As predicted, the Biden administration will bail out “blue state” and union pensions – with our money


Many commenters, including yours truly, warned about this more than once:  and now it’s about to happen.  As soon as the stimulus bill is signed into law, hundreds of billions of dollars of US federal taxpayer money will be used to bail out pension funds in states that have crippled themselves through over-promising and under-saving.

The so-called American Rescue Plan, which would be more accurately called the Democrats Looting the National Fisc to Pay Off Demanding Constituencies and Grease Every Squeaky Wheel to the Left of Mitt Romney (DLNFPODCGESWLMR) Act, contains a few nickels and dimes for coronavirus vaccinations and billions upon billions of dollars to bail sundry labor bosses and financial managers out of the most recent episode of financial trouble associated with union pension plans, a decades-long parade of organized crime and disorganized incompetence brought to you by the Teamsters, the mafia, Wall Street, and the most ruthless mob of them all: the U.S. government.

This is straight-up piracy, but it is also more than that. Like their public-sector counterparts, these union-run multi-employer plans are in trouble not because of the coronavirus epidemic or some other unforeseeable circumstance but simply because they have promised extraordinarily generous benefits and failed to put aside money to pay for them. Under pressure from previous underfunding, the managers of these pensions (a committee that has over the years included everyone from Goldman Sachs to Labor Department regulators) have sought out riskier and riskier investments, hoping to achieve higher returns and help them close the gap. That has — contain your jactitations of shock and alarm! — not always worked out as intended. (The thing about risk is, it’s risky.) In effect, they took their money to the casino, came up short, and now are using their political clout with the Biden administration and congressional Democrats to demand that somebody else — you taxpaying suckers — make good on their losses.

Democrats in Congress — and, especially, those who hope to one day become president — take their orders from the union goons because while the American labor movement represents relatively few private-sector workers, it can end any given Democrat’s career in elected office pretty easily. (See: California, hilariously incompetent misgovernance of.)  And, increasingly, the labor movement is dominated by public-sector employees rather than private-sector ones, public-school teachers and police rather than factory workers and truck drivers. These public-sector workers are naturally comfortable with the forced transfer of wealth from the public at large to rapacious and highly organized political constituencies — that is their business model.

There’s more at the link.

Illinois is the worst-performing state among those desperate for bailouts.  Wirepoints reports:

Illinois’ pension debt, already the nation’s biggest, grew to $317 billion in 2020 according to a new report from Moody’s Investors Service.

. . .

The $317 billion in debt pushes Illinois’ pension crisis into a whole new level. Illinois’ debt now amounts to roughly 37% of GDP. That’s up from 26 percent Moody’s reported the year before.

. . .

Moody’s also reported that the asset-to-payout ratio for the state’s funds are now equal to about seven years’ worth of payouts … Healthy funds have ratios that range from 25-40 years’ worth of payouts.

Again, more at the link.

So Illinois and states like it, having painted themselves into a financial corner through wasteful and mismanaged expenditure and promising benefits to retirees that its pension funds can’t afford, are now going to be bailed out by the federal government, using your money and mine.  Nobody asked us whether we want to assume this burden, and nobody (at least, nobody in the Biden administration or the Democratic Party or the progressive left) cares what we think.  Our thoughts aren’t important to them – only our money.

In the light of such rapacity, expect further efforts on the part of the progressive left to “nationalize” private pension funds and personal retirement savings (401K’s and IRA’s).  They’ll proclaim grandiloquently that it’s to achieve a “fair” solution to the nation’s pension crisis:  but it’s really robbing those who’ve made provision for their retirement, to pay those who haven’t.  There’ll be furious resistance to it, of course, but the progressive left now sees itself as in control, and won’t care about that.  They’ll order, and they expect us to obey – or see the full panoply of the “Nanny State” deployed against us.

Sadly, the scale of the problem has become so great that nationalizing private pensions may be the only way that federal and state pensions and entitlement programs for seniors (including Social Security and Medicare) can survive.  As National Review points out:

The unfunded liability of Social Security (meaning the amount of money the system would need to have right now to secure its long-term solvency) is $38 trillion. The unfunded liability for Medicare adds another $53 trillion to the burden. For perspective, the unfunded liabilities for those two programs — by themselves — add up to about three times the total value of the S&P 500.

In comparison, “Total US retirement assets were $33.1 trillion as of September 30, 2020“.  That’s more than double the annual Gross Domestic Product of the USA.  It’s the biggest pool of retirement funds in the country, and therefore an irresistible target to those who want to cover up their political and fiscal fecklessness by any means available.  Expect more and more pressure to “nationalize” those retirement assets, use them to pay down federal and state government pension deficits, and replace them with some sort of “national pension” scheme – funded out of future government deficits, of course, because there’ll be no money for it anywhere else!



  1. At this point, the debt isn't "our" money. It's virtual currency. It came from nothing, and will be paid back by – nothing. The Fed will simply print more money to pay outstanding debts. Eventually, the debts will have to be repudiated before we reach Zimbabwe levels of devaluation. Given the "Democrats win every election forever" bill (and the tacit approval of the courts), I'm betting on devaluation followed by repudiation.

    Crank up the heat under that pot, Democrats. Obama was careful to boil the frog slowly. Biden (and his handlers) don't seem to be that smart. Or they think (know?) that they've already gained permanent power, and simply don't care what the public thinks any more.

  2. the nationalization of retirement plans has been discussed for at least 15 years. not openly, of course. i first learned about the nationalization of retirement plans when rush limbaugh brought it to my attention roughly 10 years ago during one of his radio shows.

  3. My wife's a CPA. I've been telling her that they've been coveting 401K and IRA funds for years. It always goes the same way – "They can't do that! Those are 'our' funds". To which I tell her it won't matter, they will be ravenous for cash and they'll do it.

    If memory serves, Hillary was the first to bring it up back in the 90s.

    Every few years some fruit professor surfaces to hawk their idiotic plan to seize our assets.

    I'll predict two things – one, if they try the economy will tank. It'll tank when it looks like they will do this as the world liquidates. Second, bullets will fly.

    I've said many times, prison is a retirement plan. Not a great one, but a viable one. I'm near retirement. When they wipe me out, what's my incentive not to start collecting skulls?

  4. How is this Constitutional? Same way the [sad] Potted Plant behind the Resolute Desk is forcing new voting/election rules on states. It's not.

  5. I think it was Miss Barnhart who pointed out, "if you can't hold it in your hand, or stand in front of it with a rifle and defend it, it isn't really yours."
    The "mail statement" from the 401K doesn't count as "ownership" either.

    Figure at some point either the currency is inflated to the point a 401K, all of it, buys a can of cat food, or it just gets "borrowed" with a promise (pinky swear!) to repay it at a later date.

  6. Makes you wonder if SCOTUS would find that States have standing on the issue of paying to bail out other States.

  7. Interestingly, Charles Dickens United States debt in Staff II of "A Christmas Carol:
    "The idea being an alarming one, he scrambled out of bed, and groped his way to the window. He was obliged to rub the frost off with the sleeve of his dressing-gown before he could see anything; and could see very little then. All he could make out was, that it was still very foggy and extremely cold, and that there was no noise of people running to and fro, and making a great stir, as there unquestionably would have been if night had beaten off bright day, and taken possession of the world. This was a great relief, because “three days after sight of this First of Exchange pay to Mr. Ebenezer Scrooge or his order,” and so forth, would have become a mere United States’ security if there were no days to count by."

    Apparently there's a push to bring back pre-civil war banking, not just energy use.

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