NO knowledge of.

    Nice cut and paste. There is no exception to the 11th Amendment, but you think because you can Google “11th Amendment” you know more than Harvard Law Professors.

    Earth to Skippy, if a muni files BK your pension is history.

    If a STATE refuses to pay you there is not a thing you can do about it. That is a FACT. There are no exceptions.

    That is free tuition to you.

    And “Googling” and then “cut and pasting” your Google answer is not going to change that.

    Reply this comment
  56. Rex The Wonder Dog!
    Rex The Wonder Dog! 12 March, 2012, 01:22

    BTW Skippy, I am sure you don’t know who John Yoo is, the dork who wrote that law review piece. He was the lawyer under GWB at DoJ that put out a now infamous and WILDLY DISCREDITED memo claiming that torture on enemies was OK.

    Next time you want to try to make some wild and crazy claim in the law you may want to chose a law professor who has at least a tiny bit of credibility.

    Reply this comment
  57. Rex The Wonder Dog!
    Rex The Wonder Dog! 12 March, 2012, 01:27

    We’ll talk about the 11th Amendment again, no doubt, but a city is not a state. Even the 11th Amendment can’t prevent injunctive relief by the court for unlawful acts by the governor or treasurer. That’s an area where you sound increasingly like the “Tenthers” and others who have their own ignorant ideas about what the Constitution does and does not allow.

    LOL…the nonsense you come up with never fails to make me LOL!

    I never said a thing about “injunctive relief by the court for unlawful acts by the governor or treasurer” or anyone else.

    You are very mixed up with your ramblings to get so much misinformation out of this. You are the basic gov trough feeder with a limited understanding of the law and our constitution who grasps at straws as he is watches his scam fall apart, and thinks Google and cut and paste can get over his cons.

    Reply this comment
  58. Rex The Wonder Dog!
    Rex The Wonder Dog! 12 March, 2012, 01:31

    You might also want to educate yourself about something called the “Stripping Doctrine.” That’s exactly the legal principle used to make state executive officers, like those I listed above, do things whether they want to or not. Writs of mandate or Writs of Prohibitum are used all the time against state officers.

    The stripping doctrine has NOTHING to do with anything we are discussing, but to the untrained GED educated gov mind who thinks Google and cut and paste can replace a legal education I can see how you are confused.

    BTW, a writ of mandate and prohibitum are so rare that you could not name ONE in the last 10 years issued against a state official. Don’t worry, you are desperate and are trying your best to throw out everything and the kitchen sink to try to get your scam over.

    Reply this comment
  59. SeeSaw
    SeeSaw 12 March, 2012, 11:59

    Ah, Skipper, its just like old days at the OCR, isn’t it. Those who chose not to continue their ugliness there, through Facebook, have just brought it over to the Watchdog. I know, Rex is there, on the OCR, under his supposed real name, or a psuedo name. Its not hard to tell. I think I know who you are on the OCR and SDUT, too, Skipper. You deserve a medal, for this one.

    Reply this comment
  60. Beelzebub
    Beelzebub 12 March, 2012, 12:41

    I see the federal deficit for the month of Feb/2012 was $231.7B. That’s $7B more than it was in Feb/2011. I thought they told us that they had the debt problem under control?

    But the greedy pension hogs would tell you that deficits don’t matter – that the laws of math are obsolete. The most laughable part of their argument is that pension benefits supercede all other entitlements and that the public pensioniers are bullet proof! 😀

    What an imaginary world that they have created for themselves! 😀

    Reply this comment
  61. Rex The Wonder Dog!
    Rex The Wonder Dog! 12 March, 2012, 13:14

    seesaw, I am going to tell you that your a pathetic little trough feeder and I am glad you are offended by my comments and posts!

    Brings a tear of joy to my heart!

    Reply this comment
  62. Rex The Wonder Dog!
    Rex The Wonder Dog! 12 March, 2012, 13:21

    The most laughable part of their argument is that pension benefits supercede all other entitlements and that the public pensioniers are bullet proof!

