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The Suddenly Poor Life: Millions Will Lose Their Pensions

Discussion in 'Coffee Shack (Daily News/Economy)' started by Goldhedge, Mar 4, 2016.



  1. searcher

    searcher Mother Lode Found Site Supporter ++ Mother Lode

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    Collapsing Pensions Are “About to Bring Hell to America”

    Mac Slavo
    March 15th, 2017
    SHTFplan.com


    Along with the student loan debt bubble and other major financial factors, the looming pensions crisis is bound to be the death of us all.

    Because it’s based on a future promise to pay, it has long been a benefit dangled to solve strikes and union disputes – because, in the end, it is just more debt, whether private or public.

    With tens of trillions in unfunded liabilities, the weight of an avalanche remains dangling over our heads. An aging population is cashing in on needed retirement benefits while the younger generations must support multiples that are unsustainable financially.

    Somewhere between the retiree that needs clothing, food and lodging, and the bankruptcy of cities and state governments is the makings of the next economic crisis.

    via AgainstCronyCapitalism.org:

    This is one of those things that few will pay attention to until it’s a 5 alarm fire. Then the policymakers will run around with their hands in the air saying they didn’t see it coming.

    Of course they did. But addressing the problem is hard and will make people unhappy in the short term.

    This blog pointed out the sad, and quiet fact that entities like the government of South Carolina are deep in debt over pensions. Everywhere there are failing social systems.

    And somewhere, the rubber is going to met the road, and people are going to get hurt.

    As SHTF previously reported:

    In 2014 a new Federal law made it possible for pension funds to cut benefits for their recipients.

    n October of [2015] the canary in the coal mine fell over and died when Illinois announced that the State was posting pension payments because it ran out of money.

    Fast forward a few more months and things have been taken to the next level. The Central State pension fund in Kansas became the first such fund to take advantage of the 2014 law as 400,000 Americans who depend on their monthly pension income to pay for such things as their mortgage, groceries and medical expenses saw an average of $1,400 per month sliced of their monthly benefits.

    Unfortunately, there may be no avoiding some very painful lapses in checks in the difficult years ahead.

    As Market Watch reports:

    But take a look South Carolina’s government pension plan, which covers roughly 550,000 people — one out of nine state residents — but is a staggering $24.1 billion in the red.

    This is not a distant concern, but a system already in crisis.

    Younger workers are being asked to do much more to support the pensions of retirees. An analysis by the The Post and Courier of Charleston noted recently that “Government workers and their employers have seen five hikes in their pension plan contributions since 2012, and there’s no end in sight.” (Most now contribute 8.66% of their pay, vs. 6.5% before the changes.) At the same time, the pension fund has been chasing more stocks and alternative investments instead of relying on stable investments like bonds that may be much less volatile but generate only meager returns.

    And if that’s not troubling enough, South Carolina’s pension fund is far from alone.

    Yeah.

    California’s Calpers public retriree system is notoriously underfunded and doomed to implode. Chicago, Detroit and other urban wastelands are sagging under abysmal debt. Dallas, Texas pensions went insolvent. Puerto Rico is nothing but a propped up holding corp(se).

    Something massive has been swept up just under the carpet.

    Read more:

    Screwed Over Retirees: Dallas Suspends Withdrawals From “Insolvent Pension System”

    $8 Trillion Short On Pensions?! “No One Goes To Jail Because Establishment Is Complicit”

    The System Is About to Burst Open: TRILLIONS In Unfunded Pensions “Foreshadow A Bleak Future”

    Warning: You May Be Next: 400,000 People Just Had Their Pensions Cut By 50%: “Going to Happen To The Rest Of Pensions in the United States”

    Click here to subscribe: Join over one million monthly readers and receive breaking news, strategies, ideas and commentary.

    Please Spread The Word And Share This Post

    http://www.shtfplan.com/emergency-p...s-are-about-to-bring-hell-to-america_03152017
     
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  2. Uglytruth

    Uglytruth Gold Member Gold Chaser

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    https://www.bloomberg.com/news/arti...slash-pensions-for-retirees-of-defunct-agency

    Calpers Slashes Pensions for Retirees of Defunct Agency
    by
    Romy Varghese
    March 15, 2017, 1:12 PM EDT March 15, 2017, 2:46 PM EDT
    • Decision to cut retirement checks is the second in four months
    • Four cities that created agency could pay bill and save checks
    The California Public Employees’ Retirement System on Wednesday approved cutting the benefits of a small group of retirees in the second such move in four months.

