The Great $1 Trillion University Funding Confidence Game

As this semester begins, college loans are nearing the $1 trillion mark, more than what all households owe on their credit cards. Fully two-thirds of our undergraduates have gone into debt, many from middle class families, who in the past paid for much of college from savings. The College Board likes to say that the average debt is "only" $27,650. What the Board doesn't say is that when personal circumstances go wrong, as can happen in a recession, interest, late payment penalties, and other charges can bring the tab up to $100,000. Those going on to graduate school, as upwards of half will, can end up facing twice that. _Atlantic

University presidents can collect salaries in the millions of dollars, university professors on sabbatical can be paid hundreds of thousands of dollars every few years for not teaching. Luxurious facilities are being built on expanding university campuses in the middle of an ongoing recession. And universities are bursting with "administrative bloat," a serious problem pushing higher education costs upward far above inflation rates.

A fact of academic life is that the tuition-debt nexus keeps most colleges going. At Loyola University in Chicago, 77 percent enroll with loans, as do 85 percent in New Hampshire's Franklin Pierce. At historically black colleges, where endowments are low and students are often poor, it's usually 90 percent. Nor is soaring private tuition the only reason. At public Kentucky State University, with only $6,210 in charges, 76 percent sign up for loans; so do 85 percent at the University of North Dakota, where state residents pay $6,934. What these figures suggest that borrowing is as much to finance living away from home as for bursars' bills. Books, travel, and socializing quickly add up. Room and board charges have doubled in actual dollars since 1982 to enhance campus life. Bowdoin's menu features vegetable polenta and butternut soup, while Penn State provides legal downloads of music numbering two million songs a week. But let's be clear. It's not the colleges which are paying for these and similar amenities. It's the students, mainly by borrowing, which the colleges actively encourage. _Atlantic

Where else do we see this type of irreversible bloat and skyrocketing costs? Oh, yes. In the public sector union arena. And would it surprise you to learn that university staff and faculty across the US are pushing for union representation and collective bargaining rights? Can you imagine the scam running up to $10 trillion a year, with a little union help?

Only in government, academia, and the media does one see such a total disconnect from the brutal realities of economic life in a recession. Such huge multi-trillion dollar debts could only be run up when these giant special interest groups cover for each other. It is a perfect storm of obfuscation and lead-up to massive ruination of ordinary lives.

The sacrifice and long term burdens and economic scars would perhaps be worth it to many young people and families -- if only the youth were receiving valuable training and preparation for life. Instead, as a rule, they are receiving an indoctrination into a dysfunctional ideology, rather than a worthwhile education. That is what makes the entire confidence game so completely destructive.

Government Unions to Taxpayers: "Me Master! You Slave!"

One can see the economic future of at least half the states and cities of the US, by looking at California. Nowhere in the US is the power of unions so total and uncontested, and nowhere is the Democratic Party so dominant. And nowhere in the US is the economic future so rutted into a predictable  path to total collapse. The complete fusion of government unions with the US Democratic Party presents a picture of corruption and an apparent impossibility for meaningful reform which staggers the logical mind.

The Democratic Party has folded Sacramento into one of the tightest one-party grips in contemporary American politics. In November, bucking the national trend, Democrats in California won not just the governorship but 51 Assembly seats to Republicans’ 29, 24 state Senate seats to Republicans’ 14, and every statewide office. With the passage of a referendum lowering the number of legislative votes required to approve a state budget (from a two-thirds majority to a simple majority), California is that rarest of land masses for the 2011 Democratic Party: conquered territory. State Democrats have freedom to rule virtually unchallenged by the scattered, rusticated Republicans.

As 72-year-old Jerry Brown enters his second governorship, he has an agenda to match that power, with visions even greater than those that haunted his two-term administration of the 1970s and ’80s: building 20,000 megawatts of renewable power, laying a new high-speed rail network that will connect the state’s major cities, forging a statewide infrastructure for alternative energy, hiring thousands of green employees. The new governor’s environmental agenda is ambitious, untenably expensive, and indelibly popular with voters and lawmakers.

