Archived Failing U.S. Pension System May Need Federal Bailout To Survive (zerohedge.com)
submitted ago by NACHTJAGD
Posted by: NACHTJAGD
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Archived on: 3/16/2020 10:00:00 AM
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Archived Failing U.S. Pension System May Need Federal Bailout To Survive (zerohedge.com)
submitted ago by NACHTJAGD
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[–] CantBuySkills 0 points 1 point 1 point (+1|-0) ago
"Federal bailout"
You mean taxpayer bailout right?
[–] NACHTJAGD [S] ago (edited ago)
American taxpayer money hasn't paid for much since the gold standard was abolished. American taxpayer money assures the debt is serviced on the printed money, nothing else. Trillions are created out of nothing.
There are various options:
The pension fund may seek a FED injection, where the FED purchases large amounts of useless under-performing debt.
The State might create a National Bank to do the same as the above scenario.
The County and State governments mandate a very large tax increase on their population by having income, corporate taxes go upwards to 50% in most States to save these over promised pensions. Some states will levy these costs through property taxes.
Those currently contributing need to pay far more then their predecessors paid and thus get slammed with the burden of paying for the over-promised pensions of previous people. This would be deemed unfair and thus the current payers would move to make pensions voluntary and thus destroy the ponzi system.
Drastic reform is done to make the pensions more eligible, cuts in current retirees pensions and abuse of the system is ended to make the pensions long term viable again. Current retirees will feel this is unfair as they believe they are owed what they were promised.
The Federal Government may do a bail in, where the FED does not buy up garbage, but that the Senate uses budgets from created debt to fill the gaps back up towards 100%, hereby awarding mismanagement, fraud and corruption within the pension system. The Pension Benefit Guaranty Corporation (PBGC) doesn't have the funds to bail in these pension funds, but congress has the power to create it out of thin air. This would have a drastic inflationary effect on the US dollar and doing so will likely spark even more de-dollarization across the world, leading to a faster inevitable collapse of the US petrodollar hegemony.
The Federal Government creates a loan structure system to loan money, printed money, to whomever. Direct cash injections in absolute near bankruptcy funds and loans from money created out of nothing. This is merely extending the problem so the babyboomers get their pensions. Within 30 years these loans would also be insolvent and the majority would likely never be paid back. The large influx of cash on the markets would cause deflation and hit the lowest incomes the hardest, furthering the inequality that we see, just to save boomer pensions. The Democrats have suggested such a system and passed something in the House but is likely not to gain any support from Republicans in the Senate.
Do nothing, despite certain State's Constitutions forcing States to pay what is promised, and let the funds run out of money. The pension funds would then declare bankruptcy and those affected would become welfare recipients.
Force a Puerto Rico's bankruptcy plan of the government itself onto the pension funds. This would drastically lower the cost to the federal government and is the most likely scenario. People would still receive their pension check, it would just be above welfare rates, which for most compared to what they previously got could be 80% cuts to their income.
[–] daskapitalist ago
I propose letting it fail. The boomers arent too big to fail.