    The reduction, effective in July, was triggered by the failure of a defunct public agency, the East San Gabriel Valley Human Services Consortium, to pay Calpers the entire cost of covering the pensions of its former employees.

    Most of the roughly 200 workers of the job-training service -- of which 62 are currently receiving pensions -- would see their benefits reduced by 63 percent, the rate by which the agency fell short of its obligations, according to meeting documents.

    "This is a terrible situation we all find ourselves in, but we have to protect the fund so we have to take this action," Calpers board member Bill Slaton said before voting.

    The step is likely to be replicated as communities in California struggle to meet rising pension obligations, said Dane Hutchings, a lobbyist for the League of California Cities, before the board meeting.

    "It’s incredibly unfortunate, but unless something can be done legislatively or by other means, retiree benefits are going to get cut significantly," he said.

    Across the country, states and local governments have about $2 trillion less than what they need to cover retirement benefits -- the result of investment losses, inadequate contributions and perks granted in boom times.

    Calpers says it’s following its fiduciary responsibility. It doesn’t set benefits but manages them on behalf of local governments, most of which are paying what they owe. Permitting monthly checks to flow to retirees whose former employers haven’t paid their bills undermines a system that has just two-thirds of what it needs to cover liabilities due in the years ahead.

    Calpers had asked the cities that formed the agency known locally as LA Works -- Azusa, Covina, Glendora, and West Covina -- to pay the debt to the retirement plan, but they declined, pointing to the lack of a legal obligation. The consortium went out of business in 2014 after Los Angeles County severed its relationship, citing overbilling.

    If the cities do end up taking over the entity’s debt within 60 days, the retirees would avoid the reduction, according to the Calpers’ action Wednesday.

    That’s what retirees will ask representatives of those communities on the agency’s board, which is set to meet later Wednesday, said Sandra Meza, who stands to lose much of her $3,300 monthly pension. They will appeal to the cities to at least pay the current bill to give them more time to come up with a plan, she said.

    "We only had two months notice," Meza said. "We need to regroup and consider which path to take."

    Calpers in November approved reducing retiree benefits for former workers in the tiny city of Loyalton.
     
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  3. TAEZZAR

    TAEZZAR LADY JUSTICE ISNT BLIND, SHES JUST AFRAID TO WATCH Midas Member Site Supporter

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    As Ye Sow So Shall Ye Reap !!! ahahahahahahahha
     
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  4. searcher

    searcher Mother Lode Found Site Supporter ++ Mother Lode

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  5. Brio

    Brio Midas Member Midas Member

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    I work for a very huge company that has many plants all across Canada and the US. Every day I hear co-workers say how pleased they are with their pensions, their retirement plans. My site is not unionized but the bennies are the same as the plants that are. I'm a contractor, I do not get benefits like h/c, pension. I get quite a bit more per hour but I cost the company a lot less. And I get to decide where my retirement savings go. They just don't get it. They do not get that the money they are told they'll get when they retire after 40 years of work will not be there. And I've got quite a few more years to pay the boomers and keep stacking.
    :)
     
  6. mtnman

    mtnman Gold Member Gold Chaser Site Supporter

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    Stolen from another site.



    This is something about which many people are asking!

    KEEP PASSING THIS AROUND UNTIL EVERY ONE HAS HAD THE OPPORTUNITY TO READ IT... THIS IS SURE SOMETHING TO THINK ABOUT!!!!
    THE ONLY THING WRONG WITH THE GOVERNMENT'S CALCULATION OF AVAILABLE SOCIAL SECURITY IS THEY FORGOT TO FIGURE IN THE PEOPLE WHO DIED BEFORE THEY EVER COLLECTED A SOCIAL SECURITY CHECK!!!