Yet when Brown looks out on Democrat-controlled California, he seems less like Caesar at the Rubicon than Wojciech Jaruzelski at the Gdansk Shipyard. Brown is champion of a workers’ party with monopoly control, yet all his plans are being derailed by a labor movement nobody can harness. _Reason

The unions’ political triumphs have molded a California in which government workers thrive at the expense of a struggling private sector. The state’s public school teachers are the highest-paid in the nation. Its prison guards can easily earn six-figure salaries. State workers routinely retire at 55 with pensions higher than their base pay for most of their working life. Meanwhile, what was once the most prosperous state now suffers from an unemployment rate far steeper than the nation’s and a flood of firms and jobs escaping high taxes and stifling regulations. This toxic combination—high public-sector employee costs and sagging economic fortunes—has produced recurring budget crises in Sacramento and in virtually every municipality in the state. _CityJournal

California may be more beholden to government unions than most US states, but it is far from alone. Michigan, Ohio, New Jersey, Illinois, New York, and a score of other states are deeply wrapped within the web of government union power, and may find it ultimately impossible to escape doom.

...public-sector workers are spoiled rotten. Government employees earn 21% more than private ones and are 24% more likely to have access to health care. Only 21% of private workers enjoy a defined-benefit (DB) pension, which guarantees retirement income based on years of service and final salary. But 84% of state and local workers still receive DB plans.

All this might be grand if states and cities could afford it, but they cannot; unlike the federal government, they have the pesky obligation to balance their budgets. The recession has already drained pension funds. _Economist

US governments are corrupted by ties to government unions from the top to the bottom. Good government is impossible under these conditions, much less a viable economic plan for commercial prosperity.

The enslavement of taxpayers by government unions is virtually complete in California, and at least a handful of other states. But the Obama government wants to put every US state into the same position as California and Illinois. It is not clear that the nation could recover from such a disastrous plan, if achieved.

More: Even the NYTimes is beginning to see the handwriting on the wall for government unions. Anyone still pro government union by now, simply has no brain. Such people are generally referred to as zombies, in the age of Obama. ;-)

US Public Sector Unions' Descent Into Chaos

Nationwide, state and local government pension plans are suffering a $1 to $3 trillion dollar underfunding. State governments are sinking, in large part due to impossible commitments to public sector unions.

Until now, no one has been courageous enough to point out the impossibility of meeting the exponentially rising taxpayer commitments to public sector union warchests. Until now. Both taxpayers and a few governors and legislators are waking up to this harsh reality.

But unions and their minions are not waking up. Quite the opposite. They are descending into incomprehensible chaos. As if the threat of violence could possibly change the fiscal facts. Only criminals and fools take that tack in the face of the dark budgetary winds that are blowing.

US Government Desperately Needs a Maintenance Shutdown

Machinery of all types experience wear and tear over time. Routine scheduled shutdowns for vital maintenance are part of any industrial plant's life cycle in the developed world. Such routine and profound plant overhauls prevent disastrous failures at future times. The machinery of large governments is no different -- it needs to be shut down periodically for crucial maintenance, replacement, and refurbishing.

The US government is in current desperate need of overhaul, requiring deep surgical cuts to prevent a far worse catastrophic failure in the future. Despite rampant quasi-superstitious fears over the thought of a government shut-down, the alternative of "business as usual" is the genuine cataclysmic alternative.

The government in Belgium has been shut down for 257 days, and the people there seem happy with the result. In the US, as long as the social security checks and other important entitlement disbursements continue during the shutdown, the people of America should be likewise content. Particularly if they were made aware that crucial maintenance was being done to the government, to allow it to avoid a massive breakdown within the next decade or two.

Fiscal policies of government are in particular need of overhaul, with no end in sight for a growing massive debt. Educational, immigration, and cultural policies are leading to a dumbed down Idiocracy which cannot support a high tech society for long. Current energy policies are leading to a terminal energy starvation whose fatal repercussions will rebound through the US economy and society in devastatingly short order.

