Have nothing to do with the [evil] things that people do, things that belong to the darkness. Instead, bring them out to the light... [For] when all things are brought out into the light, then their true nature is clearly revealed...

-Ephesians 5:11-13

Tag Archives: liabilities

More Proof People Are Moving From High Tax States

This article appeared online at TheNewAmerican.com on Friday, June 26, 2015: 

The latest interactive graph from CNBC  shows more people moving from high tax states such as Connecticut, New York, New Jersey and Illinois to lower tax states such as Texas, Tennessee, Colorado, and Arizona. The authors of the latest study reviewed data from United Van Lines and Atlas Van Lines over the last 10 years and concluded that Connecticut was the poster child for out-migration from a high tax state.

For the year 2013, and for the 10 years prior, 55 percent of all moves by these movers took people out of Connecticut. The Nutmeg State levies more than

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U.S. Financial Outlook has “Worsened Dramatically”

This article first appeared online at TheNewAmerican.com on Wednesday, June 17, 2015: 

English:

This graph is outdated but revealing

 

In its just-released report “The 2015 Long-Term Budget Outlook,” the Congressional Budget Office stated bluntly:

The long-term outlook for the federal budget has worsened dramatically over the past several years, in the wake of the 2007-2009 recession and slow recovery…. If current law remained generally unchanged in the future … growing budget deficits … would push [the national] debt above its current high level.

It’s all about government spending that’s baked into the cake:

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Moody’s Lowers Chicago’s Debt Rating to Junk Status

This article first appeared online at TheNewAmerican.com on Wednesday, May 13, 2015: 

Moody’s cut its rating on another $4 billion of Chicago’s debt to just above junk status, for a total of $13 billion that was downgraded on Tuesday. This is approaching two times the city’s total annual revenues, and fails to take into account the $550 million payment the city must make in December to keep the police and firemen’s pension plan solvent. Nor does it take into account the $230 million penalty the city must pay for terminating previous “swap” agreements that allowed it to continue to borrow at competitive rates.

With this two-level drop, $2 billion in additional penalties may come due, according to Moody’s: “[Our] current rating actions give the counterparties of these [swap] transactions the option to immediately demand up to $2.2 billion in accelerated principal and accrued interest [payments] and associated termination fees.”

Doing the math is frightening. But Chicago’s Budget Director Alex Holt seems unconcerned: 

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Memphis Police, Firemen Quitting Following Pension Plan Reductions

This article first appeared online at TheNewAmerican.com on Monday, March 16, 2015: 

English: Memphis, Tennessee skyline from the a...

Memphis, Tennessee skyline from the air

Last July more than half of Memphis’ police officers took sick days off to protest the reductions in the city’s contributions to their pension plan and increases in their contributions to the city’s health benefits plan. The national media was sympathetic with cases of “blue flu,” instead of recognizing the new economic reality: Because public pensions are underfunded, everyone expecting benefits from the city will now take a hit, not just new hires.

Some of those who took sick days in July now are quitting altogether, finding other better opportunities elsewhere. In fact, other departments from nearby states are advertising in local papers and setting up job fairs to entice the discontented to new positions.

In a word, those unhappy with the new reality are adjusting.

Most solutions proposed to bring underfunded pension plans back into balance have involved

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Politics and Mathematics Collide in Chicago

This article first appeared at The McAlvany Intelligence Advisor on Wednesday, March 4, 2015:

English: Downtown Chicago, Illinois at night. ...

Downtown Chicago, Illinois at night.

Chicago is a microcosm of Illinois: it has a determined unwillingness to face reality. Even Moody’s, in its latest downgrade of Chicago debt, has failed to grasp the enormity of the shortfalls facing the city and the state.

Moody’s tried to be realistic, using unrealistic numbers:

[Our rating] incorporates expected growth in Chicago’s already highly-elevated unfunded pension liabilities and continued growth in costs to service those liabilities, even if recent pension reforms proceed and are not overturned….

The “expected growth” will likely surprise to the downside even the realists at Moody’s, as the real shortfall in the five pension plans the state is funding is vastly greater than even the $100+ billion the state faces. A “special pension briefing” performed back in November by the state’s Commission on Forecasting and Accountability showed the accrued liabilities on those plans to be

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Moody’s Downgrades Chicago Again

This article first appeared online at TheNewAmerican.com on Tuesday, March 3, 2015:

English: in Chicago, Illinois, USA.

