Article Image

IPFS News Link • Economy - Economics USA

State Pension Fund Managers Must Be IMPRISONED

• by Karl Denninger

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.