NJ Watchdog: Billions in loans may save pensions or sink New Jersey

The U.S. government should rescue troubled state pension plans with billions of dollars in long-term, low-interest loans, New Jersey Senate President Steve Sweeney proposed on Wednesday.

The trillion-dollar question is whether it would save public pensions or sink them deeper in debt. That’s the underfunding public retirement plans collectively face in the 50 states, according to a Pew Foundation study.

“A federal plan to restructure the pension debts would cut annual payments and save the taxpayers money,” said Sen. Sweeney, D-West Deptford.

Sweeney said New Jersey now needs to pay $6 billion a year for the next 30 years to erase its $51 billion in unfunded pension liabilities. He calculated the annual payment would be cut in half to $3 billion with a $50 billion loan from the Federal Reserve at an interest rate of 1-percent a year.

But the Garden State’s total public pension system shortfall is actually $170 billion -- more than three times the figure cited by Sweeney -- according to New Jersey Watchdog’s analysis of state Treasury records. It includes:

• $82.7 billion in unfunded liability for the pension plans of state workers
• A $20.7 billion shortfall for the pensions of local government employees
• $53 billion in unfunded health benefits for state retirees, and
• $13.8 billion to cover the post-employment benefits local government workers

Paying that full debt could cost roughly $10 billion per annum, even at 1-percent interest over three decades. The yearly payments would equal one-third of the entire state budget, currently $33.8 billion.

“Bad idea!” opined Bob Williams, president of State Budget Solutions, a non-profit watchdog. “How does Sen. Sweeney expect the feds to fund a low-interest loan program? Congress has enough problems trying to get the loans they need to pass their unsustainable federal budgets.”

The full story is online at http://watchdog.org/231882/pensions-loans-new-jersey/.

How The World Almost Came To An End At 2PM On September 18

Very Interesting - So how closed did the nation's banking system come from a total meltdown on September 18th of last year? Extremely close, within hours as a matter of fact.

On C-Span, Rep. Paul Kanjorski (D-PA) explained how the Federal Reserve told members of Congress about an electronic run on the banks "to the tune of $550 billion dollars" within "an hour or two" last fall.

According to Kanjorski, on September 18, 2008 the Fed tried to "stem the tide" by pumping money into the financial system but it didn't work and decided instead to announce an immediate increase in deposit insurance to $250,000 per account to stop the panic.

Said Kanjorski: "If they had not done that, their estimation is that by 2 p.m. that afternoon, $5.5 trillion would have been drawn out of the money market system of the U.S., would have collapsed the entire economy of the U.S., and within 24 hours the world economy would have collapsed. It would have been the end of our economic system and our political system as we know it." -Political Wire

Watch and listen to what Rep. Kanjroski had to say about this on C-Span yesterday morning. Its kind of scary if you really think about it and to find out that our banking system is not much better off today then it was it was 4 months ago makes you want to scratch your head. 

After hearing this, I now understand why Treasury Secretary Geithner feel that the new financial bailout plan needs to be so bold and large in scope.

Fox Business: Gerald Celente Predicts Revolution

Fox News recently aired this segment with Gerald Celente the founder of the Trend Reasearch Institute.

He mentioned that before 2012:

1. America will be the first undeveloped country
2. Revolution, food shortages, riots, marches
3. Food instead of gifts for Christmas

The segment lasted for more than 5 minutes. He said things like parents shouldn't send their kids to get business degrees or psychology degrees and send them to community colleges to learn a real skill. He kept implying that food will become the most important thing for us. He said the retail industry will die off completely but local markets will thrive.

The host even introduced him as a guy who's "predictions always come true".

Lets hope he is wrong



Gerald Celente's website:

Trendresearch.com

Economists should listen to consumers

"Experts have a half-glass full outlook for the economy while average Americans are far more pessimistic. Here's why the consumer is probably right."

CNNMoney.com posted a story the other day that does not bode well for the economic outlook. Consumers surveyed earlier this month by The Conference Board, a well-respected private business research group, gave the bleakest six-month outlook for the economy ever in the nearly 42 year history of the survey. By a 3 to 1 margin consumers expect the economy to deteriorate over the next six months.

Click on the headline to read the story