    WHERE DID ALL THAT MONEY GO?
    Remember, not only did you and I contribute to Social Security but your employer did also. It totaled 15% of your income before taxes.
    If you averaged only $30K over your working life, that's close to $220,500. Read that again. Did you see where the Government paid in one single penny? We are talking about the money you and your employer put in a Government bank to insure you and me that we would have a retirement check from the money we put in, not the Government. Now they are calling the money we put in an entitlement when we reach the age to take it back. If you calculate the future invested value of $4,500 per year (yours & your employer's contribution) at a simple 5% interest (less than what the Government pays on the money that it borrows).

    After 49 years of working you'd have $892,919.98. If you took out only 3% per year, you'd receive $26,787.60 per year and it would last better than 30 years (until you're 95 if you retire at age 65) and that's with no interest paid on that final amount on deposit! If you bought an annuity and it paid 4% per year, you'd have a lifetime income of $2,976.40 per month.

    THE FOLKS IN WASHINGTON HAVE PULLED OFF A BIGGER PONZI SCHEME THAN BERNIE MADOFF EVER DID.
    Entitlement my foot; I paid cash for my social security insurance! Just because they borrowed the money for other government spending, doesn't make my benefits some kind of charity or handout!!

    Remember the benefits for members of Congress? + free healthcare, + outrageous retirement packages, + 67 paid holidays, + three weeks paid vacation, + unlimited paid sick days. (DID WE VOTE THIS FOR THEM???)

    Now that's welfare, and they have the nerve to call my social security retirement payments entitlements?

    They call Social Security and Medicare an entitlement even though most of us have been paying for it all our working lives, and now, when it's time for us to collect, the government is running out of money. Why did the government borrow from it in the first place? It was supposed to be in a locked box, not part of the general fund.
     
  7. searcher

    searcher Mother Lode Found Site Supporter ++ Mother Lode

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    No.

    This is what they voted to give themselves and government workers with the tax money you pay. And they do this while literally crapping on each and everyone who pays taxes.
     
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  8. tom baxter

    tom baxter back from 2004

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    It was a scam alright, just a tax really but it was cruel to pretend they would give it back one day.
    People never question these things in the good times, only in the bad times, when it's too late to take action.

    I'm reminded of Joseph who took and stored grain in Egypt for 7 years to counter 7 years of famine God had showed him in a vision was coming. Interestingly the people of Egypt didn't save grain personally, and when the dearth came they lost all their savings, and their land, and even their freedom in exchange for the food they themselves had grown and provided to Joseph to stockpile. There was no free ride.
     
  9. searcher

    searcher Mother Lode Found Site Supporter ++ Mother Lode

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  10. searcher

    searcher Mother Lode Found Site Supporter ++ Mother Lode

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  11. GOLDZILLA

    GOLDZILLA Harvurd Koleej Jeenyus Midas Member

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    SS is many times seen as a welfare scheme because many people who never paid in are drawing and many draw out more than they ever paid in. To me it seems like it was designed to be a wealth transfer from men to women and workers to non workers.

    In my eye it becomes welfare the second you get more out than you put in. Men who have jobs and die young are drawing out less than they paid in ( not welfare to them) and women (live 10 years longer than men) and children are drawing out more than they have or ever will pay in (extreme welfare).
     
  12. latemetal

    latemetal Gold Chaser Platinum Bling

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    I disagree, I put in "expensive dollars" now and I get back "cheap dollars" later, inflation being the real problem all along. No Inflation and the pension problem solves itself.
     
  13. Joe King

    Joe King Gold Member Gold Chaser

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    Yea, but the gov wants us to think that all the dollars to count the same.

    Yep, which is why I've said before that what we need/needed was and is a slow and gradual rate of deflation over the course of time. If we had that, it'd be easy for everyone to save for their retirement, but that would cut out all the middlemen we are currently forced to deal with.
     
  14. oldgaranddad

    oldgaranddad Gold Member Gold Chaser Site Supporter ++

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    Your Pension Will Be At The Center Of America's Next Financial Crisis

    ...the next financial crisis that rocks America won’t be driven by bankers behaving badly. It will in fact be driven by pension funds that cannot pay out what they promised to retirees.

    http://www.zerohedge.com/news/2017-03-25/your-pension-could-be-center-americas-next-financial-crisis


    ...the PBGC guarantees a certain amount that is decidedly lower than your full pension — as members of the Road Carriers 707 pension fund learned when the group “protected” their pensions by helping to pay benefits, which had been reduced from $1,313 per month to $570.
    ....
    For instance, the U.S. Treasury denied a cut to New York Teamsters’ pension plan that was proposed last year. But now the fund is on the brink of collapse, and its recipients are facing benefits that are in some cases one-third what they were 15 years ago.