Downtown Chicago, Illinois

Within hours of Moody’s Investors Service announcing another downgrade to Chicago’s general obligation bonds last Friday, Mayor Rahm Emanuel’s administration responded, saying that Moody’s was out of touch with reality:

We strongly disagree with Moody’s decision to reduce the city’s credit rating and would note that Moody’s has been consistently and substantially out of step with the other rating agencies [Standard & Poor’s and Fitch Ratings], ignoring progress that has been achieved.

At the moment those other two agencies rate Chicago’s debt at A-plus or A-minus, each with a negative outlook. But in light of an imminent court ruling that could invalidate efforts to cut pension benefits, along with the crushing and increasing burden of those benefits, observers are just waiting for the next two shoes to drop.

As Moody’s noted, its downgrade will stand even if the court validates those pension modifications: 

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New Illinois Governor Facing Torrent of Red Ink

This article first appeared online at TheNewAmerican.com on Monday, January 12, 2015:

 

Previous Illinois administrations and politicians have been kicking the can down the road for decades. Now, the state has run out of road. Bruce Rauner, Illinois’ new Republican governor, was inaugurated on Monday and is facing a daunting task: a $4 billion backlog of unpaid bills and a budget showing deficits approaching $21 billion in three years unless something is done.

During his campaign that successfully ousted what Huffington Post noted as the “nation’s least popular governor,” Pat Quinn, Rauner made the usual political promises of streamlining government and improving education and the state’s business climate, all without increasing taxes. In fact, he promised

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GOP Midterm Victories: The GOP’s Plan and Path

This article first appeared at TheNewAmerican.com on Wednesday, November 5, 2014:

Thanks to a groundswell of unhappiness over the economy, healthcare, a porous southern border, and increasing distrust of government in general, Republicans who were swept into office run the risk of thinking that Tuesday’s nearly complete sweep was a vote for them and their policies. As the Wall Street Journal noted, “Many voters said they cast [their] ballots more in opposition to one candidate than [in] support for the other.” New Jersey Governor Chris Christie, chairman of the Republican Governors Association, got it right: “The president took a beating last night!”

Republicans used the president’s increasing unpopularity to connect their opponents’ support for his policies like a millstone, dragging them down to defeat. This marks two mid-term defeats that, according to the Journal, “rank among the

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Stock Market Gains Failing to Bail Out Pension Plans

This article first appeared at The McAlvany Intelligence Advisor on Friday, September 26, 2014: 

Pension managers’ hopes that investment returns – i.e., pixie dust – would bail them out from their bad assumptions, and keep their plans solvent and fully funded so that they would be able to keep every promise made, have finally crashed on the rocks of reality. Just three months ago, the Center for Retirement Research at Boston College released a study showing that the shortfall between promises and assets to pay them for 25 of the largest public defined-benefit pension plans in the country amounted to more than

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Despite Stock Market Gains, Public Pension Plans Fall Further Behind

This article first appeared at TheNewAmerican.com on Thursday, September 25, 2014:

 

In its latest report on public pension plans, Moody’s announced on Thursday that, despite recent historic gains in the stock market, those plans’ liabilities are increasing even more quickly. Reporting on the 25 largest public defined benefit pension plans in the country, Moody’s Global Credit Research estimates that those plans are now $2 trillion short of where they need to be to pay out all the benefits promised to their beneficiaries. This has occurred despite record gains in the stock market, which,

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California Governor Being Challenged by Republican Upstart in November

This article first appeared at TheNewAmerican.com on Tuesday, September 23, 2014:

English: Photo of California Attorney General ...

California Governor Jerry Brown

In response to a challenge posed by his Republican opponent for the governorship in November, California Governor Jerry Brown said:

A lot of people forget the mess that California was in just four years ago. There were 1 million jobs that had been lost. Our budget deficit was astronomical: 27 billion. We hadn’t had a budget on time in probably 10 years.

Brown’s challenger is Republican Neel Kashkari, a practicing Hindu born of Indian parents with a background as a Bush appointee and a former executive with Goldman Sachs. While his political positions on key issues qualify him as a RINO — Republican in Name Only — he is already closing the gap on the once-invincible California governor.