The US elections of 2010 revealed a deep-seated dissatisfaction among the American electorate, with the direction of the Obama - Pelosi - Reid regressive government. Most Americans believed the nation was being badly mis-directed by its leadership. The election of 2010 re-arranged the US Congress as well as state-level legislatures and governorships. It was not a merely cosmetic overhaul.

There is an awakening at the American grassroots -- particularly among persons who must produce the wealth which the rest of the country lives on -- that the American government has grown a huge crop of freeloaders both within and around Washington DC and state capitals. It is an unsustainable crop which is choking off any chance of economic prosperity for the nation at large.

A few modest attempts to right some of these wrongs in the state of Wisconsin has led to a massive reactionary and potentially violent government-sector union response. President Obama himself has denounced the Wisconsin governor's attempts to balance the Wisconsin state budget -- using his campaign apparatus to bus in hundreds or thousands of outside agitators-for-hire in an attempt to intimidate the government and people of Wisconson into acquiescing to their own death-by-parasites.

What is happening in Wisconsin is bound to happen in many or most other US states, and eventually in the US government. No one knows how violent and bloody these standoffs can become, if the freeloaders of the public sector decide to go all out in demanding their special privileges and benefits. Mr. Obama has so far done everything he can to fuel public union intransigence, anger, and potential violence.

If something cannot go on forever, it will eventually stop. It is in the interest of government and public sector unions to accept the reality that a perpetual wild and exponential growth in their ranks and benefits is unsustainable. An orderly shutdown and overhaul -- similar to a deep maintenance shutdown in an industrial plant or a "controlled burn" in the wild -- is mandatory to prevent a cataclysmic collapse eventually.

Scheduled, elective surgery is always in the best interest of the patient, the surgeon, and the medical centre. It is time to schedule a deep surgical procedure on the US government.

An Overpriced Educational Establishment Becomes Public Enemy 1

More: If you want to know how the educational establishment could drift so far out of touch with reality, the words of Alexis de Toqueville may provide a clue:

"Should members of the lettered class," wrote the Frenchman, "fall into the habit of frequenting only themselves and writing only for one another, they may lose sight of the rest of the world entirely and thereby lapse into affectation and falsity, gradually alienating themselves from common sense...." _DeToqueville_quoted by Fred Siegel

Educational expenses in the US have been rising exponentially, while educational attainment has not even pretended to keep pace. Public sector educators are on the verge of rioting in US state capitols, and universities are cutting vital departments to balance budgets -- while continuing a costly and counter-productive administrative bloat.

In a budgetary situation being played out in other cash-strapped states and municipalities, the legislation requires workers to cover more of their health care premiums and pension contributions, although supporters say local governments will ultimately decide on health care contributions for their employees.

The Wisconsin legislation also requires collective bargaining units to conduct annual votes to maintain certification. Unions would lose the right to have dues deducted from worker paychecks and collective bargaining can only cover wages. _CNN

This type of reform is under-stated in the extreme, and long past due. If public sector unions are prepared to riot in the face of such desperately needed budgetary and policy reforms, imagine what they will do in the face of a genuine collapse -- which they seem to be working so hard to bring about?

At the higher education level, many forces are working together to bring about significant -- perhaps revolutionary change.

Nationally the price of college tuition increased more than 274 percent from 1990 to 2009 -- roughly four times the rate of inflation. That's even more than the brutal rise in health costs that has touched off a near-crisis in that field.

...Technology will change, perhaps cataclysmically, almost all colleges. That's according to Clayton Christensen, a BYU grad turned Harvard professor who is now an acclaimed expert on innovation. He is the lead author of a new paper, "Disrupting College," on what lies ahead, and soon, for higher education.

He has studied how new technologies have disrupted and transformed industry after industry. And often established companies were upended or destroyed in the process.

The same fate could happen to established universities, as technology brings the biggest changes in information dispersal since the invention of the printing press.

Christensen and his co-authors write: "Roughly 10 percent of students in 2003 took at least one online course. That fraction grew to 25 percent in 2008, was nearly 30 percent in the fall of 2009, and we project it will be 50 percent in 2014."