    Like Social Security, current workers can’t contribute enough to offset the big obligations owed to retirees
     
  15. searcher

    searcher Mother Lode Found Site Supporter ++ Mother Lode

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  16. searcher

    searcher Mother Lode Found Site Supporter ++ Mother Lode

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    The Coming Pension Tsunami
    Silver Fortune



    Published on Mar 28, 2017
    You've been warned; prepare accordingly. For years now, countless pensions have been teetering on the edge of collapse. In fact, in the last few months, pensions in Dallas, Chicago, and other places have begun to fail. However, these isolated failures are just the beginning. Pensions have increasingly invested in the stock market, commercial real estate, and other risky investments (that happen to be in a bubble), and have decreased their holdings in bonds, cash, etc. Despite this, they have still been unable to make the returns on these investments that they promised. As these asset bubbles collapse, we can expect these pension funds to follow suit, in cascading fashion. This will cause millions of retirees to lose some or all of their pension payouts, and will significantly slow the economy as a whole. This tsunami has almost reached shore, and it's time to find high ground in safe investments, including precious metals.

    Pension Tsunami Website: http://www.pensiontsunami.com/

    Enjoy my videos? Donate in Bitcoin: 1P94S6U6Upob4gjH1HwfnNcYqGmW2gUbr1
     
  17. Alton

    Alton Gold Member Gold Chaser

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    pension_cartoon1.jpg

    Oddly enough and not by personal design this next pic follows the above pic in my folder:
    PitchforksRope.jpg
     
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  18. searcher

    searcher Mother Lode Found Site Supporter ++ Mother Lode

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    REALIST NEWS - 10% Market Decline Will Cause Public Pensions To Blow Up
    jsnip4



    Published on Mar 31, 2017
    Today's Playlist: https://www.youtube.com/watch?v=4jxl1...

    Article: http://www.zerohedge.com/news/2017-03...

    Donate to support the show: https://www.paypal.com/cgi-bin/webscr...

    Bitcoin Donation: 151w21QWRTAdKKXh8aKFmn6hBNvTman9V7
    QR Code: https://www.realistnews.net/QRCode.png

    http://www.jmbullion.com/?utm_source=... (Recommended for Silver and Gold Purchases.)

    http://www.realistnews.net
     
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  19. searcher

    searcher Mother Lode Found Site Supporter ++ Mother Lode

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  20. searcher

    searcher Mother Lode Found Site Supporter ++ Mother Lode

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  21. searcher

    searcher Mother Lode Found Site Supporter ++ Mother Lode

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  22. searcher

    searcher Mother Lode Found Site Supporter ++ Mother Lode

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    Welcome To The Third World, Part 23: Honest Pension Returns Equal Mass-Bankruptcy

    By: John Rubino



    -- Published: Monday, 10 April 2017

    Last year the California Public Employees’ Retirement System, otherwise known as Calpers, cut the expected return on the funds it invests for plan beneficiaries from 7.5% to 7%. Seems like a modest change that should have a correspondingly limited impact on all concerned, right? Alas, that’s not how things work in the realm of compound returns, where small initial changes produce hugely different outcomes. In fact, this is a bankruptcy-level event for some California cities.


    California Cities’ Pension Tab Seen Almost Doubling in 5 Years
    (Bloomberg) – California cities and counties will see their required contributions to the largest U.S. pension fund almost double in five years, according to an analysis by the California Policy Center.

    In the fiscal year beginning in July, local payments to the California Public Employees’ Retirement System will total $5.3 billion and rise to $9.8 billion in fiscal 2023, according to the right-leaning group that examines public pensions.

    The increase reflects Calpers’ decision in December to roll back the expected rate of return on its investments. That means the system’s 3,000 cities, counties, school districts and other public agencies will have to put more taxpayer money into the fund because they can’t count as heavily on anticipated investment income to cover future benefit checks.