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Santa Clara’s Field of Dreams

This article was first published at The McAlvany Intelligence Advisor on Monday, July 21, 2014:

Cover of "Field of Dreams (Widescreen Two...

Ray Kinsella, meet the Mayor of Santa Clara, California, home of the brand new Levi’s Stadium where the San Francisco 49ers are scheduled to play their home games starting this fall. And where, it is predicted, their fans will come to watch.

Whether enough of them will is an open question.

Already nearly a third of the 49ers’ season ticket holders have

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New Jersey Governor Christie’s Lipstick Problem

English: , U.S. Attorney, Governor-elect of Ne...

(Photo credit: Wikipedia)

This article was first published by The McAlvany Intelligence Advisor on Friday, May 23, 2014:

Thanks to the current age of skepticism, aided and abetted by the internet, the “lipstick” strategy being used by Chris Christie is about to fail, revealing instead the economic pig that New Jersey has become during his administration.

Back in March 2012, Christie touted his budget that would only balance if a miracle occurred:

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Denial is a River in Vallejo, California

This article first appeared at The McAlvany Intelligence Advisor on Wednesday, Mary 19, 2014:

Denial of reality seems to be a job requirement to hold a position on the city council in Vallejo, California. Despite increased payments demanded from the city by CalPERS (the California Public Employees’ Retirement System), everything’s OK in Vallejo. Despite a warning from Moody’s in February that everything is not OK in Vallejo, everything’s OK in Vallejo.

Just ask the mayor, Osby Davis:

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Despite Denials, the City of Vallejo is Headed for its Second Bankruptcy

Back in February, 2008, Vallejo, California, was in desperate shape. Councilwoman Stephanie Gomes saw what was coming: “Our financial situation is getting worse every single day. No [one] wants to declare bankruptcy, but if you’re facing insolvency, you have no choice….” Two months later her council voted 7-0 to declare Chapter 9 bankruptcy. In that two month period the city’s budget shortfall ballooned from $9 million to $15 million despite cuts to museums, libraries, senior centers and other publicly supported services like road repair. Now, according to Moody’s Investors Service, the city is

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The New York Times Continues to Shrink

In its press release issued on Thursday the New York Times did its best to put lipstick on its pig, noting declines in earnings per share over the last quarter and the last twelve months but claiming that this represented great progress and

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Highland Park, Michigan, is Teetering on the Brink of Bankruptcy

The final straw for Highland Park, Michigan, may have arrived in the form of a letter from Fifth Third Bank last month announcing it is ending its monthly checks that have provided life support for the city inside of Detroit for the last three years. One of three banks sending checks to the city, Fifth Third said in its letter dated December 12 that it is

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Time has run out for Scranton, Pennsylvania, says Moody’s

When Moody’s Investors Service said back in November that Scranton, Pennsylvania, had run out of options except for bankruptcy, Scrantonians began to think that was a pretty good idea. tax on local bars.

Economics 101 is kicking in, and Mert Gavin, the owner of Mert’s Piano Bar, complained:

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Illinois pension reform is no permanent fix

When Illinois House Speaker Michael Madigan opened debate over his bill designed to solve the state’s $100 billion shortfall in funding four of its five public pension plans, he said:

There will be changes here, much-needed changes, but this bill is a well-thought-out bill, a well-balanced bill that deserves the support of this body, the state Senate, and the approval of Governor Quinn.

Something’s got to be done. We can’t go on dedicating so much of our resources to this one sector of pensions.

Madigan instead birthed a

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Judge declares Detroit bankrupt, gives OK to cut pensions and burn creditors

In the opening to his hour-long statement to a packed courthouse on Tuesday, federal bankruptcy court Judge Steven Rhodes said:

It is indeed a momentous day. We have here a judicial finding that this once proud and prosperous city can’t pay its debts. It’s insolvent.

It’s eligible for bankruptcy. At the same time it has an opportunity for a fresh start.

He reeled off the list of problems the city is facing:

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Many of the articles on Light from the Right first appeared on either The New American or the McAlvany Intelligence Advisor.
Copyright © 2021 Bob Adelmann