Are we seeing a repeat of the early ’80s? Pension funds are underfunded by disastrous margins. Government employees lead the pack going to the bread line at the soup kitchen. There is a novel thought, unionized government employees up in arms, confronted by well-armed government employees. By appearances, all parties involved are trying to sneak out of town, cheaply. The numbers in the report are but a small fraction of the shortfall. Is this an incident or a pattern? It’s been almost 30 years since we saw a run of pensioners left high and dry. In some cases, re-negotiations left pension benefits at next to nothing.
We have not seen the last of the economic collapse. This development could become a self – feeding decline in economic activity. Whether retail sales or domestic production, every aspect of financial activity suffers when discretionary income is reduced. The fact that this area of income is almost completely eliminated in these fund collapses threatens more business failures and defaults. Any number of things could trigger the next slide down the depression slope. The speculation in September was that the Dow could slide to 3,000. Today’s level is where it is, because it is inflated with U. S. Treasury debt. Remember the words of Warren Buffett. He said that U. S. Treasury debt would be seen as a historically significant financial landmark, that it could be as significant as the Internet and housing bubbles. Clearly, every seat is booked on that train wreck.
If I had never seen anything like this, There would be some room for benefit of the doubt. After seeing 30 year employees ending up with no pension at all, I have no trust lost at all for corporate management, labor unions or pension fund managers. Don’t let those people out of your sight. If they have any of your money, it may already be too late. You just don’t forget that lost look on the faces of people who are stuck and with no recourse left to them. Spending time waiting for good news from an attorney is a miserable experience. It would have been better to make the people in a position of trust miserable, before the trouble happened. Yet, people get in the same trouble, over and over, again.