The shocks don't end with technology. "Disrupting College" suggests that "the business model of many traditional colleges and universities is broken." Moreover, this model's collapse is "so fundamental that it cannot be stanched by improving the financial performance of endowment investments, tapping wealthy alumni donors more effectively, or collecting more tax dollars from the public. There needs to be a new model." _DailyHerald

From "Disrupting College:"

America is in crisis. Employers say paradoxically they cannot find the right people to fill jobs even though the country is facing its highest unemployment rates in a generation. Competition with a rising China and India and their vast populations lend urgency to the need for the country as a whole to do a better job of educating its citizens. _DisruptingCollege

As science better understands how students learn, and as educational technologies offer revolutionary possibilities for new teaching paradigns, the mass production assembly line factory-style methods of education will find themselves squeezed from all directions. Those which are unable to change due to fossilised unions or other forms of paralysing groupthinks of entitlement, will ultimately be crushed.

Educators and establishment insiders from K-12 to University are demanding that a recession-plagued US society mortgage its future, in order to provide them tenure and generous benefits. The halo over the head of the educational establishment is slipping badly, as teachers and professors are starting to be seen more as extorting thugs than as wise, honest, and impartial learning coaches and advisors. At the state and local levels, the problem is clearly the public sector unions and a climate of entitlement among public educational workers. At the higher education levels, it is more a problem of administrative bloat and an insane groupthink crisis of a badly decayed leftism which dominates the humanities and administration on most campuses.

Union Boss: "Screw the Workers! We're In It for the Power"

How Big Unions Exercise Power

1. By getting friendly legislators, judges, and bureaucrats elected and appointed
2. By lobbying legislators and bureaucrats for favourable legislation and regulations
3. By well-timed work stoppages and slowdowns to influence public sentiment
4. By the use of violent attacks and threats of violence against political enemies
5. By using political influence to immunise union activists from arrest and prosecution
6. By using allies within organised crime as "force multipliers"

and so on . . .

Source: Breitbart_via_NewsAlert
When unions invade the public sector, they corrupt every aspect of government. No longer is government looking out for the people. Instead, the primary purpose of government is to protect special interests -- primary among them being public sector unions.

Unionised public sector workers can refuse to clear snow-clogged streets. They can refuse to answer distress calls for assistance. They can refuse to provide care to anyone they choose. They can do all this because the mechanisms which might protect the public from arbitrary abuse of power by unionised public workers against the public depend upon action by other unionised public workers -- or by the abusive public workers themselves.

At the same time that citizens in western countries grow older and less able to take care of every critical aspect of their lives, governments are growing increasingly unionised AND influenced by public sector unions. Public sector union members have different health care policies and different pension plans than everyone else. Why should they care if everyone else has to suffer from union abuse of power?

More: US States Begin to Fight Back for Sake of Survival

Unions Cry Crocodile Tears in Fear of Retribution, Beg for Mercy with Knife at Throat of Taxpayers

How Much Crap Will Americans Take from Their Governments?

Before the US could become an independent country, it had to fight a bloody revolution in order to force Britain to release its claim on the colonies. The US experienced its ups and downs, over the centuries, but other than a brief civil war its people have remained relatively loyal to the crown government. But things do tend to change over time, and we may soon see just how far royalty-imitating US governments can push their subjects before the people decide to rebel.

Many members of the ruling classes suffer under the delusion that "The Tea Party Movement" is as bad as rebellions in the US are likely to get. Consequently these pseudo-intellectual twits tend to direct their most concentrated bile against people such as Sarah Palin or Sharron Angle. These complacent fools have a lot to learn, and a long way to fall.

The US federal government is spending its way into oblivion -- but the US government can have new money printed to make up its deficits. US states, cities, and counties, are likewise spending themselves into perdition, but they cannot print their own money. Consequently, they must issue bonds and otherwise borrow money to operate. But as these local governments continue to spend beyond their means, eventually even bond investors begin to wise up. Their bonds lose value, and such governments must pay more to borrow more.

When governments reach the end of their ability to borrow, they will be forced to cut services and other obligations. But even cutting services and all obligations except for public sector union contracts will not save the cities, states, and counties. These profligate spenders are going to have to do the unthinkable -- declare bankruptcy and slash their union contracts to the bare bones.

