26 April 2018 – 26 July 2018
California Governor Jerry Brown said legal rulings may clear the way for making cuts to public pension benefits, which would go against long-standing assumptions and potentially provide financial relief to the state and its local governments. Brown said he has a “hunch” the courts would “modify” the so-called California rule, which holds that benefits promised to public employees can’t be rolled back … He said that in the next recession, the governor “will have the option of considering pension cutbacks for the first time.” That would be a major shift in California, where municipal officials have long believed they couldn’t adjust the benefits even as they struggle to cover the cost. They have raised taxes and dipped into reserves to meet rising contributions. The California Public Employees’ Retirement System, the nation’s largest public pension, has about 68% of assets needed to cover its liabilities.
Across the country, states and local governments have about $1.7 trillion less than what they need to cover retirement benefits – the result of investment losses, the failure by governments to make adequate contributions and perks granted in boom times. “In the next downturn, when things look pretty dire, that would be one of the items on the chopping block,” Brown said.
California’s Brown Raises Prospect of Pension Cuts in Downturn
Bloomberg (11 January 2018)
The United States Court of Appeals for the First Circuit gave us an interesting glimpse of the future last week when it ruled on an obscure case involving government pension obligations. Ever since the mid-1990s, police officers and fire fighters in the town of Cranston, Rhode Island had been promised state pension benefits upon retirement. But, facing critical budget shortfalls over the last several years that the Rhode Island government called “fiscal peril,” the state legislature voted to unilaterally reduce public employees’ pension benefits. Even more, these cuts were retroactive, i.e. they didn’t just apply to new employees.
… So, naturally, a number of municipal employee unions sued. The unions’ argument was that the government of Rhode Island was contractually bound to pay benefits – these benefits had been enshrined in long-standing state legislation, and they should be enforced just like any other contract. The state government disagreed. In their view, the legislature should be able to change laws, even retroactively, whenever it suits them. Last week the First Circuit Court issued a final ruling and sided with the state of Rhode Island: the government has no obligation to honor its promises.
[We pay] very close attention to these obscure court cases because they often set very dangerous precedents. This one certainly does. Because Social Security is in even WORSE condition than the State of Rhode Island’s perilous pension system. … According to the Board of Trustees for Social Security, … the Social Security trust funds “become depleted and unable to pay scheduled benefits in full on a timely basis in 2034.” … You’d think this would be shouted from the rooftops, especially given how long it takes to save for retirement. Yet instead the news is ignored or flat-out rejected by people who simply want to believe either that it’s not a problem, or that the government has some magical solution. The First Circuit just showed us what the solution is: cutting benefits. And now the government has legal precedent to do so. They can retroactively slash whatever benefit they want in their sole discretion regardless of what legislation exists, or what promises have been made in the past. … The First Circuit Court affirmed last week without a doubt that government promises aren’t worth the paper they’re printed on.
This Tiny Corner of Rhode Island Shows Us the Future of Social Security
Sovereign Man (5 February 2018)
Sir Winston Spencer-Churchill: Crazed Speculator
What ails Western nations? Something has clearly gone badly awry, but mainstream analysts and commentators are unable to explain it. They fail to see what’s obvious – and what my new book, The Bourgeois Manifesto, details: most people’s time horizons have become too short to generate the material prosperity they presently demand, and which politicians assure them is their “entitlement.” Yet short-termism and promissory politics are merely surface manifestations; what fundamentally ails us is the idol of democracy. Debt, deficit, penury, stagnation and war inevitably follow in its wake. Few democratic rulers’ time horizons were shorter than Winston Churchill’s; accordingly, few did so much damage to Britain and the world as he did. Today’s rulers and their stooges in the universities and mainstream media exacerbate democracy’s ill effects.
The latest Newsletter is a sample chapter from The Bourgeois Manifesto. It states:
[Churchill’s] problem, and the problem of the ruling class of which he was the leading figure, was that he possessed an excess of the aristocratic graces of honour, valour and profligacy – and sorely lacked the bourgeois virtues of conciliation, humility and prudence. In these fundamental respects, Churchill was the antithesis of Benjamin Franklin and the Robinson Crusoe Ethic – and a herald and exemplar of the Distemper of Our Times. In his private affairs as well as his political career, Churchill craved immediate reward without heed to long-term consequences. In short, he was reckless; and his actions repeatedly demonstrated that he lacked wisdom.
… Britain during the first half of the 20th century – which, effectively, was Churchill’s Britain – wasn’t an innocent victim of circumstances beyond its rulers’ control. Instead, it suffered the consequences of the mindset – that is to say, the fantasies, indulgences and miscalculations – of the anti-bourgeois ruling class that helped to create these circumstances. That makes the “Churchill cult,” which today fevers the minds of many members of America’s ruling class, such a malign force: they insist that their country tread the disastrous war- and debt-strewn path down which Churchill led Britain.
To read the full Newsletter click here; to order the book, go to Amazon’s web site in your country (e.g., Australia, Britain, Canada, France, Germany, India, Spain, U.S., etc.).