Tuesday, June 10, 2014

Pension shortfalls force states to put retirees money at risk

If there is one thing most politicians fail at, it is their ability to project and plan for the future, when it often more beneficial to their careers to sell out for today.  And because politicians for the most part are tied to 2-4 year election cycles, it rarely behooves them to make policies that are beneficial to constituents over the long run, and instead are more apt to sacrifice the future for their political present.

Because of the inflated housing bubble of the mid 2000′s, states were saturated with tax revenues and budget surpluses.  Yet instead of trusting history that validates that all economic cycles go both up and down, they spent this money like drunken sailors and even mortgaged their budgetary future through debt and the belief that the good times would never go away.  Because of this, state pension funds, which were primarily driven by municipal bonds and equity stocks, cratered hard during the Great Recession that began in 2009.  And five years later, these retirement funds have not yet recovered in nearly all regions within the United States.

Read more on this article here...


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