Even that will not be enough. They will have to go back on their word to workers and retirees, and in many cases dump public sector union contracts altogether -- and make public sector unions illegal for many occupations such as police and fire.

The unions will not sit still for this, in fact they will become even more violent than we are accustomed to seeing them become. In addition, when police and fire departments go on strike, let the public beware. Many cities, counties, and states have already begun cutting back on essential services, so when law enforcement and fire departments go on strike, a lot of people may not notice very much difference.

The Pew Center on the States estimates $1 trillion of underfunding for the pensions and health benefits of states.

Economists Robert Novy-Marx of the University of Rochester and Joshua Rauh of Northwestern University have higher totals for pensions alone; their gaps are about $3 trillion for states and almost $600 billion for localities.

Underfunded health benefits for states and localities together are reckoned by different studies between $500 billion and $1.5 trillion, report economists Robert Clark and Melinda Morrill of North Carolina State University.

Whatever the ultimate costs, they threaten future levels of public services. The generous benefits encourage workers to retire in their late 50s or early 60s after 25 years of service. The health benefits typically provide coverage until retirees qualify for Medicare at 65.

To pay for unfunded benefits, either government services must be cut or taxes must be raised. _Samuelson

Here is the public union problem in a nutshell: Union members lobby vociferously for untenable wages and benefit packages. Greedy politicians willing to accept bribes to get reelected, go along. On any threat of reduction in benefits, union organizers get out the vote with massive fear-mongering campaigns promising ruin if they do not get what they want. At election time unions donate massively to candidates willing to back union sponsored agenda. Over time, school boards, city halls, and legislative bodies in general get packed with politicians accepting bribes (campaign contributions) from the unions. _Mish

Like homeowners, states and cities splurged on debt and found inventive ways to get around borrowing limits to finance projects they couldn’t pay for otherwise. And recently the federal government encouraged investors to pour their money into the coffers of these less-than-creditworthy borrowers.

Now some of those investors, like the few lonely mortgage-industry short sellers in 2005–06, have started betting against the borrowers. Time reports that some of them “are jumping into the credit default swap market to bet against cities, towns and states.” A CDS is an insurance contract that protects a bond holder against default. But there’s a difference: You don’t necessarily have to be exposed to the underlying bond to buy a CDS. They can be bought or sold, and are priced depending on the market’s perception of bond default probability. If the risk increases, it is likely that the demand for CDSs will too, leading to an increase in their price. Brian Fraser, a partner at the law firm Richards Kibbe & Orbe LLP, told Time, “The spreads on CDSs have been growing, and the dollar amount of CDSs on municipals has grown in the last year. That’s a clear warning sign that people are effectively starting to short the muni market.”

The state and municipal debt crisis could culminate in a request for the third near-trillion-dollar bailout of the last two years. That much federal borrowing on top of the current debt could very quickly have an impact on interest rates and on the dollar. And at that point, we can just forget about the recovery. _ReasonMag

The last quote above suggests that once the repercussions from state and municipal defaults and overspending percolate through the federal government bailout process, we can forget about any economic recovery.

But that is just the author's optimism speaking. In reality what you can forget about is any kind of domestic harmony between government worker and taxpaying citizen.

What should you expect, ultimately? When all of the money-grubbing corruption at the state, municipal, and federal levels impacts the total economy and sinks through the thick skulls of the average citizen, producer, employer, and investor, there will be more anger and hostility within the citizenry than can be contained by traditional and legal means.

Anticipating this, the federal government and many states have tried for several decades to strip US citizens of their US Constitutional Bill of Rights 2nd Amendment right to own firearms equivalent to weapons used by average soldiers in the national infantry. Since most Americans do not own or practise with firearms regularly, the reaction against such rights-limiting moves have been only sporadic and limited. But some people have been paying attention.

Americans tend to think in narratives -- stories -- so the stories that are passed from parents to children and from peer to peer are significant, in terms of how Americans will act in the public sphere. The more oppressive and "lordly" governments and government employees tend to act toward ordinary citizens, the more often stories such as "Unintended Consequences", "Let Us Prey," and the long list of similar narratives will be passed from person to person.