    Calpers hasn’t calculated the dollar impact of reducing the investment return over the years, said the group, which derived its estimate from guidance the system sent in January.

    Including the costs paid by cities and counties that run their own systems, the fiscal 2018 tab will be at least $13 billion to meet retirement obligations for public workers, according to the analysis, which is based on actuarial reports and audited financial statements.

    Barring any changes to pensions, “several California cities and counties will find themselves forced to slash other spending,” the group wrote in its report. “The less fortunate will simply be unable to pay the bills they receive from Calpers or their local retirement system.”

    Some thoughts
    Most cities and counties are already stretched to the limit with their current budgets. So, as the above article notes, a doubling of required pension contributions will leave only a handful of possible responses: Either they close libraries and parks, lay off teachers and firefighters and let potholes go unfilled, which lowers residents’ quality of life. Or they raise taxes dramatically, which also makes life harder for all concerned.

    Or they declare bankruptcy and slash pension benefits, which decimates quality of life for retired teachers, cops, etc.

    All because of a 0.5% drop in expected returns – to a level that is still unrealistically high. If 5% is the eventual number the financial markets impose on the system, then the situation described here will seem like the good old days.

    And California pensions aren’t worst-in-class. That distinction belongs to Illinois:


    Analysis: Pension fiasco spells future trouble for Illinois
    (Madison Record) – The state’s mountain of retirement-related debt is $267 billion, up from $203 billion in 2010, according to new analysis from the Illinois Policy Institute.

    Researchers for the institute found that if broken down per household, the debt owed would amount to $56,000 per family – what could essentially amount to a year’s net income for future taxes just to pay off old state and local retirement debts.

    The pension debt breakdown is $129.9 billion in state pensions; $56.7 billion in state health benefits; $56.9 billion in local pensions; $12 billion in state pension bonds; $9.8 billion in local health benefits and $1.9 billion in local pension and benefit bonds.

    Experts say the amount Illinois owes is a figurative fiscal time bomb that if left untreated could mean insolvency for the state.

    “If this problem is not addressed municipalities in Illinois will likely go bankrupt and put the state itself at risk,” Michael Lucci, vice president of policy for the institute, told the Record.

    Many workers today retire younger in their 50s after 30 years of service and receive free retirement health insurance and full benefits for life. According to the institute, the average pension is worth $1.6 million.

    The state’s pension debt has been growing in recent years, having gotten profoundly worse during last decade’s recession.

    “The state makes payments on the debt every year, but it’s less than the interest, which grows the debt,” Lucci said. “Even if there was no recession of 2007, we would not be as far behind, but we would still be in trouble.”

    A federal bailout is looking inevitable at this point, which means trillions of new liabilities dumped onto a national debt that has already quadrupled in the past 16 years.

    http://news.goldseek.com/DollarCollapse/1491853556.php
     
  23. searcher

    searcher Mother Lode Found Site Supporter ++ Mother Lode

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  24. latemetal

    latemetal Gold Chaser Platinum Bling

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    Rethuglicans involved, hmmmm.
     
  25. edsl48

    edsl48 Silver Member Silver Miner

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    FDR created the ultimate ponzi scheme when he instituted Social Security. He was able to provide plenty of vote buying funds paid for by taxpayers and I have no doubt in my mind that he knew it wouldn't work in the long run. However I feel that FDR felt comfortable in Keynes comment about the long term being "In the long run we are all dead." This worked perfect for FDR. He got his vote buying funds and when the house of cards fall down he is dead and will suffer no repercussions.

    Change the above and put in any other names of politicians that offered pensions to public workers. The can has been kicked down the road just about as far as it can go as we live in the age of "the long run."
     
  26. searcher

    searcher Mother Lode Found Site Supporter ++ Mother Lode

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  27. Goldhedge

    Goldhedge Modal Operator/Moderator Site Mgr Site Supporter

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    Remember? The old folks said, "Stay out of the stock market!" and "Don't put your money in banks!"
     
  28. searcher

    searcher Mother Lode Found Site Supporter ++ Mother Lode

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    MULLANE: In the Land of Giants, a rebuke for Dapper Mike


    Faced with a looming catastrophe of a $74 billion unfunded pension debt, Pennsylvania’s political class reclines on its plush paychecks and sweet perks and offers us no serious solution.