    Isn’t that exactly what Skippy has parroted here on this very thread?? Of course it is. That is what the cops and FF’s in Central Falls RI also said, right before they took a 55% pension shot in the shorts 🙂

    Reply this comment
  63. Ted Steele-- Poodle slayer
    Ted Steele-- Poodle slayer 12 March, 2012, 14:59

    Rexy Poodle—- must you post the same old denial drivel everywhere you go? Skip the dog has once again schooled you on the con law aspects—- are you still simply unabl;e to grasp the concepts? kinda sad boy!

    Reply this comment
  64. Rex The Wonder Dog!
    Rex The Wonder Dog! 12 March, 2012, 15:26

    Hi Teddy, you want some more smack down I see 😉

    Reply this comment
  65. SeeSaw
    SeeSaw 12 March, 2012, 17:00

    Rex, you are really a mangy dog. I feel sorry for you.

    Reply this comment
  66. SkippingDog
    SkippingDog 12 March, 2012, 18:39

    Actually, Beelzebub, you’ll find it was that sharp-shootin’ conservative Republican Dick Cheney who told all of us that deficits don’t matter and, not only that, but Reagan had proven it to be true.

    Reply this comment
  67. Rex The Wonder Dog!
    Rex The Wonder Dog! 12 March, 2012, 18:47

    Rex, you are really a mangy dog. I feel sorry for you.

    seesaw, that made me cry…….and I thought I was your friend 😉

    Reply this comment
  68. Rex The Wonder Dog!
    Rex The Wonder Dog! 12 March, 2012, 18:53

    Actually, Beelzebub, you’ll find it was that sharp-shooting’ conservative Republican Dick Cheney who told all of us that deficits don’t matter and, not only that, but Reagan had proven it to be true.

    That was a huge mistake, running GIANT budget deficits. We were actually running TWO huge spiraling deficits under Ronnie Raygun, trade and budget. We also found out “trickle down economics” was just a scam to make the rich richer and the poor poorer. I honestly believe that Raygun felt it was deficit, but of course it is not. The poor and middle class received PUNY tax cuts, of 5%-10%, while the rich received 35% or more in tax cuts in the time period.

    Although the period of 83-88 was prosperous, the USA went from the largest CREDITOR nation in the world to the largest DEBTOR nation in the world, a title we still, and always will, hold.

    Reply this comment
  69. Beelzebub
    Beelzebub 12 March, 2012, 21:46

    For the last 25 years the nation’s growth has been dependent upon bubble economics. That can last only so long before it blows sky high. We are back into a stock market bubble today. There is no way that the stock markets reflect real productivity and growth. The only reason we are at DOW 1300 is because of BAILOUTS, ZIRP, QUANTITATIVE EASING and BORROWING FROM CHINA et al.

    They have to try and keep the stock market moving higher since the pension funds rely on RETURN ON INVESTMENT. They can’t do it legitimately – so you are seeing massive manipulation.

    You are witnessing a FAKE ECONOMY.

    When they lose control and it crashes – watch the hell out. Next time it’s not going to rebound.

    That’s when your pensions go ***POOF***!!!!

    Reply this comment
  70. Rex The Wonder Dog!
    Rex The Wonder Dog! 12 March, 2012, 22:07

    The public employees Beelz still think that they are going to be receiving those multi million dollar pensions-but in reality it is now just a pipe dream. There is simply NO WAY they can be paid b/c #1) they are so large and #2) they start at such a YOUNG age. I mean where on earth did those public scammers think they could get million dollar pensions for HS grads at age 50???? Who came up with that scam????? And it is a scam. That would never happen in real life-it could ONLY happen in the fantasy-land of government employment, nowhere else.

    But it is still much harder for the private sector, where wages today are LOWER than they were 12 years ago-in 2000. The average wage in America is lower today than in 2000. That is how screwed up we are today. And public safety salaries went up 97% from 2000-2010.

    Reply this comment
  71. SkippingDog
    SkippingDog 14 March, 2012, 00:08

    Where are you working these days, Rex?

    Reply this comment

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