Such ideas will not likely captivate the majority of Americans' minds, but compared to the number of Americans who sit at the controls of the corrupt governmental enterprises, the number of persons who become indignant at the growing tyrrany of the ruling classes is likely to be significant.

The problems of debt and corruption are not unique to American states, municipalities, or federal governments. Governments in Europe are facing the same problems -- with the added problem of a growing underclass of third world Muslims who are apt to generate bloody uprisings of their own.

The bond markets do not look good in the intermediate term, as all of this excrement contacts the rotating fan blades. The economic picture in general does not look good, which means that demand for economic goods such as commodities -- other than food -- does not look good.

How all of that will play out on the international stage -- who will be tempted to launch a war against whom, and so on -- must be left to your imaginations.

In the opinions of Al Fin economists and sociologists, it is public sector unions and their political partners in the US and other nations in the west who will bear a huge amount of blame for the economic brittleness and lack of flexibility which may ultimately (over decades) lead to governmental collapses across Europe and the Anglosphere. These public sector unions artificially inflate the sizes of governmental agencies to enhance their own power and income -- and prevent all governments and their agencies from downsizing during the inevitable, cyclic economic downturns which occur in any economic system.

As the next economic downturn develops long before we recover from the current one, the underlying dysfunctionality of politically correct, non-assimilated multiculturalism will manifest themselves in a very unpleasant manner.

You must know that those who are forewarned will more likely ride out the storm to reach the other side safely.

Public Unions Pushing US States and Cities to Breaking Point

It is not surprising that New York, Illinois, and Ohio are the #1, #2, and #3 US states losing population. "Poodle states" such as these are kept on a tight leash by public unions. In New York, vital public services will be curtailed to satisfy the insatiable demands of the public unions. More from a governor on the front lines of the battle to save the US from the public unions:

The majority of union members today no longer work in construction, manufacturing or "strong back" jobs. They work for government, which, thanks to President Obama, has become the only booming "industry" left in our economy. Since January 2008 the private sector has lost nearly eight million jobs while local, state and federal governments added 590,000.

Federal employees receive an average of $123,049 annually in pay and benefits, twice the average of the private sector. And across the country, at every level of government, the pattern is the same: Unionized public employees are making more money, receiving more generous benefits, and enjoying greater job security than the working families forced to pay for it with ever-higher taxes, deficits and debt.

How did this happen? Very quietly. The rise of government unions has been like a silent coup, an inside job engineered by self-interested politicians and fueled by campaign contributions.

Public employee unions contribute mightily to the campaigns of [leftist] politicians ($91 million in the midterm elections alone) who vote to increase government pay and workers. As more government employees join the unions and pay dues, the union bosses pour ever more money and energy into [leftist] campaigns. The result is that certain states are now approaching default. Decades of overpromising and fiscal malpractice by state and local officials have created unfunded public employee benefit liabilities of more than $3 trillion. _WSJ

(Notice that Al Fin has replaced the word "liberal" by the more appropriate descriptor "leftist" in the quote above, using square brackets. Leftists destroy economies intentionally, while those who go by the misnomer "liberals" only do so out of incompetence.)

Even the left-leaning New York Times has expressed some concern over the kamikaze tactics of public unions and their legislative enablers in municipalities and state houses:

It is the long-term problems of a handful of states, including California, Illinois, New Jersey and New York, that financial analysts worry about most, fearing that their problems might precipitate a crisis that could hurt other states by driving up their borrowing costs.

But it is the short-term budget woes that nearly all states are facing that are preoccupying elected officials.

Illinois is not the only state behind on its bills. Many states, including New York, have delayed payments to vendors and local governments because they had too little cash on hand to make them. California paid vendors with i.o.u.’s last year. A handful of other states, worried about their cash flow, delayed paying tax refunds last spring. _NYT

More states are approaching the breaking point due to unfunded pension, wage, and benefit liabilities to public unions.