    However, when one of these Harrisburg elites berates a state-provided security team and taxpayer-funded house servants, no less than Gov. Tom Wolf hops to, driving out to personally express his deep distaste.

    Yes, when it comes to leadership, Pennsylvania is, as Steve Lopez said, a "Land of Giants."

    The "Downton Abbey"-esque drama played out last week between Wolf, a Democrat, and Lt. Gov. Mike “Dapper Mike” Stack, also a Democrat.

    He’s Dapper Mike because he once made PoliticsPA’s list of “best dressed” state lawmakers. “Sharp and dapper,” the website cooed. “Pays particular attention to his footwear.”

    Too bad Stack didn’t pay particular attention to his mouth, which he used to demean state cops and house servants provided to him courtesy of We, The People of Pennsylvania.

    After months of complaints, Gov. Wolf took an unprecedented step last week and stripped Stack and his wife, Tonya, of their state police security detail. The governor also withdrew the full-time assistance of two state employees who “manage” the Stacks' state-provided house in Fort Indiantown Gap, northeast of Harrisburg.

    In his April 21 letter, which he personally hand-delivered to Dapper Mike, Gov. Wolf writes: “Effective immediately, you and Mrs. Stack will no longer be afforded the protective detail provided to you as a courtesy by the Pennsylvania State Police. In addition, the Department of General Services will provide limited cleaning, grounds keeping, and maintenance at the State House and only under supervision at pre-arranged times.

    “I do not delight in this decision,” the governor continues, “but I believe it is a necessary step to protect Commonwealth employees.”

    Dapper Mike called reporters to his office two days before Wolf delivered his letter, apparently trying to do pre-damage damage control, since he and Mrs. Stack are allegedly under investigation by the Office of the Inspector General. The investigation is presumably to document what the Stacks said and did to the employees who were assigned to protect and serve them.

    Rich, isn’t it? Mike Stack, a former state senator from Northeast Philadelphia, along with Pennsylvania’s political class, can mortgage the futures of millions of Pennsylvanians with disastrous decisions that have pension debt rising at a rate of $172 per second. But if they verbally abuse the hired help? Why, a fuming Gov. Wolf steps up, beats his sunken chest, and tells his fellow elites, “Step back, boys. I’ll handle this one.”

    The kicker is that most Pennsylvanians don’t know who the lieutenant governor is, what he does or that he is paid about $170k a year to do it, in addition to an estimated $450,000 a year it takes to provide security, a house and servants.


    If only Gov. Wolf’s letter had said, “Look, twinkle toes, you and your dapper footwear can hoof it back to Northeast Philly, from where you can drive yourself to Harrisburg every day. And clean your own damned toilets. You need security? Get a gun like every other anti-gun Democrat in this state.”

    The specifics of what the Stacks did to their staff that earned them Wolf’s swift, sharp rebuke isn’t clear. But the Pittsburgh Post-Gazette, citing three sources, reported last week: “The complaints about the Stacks’ behavior began more than six months ago, the sources said. Among them were that the Stacks would get unreasonably and profanely angry when State Police troopers assigned to drive them refused to turn on their state-issued vehicle’s flashing emergency lights to cut through traffic and get to events more quickly.”

    Apparently, the Stacks wanted lights and sirens switched on so they could barge through traffic jams around Philadelphia during the Democratic National Convention last July, while the rest of us mopes simply waited patiently.

    Now, it would be nice if Wolf, Stack and the rest of the state political apparatus, which can't tolerate verbal mistreatment of low-level state employees, would expend a similar effort to resolving the pension crisis, which threatens to wreck the state's economy, increase taxes and cut state services. We will become New Jersey West.

    To see them do something is fraught with risk, though. The last time they tried to fix things with pensions, in 2010, they came up with Act 120 which was supposed to reduce the then $40 billion in pension debt. Instead, they've nearly doubled it.

    This is because we are led by a college-educated political class that is stupid, weak and lazy.

    The little problems they can solve. The big one, not so much.

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    J.D. Mullane's column appears in the BCCT Sunday, Tuesday and Thursday and in the Burlington County Times on Wednesday. Reach him at 215-949-5745; email: jmullane@calkins.com; Twitter: @jdmullane

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