It’s hard to overstate the havoc that a meltdown in the state and municipal bond market would cause. Many private investors and retirees are heavily invested in securities long thought safe. Worse, many pension funds, including state pension funds, have large positions in the muni market. The meltdown could feed on itself as falling bond prices would undermine state pension fund reserves and raise the interest rate on new debt issues. The panic will intensify and spread, sucking new states into the maelstrom — as more and more European countries have been affected by a crisis once limited to Greece. _AmericanInterest

Those US taxpayers who can get out, are leaving the states that have become enslaved to public unions and are growing impoverished as a result. But the same phenomenon is occurring at the US federal level, along with quite a few other fiscal, regulatory, and tax misadventures. Leaving one's country is a bit more complicated than leaving one province or state for another. But becoming an expatriate may well be easier than removing the politicians, regulators, lawyers, and union crooks who together are dragging the structure down.

You may want to add your weight to the much-maligned Tea Party movement before you go to those lengths. Most people are more attached to their homeland than they realise.

Who Said You Could Get Up? Bend Over!

If public employees retire at age 50 on a millionaire's income, you'll just have to pay more taxes, and work a few years longer to pay for it. You didn't actually believe that they were working for YOU, did you?

Many of the largest U.S. municipalities are understating the true size of their pension obligations by using inappropriate accounting methods, leading to $574 billion of unfunded pension liabilities, according to a study released Tuesday.

Those unfunded pension benefits are in addition to $3 trillion of unfunded liabilities that the study's authors have said exist among state pension plans. _WSJ

Reason

The only real choices you have are to either go expat, or go Galt. Otherwise, you're going to be paying for these people's sea cruises, motor homes, and summer cabins for the rest of your lives.

The result is a growing wave of pension shortfalls that threatens to wash over many local governments in the near future, the report said. The authors calculated that each household in the 50 cities and counties they studied owes an average of $14,165 to current and past government employees for their pensions.

The report says that five major cities -- Boston, Chicago, Cincinnati, Jacksonville and St. Paul -- have pension assets that can pay for promised benefits only through 2020.

Philadelphia, for example, has assets on hand that can only pay pension promises through 2015, the report says. But that assertion is disputed by some Philadelphia pension officials. _WaPo

Municipal bondholders are watching these developments closely (PDF), in the hope that they will not get burned by cities in the same way that Obama burned the auto company bondholders.

The US Democrat Party has been in bed with labour unions since forever. The relationship between the US DP and public sector unions is particularly close, and will only grow stronger as the pension crisis forces the unions to call in their markers. This will result in DP politicians losing more battleground elections, although most of the big city precincts are DP dominated (and bleeding cash).

Keep a close eye on Pension Tsunami for the latest developments.

Things Are Going to Get a Lot Worse

Public-sector unions aren't protecting government workers against abuse; they're inflicting abuse on the rest of us -- because private workers pay for all the government jobs by losing their own jobs and with higher taxes. _NYP

Public sector unions are sucking the blood out of the private sector.

Thirty years ago the vast majority of union workers were in the private sector. Public employees in unions reached parity with private sector members by 2009. This was aided in part by campaign contributions from the unions to elect Democratic Party candidates and generous pay packages and retirement plans passed by those same politicians in return.

By 2010, the general public received a series of shocks. The first shock was the jobless recovery of the Great Recession that cost 8 million jobs. Most of the job losses occurred in the private sector yet the majority of the $800 billion Stimulus Bill went to “save and create” public sector employment. The second shock was learning that civil servants earned twice that of private workers. According to the Bureau of Economic Analysis, Federal workers received average pay and benefits of $123,049 while private workers made $61,051 in total compensation. The third shock was revelation of incredible retirement plans doled out by politicians since 1999. In 2002, California passed SB 183 that allowed police and safety workers to retire after 30 years on the job with 3% of salary for each year of service, or 90% of their last year’s pay. During the Great Recession, fireman began retiring with $150,000 pensions at age 52 despite a life expectancy approaching 80. In Orange County CA, lifeguards, deemed safety workers, retired with $147,000 annual pensions. The Orange County sheriff, recently convicted of witness tampering, will receive $215,000 annually while in jail. Bob Citron, the Treasurer of Orange County who pushed the county into bankruptcy in the 1990s, receives a pension of $150,000 per year. A tsunami of anger and resentment is building. _NG

$3 trillion pension disaster on the way Will Obama Pelosi bail out their union buddies yet again -- at the private sector's expense?

Pension Tsunami blog

Overpaid government worker blog

Is it time to end tenure for university indoctrinators?

At a time when nearly one in 10 American workers is unemployed, here’s a crew ...who are guaranteed jobs for life, teach only a few hours a week, routinely get entire years off, dump grading duties onto graduate students and produce “research” on subjects like “Rednecks, Queers and Country Music” or “The Whatness of Books.” Or maybe they stop doing research altogether....dropping their workweek to a manageable dozen hours or so, all while making $100,000 or more a year... _NYT

And those are the more responsible of the tenured professors. ;-)

Things are going to get a lot worse, because there are a lot more shoes left to drop.

As US interest rates inevitably rise, every additional $trillion that Obama adds to the national debt will be felt by all but the richest Americans. Eventually even Obama zombies will mutter Obama's name as a curse, like everyone else.

Intrinsic Injustices In Obama's America -- The Unstable Society

At a time when workers' pay and benefits have stagnated, federal employees' average compensation has grown to more than double what private sector workers earn, a USA TODAY analysis finds.

Federal workers have been awarded bigger average pay and benefit increases than private employees for nine years in a row. The compensation gap between federal and private workers has doubled in the past decade.

Federal civil servants earned average pay and benefits of $123,049 in 2009 while private workers made $61,051 in total compensation, according to the Bureau of Economic Analysis. The data are the latest available.

The federal compensation advantage has grown from $30,415 in 2000 to $61,998 last year. _USAToday

Public sector workers are becoming the wealthy masters and tyrants at the expense of hard working and productive persons in the private sector. Working together as collaborative unions and associated groups, public sector factions use taxpayer dollars to support politicians who support their cause -- an ever stronger, larger, and better compensated public sector. Even if it kills the goose that once laid the golden eggs -- private markets.

"What do they produce besides deficits and debt?" asked Nicholas Bavaro, president of Bavaro Benefit Advisors in Modesto, when we talked to him. He's also a former member of the California Citizens Compensation Commission, a state panel that determines the salaries and benefits of California legislators and constitutional officers. "They don't produce any product that consumers purchase. They don't invest. They don't create jobs."

As to the "high level of skill and education" of the federal workers supposedly managing all that contracting-out, Mr. Bavaro responded, "There's no comparison" to private-sector managers, who "are at-will workers. If they don't produce, they're gone. They live by the standards of their company. You can't do that with federal, state or local government employees" because of union contracts that make it nearly impossible to fire them. "That's why we're in the mess we're in" with the national economy, he said. _OCRegister

Bonus chart from EscapeTyranny:

The Obama Pelosi regime generously gave another bailout to union supporters -- this time to teachers' unions. Public sector unions are well placed politically, in the increasingly impoverished and unstable Obama Pelosi world. Not only can these taxpayer supported groups campaign for and vote for politicians who will keep the corrupt scam in operation, they can also enlist the services of a large network of "community organisers" and quasi - organised crime auxiliaries to squelch and harass public assemblies of the opposition, while making sure through the use of force that opponents are unable to stage peaceful counter-demonstrations anywhere in the vicinity of public sector union rallies. If you doubt the reality of all of that, you are not paying attention.

Pension Tsunami is a website that carefully follows and documents this massive and growing injustice in Obama's America. As Obama Pelosi proceeds to provide generous payoffs to its supporters, the underlying economy of the US continues to shrink. Tax revenues continue to decline, even as munificent benefits to public employees continue to grow beyond logic or justification.

Public sector workers are the new royalty. Perhaps they should wear crowns and display identification decals prominently on their motor vehicles, lest any commoners show disrespect out of ignorance of their relative status. More: Pampered Public Employees

Remember that antiquated document, the US Constitution? Don't worry about it anymore. It's history. We are almost back to where we were before all of that nonsense started.