AMERICA IS INSOLVENT
By Betty Freauf
February 24, 2007
Are you as tired as I am about all this hype about non-important issues we’ve been hearing and reading about? Is it really the media’s duty to keep the adult public attention captivated by matters of no real importance and entertained below the sixth grade level? Please tell me Americans, in general, have not become so dumbed down that they enjoy hearing day in and day about this drivel such as Anna Nicole Smith and who her baby’s father might be, the Duke University lacrosse/stripper scandal, the constant barrage of Hollywood’s misfits checking their “politically incorrect” tongues into drug and alcohol rehab, their divorces, their illegitimate babies and their current live-in partners.
But where was the media in mid- December 2006 when the Treasury Department and the Office of Management and Budget reported that AMERICA IS INSOLVENT and unable to pay it’s bills with the current level of taxation and promised benefits. The report produced during the days leading up to the Christmas season, drew next to no attention. If it weren’t for Dr. Christ Martenson’s CMI Gold & Silver Newsletter, it might have been tossed into the nearest memory hole.
In a statement accompanying the report’s release, Comptroller General David Walker noted that the General Accounting Office found so many deficiencies in the government accounting system (sounds like PERS) that its officials were “unable to express an opinion” about the financial statements issued by the government. But Walker did say, “net social insurance commitments and other fiscal exposures continue to grow and now total approximately $50 trillion…up from about $20 trillion in fiscal year 2000.” He continued: “Given these and other factors, it seems clear that the nation’s current fiscal path is unsustainable and that tough choices by the President and the Congress are necessary in order to address the nation’s large and growing long-term fiscal imbalance.” Our combined federal indebtedness, including unfunded future obligations, now totals more than 400 percent of the entire gross domestic product.
Devvy Kidd in her excellent article “State Struggles to Cover Retirees” explains how many states are in trouble financially with their promised health care benefits to retired public employees and now are shifting that liability onto the federal government Medicare program. To its credit, a 12/18/2006 USA TODAY article tells of the bad news. And yes, Oregon does have the Comprehensive Annual Financial Reports where billions are buried in a second set of books and I’ve yet to find a legislator who knows about the CAFRs or is willing to expose them. Will the CAFRs eventually bail us out when push comes to shove?
SOME PUBLIC EMPLOYEES RETIRE AS MILLIONAIRES
A correspondent from Nevada says pension payouts to teachers from PERS are $750,000 and yet they want more. A New Hampshire correspondent says its Retirement System faces a $2 billion shortfall. Oregon’s PERS claims to be fully funded but it is only approximately 60% funded; however, actual figures are hard to come by from PERS. When a former Shearson Lehman (NYC) technical financial analyst (now self-employed and living in Oregon) asked PERS administrators what the capital requirement was necessary to fund a $53,000 a year single life annuity, he was told $565,000. To do the same thing in the private sector (Fidelity) $875,000 is required. That is a difference of $310,000. He says, “PERS is a leveraged account and this is gambling. In Economic history it is properly classified as a Swindling Scheme and they are counting on tax revenues to keep paying these pensions” The same holds true for Federal pensions, which are indexed to inflation so costs go up every year.
The Treasury report doesn’t line up with Bush’s State of the Union message and his budget. Rep. Jim Cooper of Tennessee, a Democrat crusader for honestly in balanced budgets, pointed out to The Washington Post’s columnist, David Broder, Table S-7 shows that the $61 billion surplus Bush claims for 2012 – using all the gimmicks he can find – is achieved only by counting on the $248 billion in anticipated Social Security surpluses that year to wipe out the $187 billion deficit rolled up by all the other activities of the federal government. (And all this time, we’ve been told Social Security is going broke but suddenly we have a “surplus.”) Broder writes, “In other words, Bush is borrowing (again) from Social Security to achieve his budget surplus, and that money will have to be repaid out of future taxes, or beneficiaries will suffer.” We all know there is no social security “trust” fund. It’s been robbed for years.
And then Broder writes about the dismal financial prospects for Medicare – another entitlement that the federal government should never have become involved not to mention the Bush’s Senior Prescription Drug Benefit fiasco and now the states want to drop their failed unfunded health care systems on the federal government Medicare program. Cooper says, “The happy talk from the White House will sap Congress’ will to tackle the entitlement issues.” But while the parrots on liberal talk shows blame Bush for this huge deficit, they forget nearly all these “social insurance commitments” began while the Democrats had control. Every since the election of Democrat FDR, and his nearly four terms as president, our once Republic has been gradually changing to a collective, tyrannical Democracy/Mobocracy. The Comptroller says commitments and other fiscal exposures continue to grow and now total approximately $50 trillion
But Broder reports in fiscal 2006, the past year, the total federal debt was $8.45 trillion. In 2012, by Bush’s optimistic estimate, it will reach $11.49 trillion. That is $3 trillion of added debt in just six years. Go figure! Folks, we are being lied to on a regular basis. America is insolvent and all our elected officials are doing is rearranging the deck chairs on the Titanic.
Which brings me to the subject of the Public Employee Retirement systems (PERS). While I can only write about Oregon’s bankrupt system, Thomas J. Healy of the Globe Newspaper Company, a retired partner of Goldman Sachs & Co., currently a senior fellow at Harvard University’s Kennedy School of Government and an assistant secretary of the Treasury under President Reagan wrote an article “The Ticking Time Bomb in State Pensions” dated November 28, 2006.
He states President Bush signed into law the Pension Protective Act of 2006 in an effort to strengthen the financial health of corporate defined benefit pension plans which are also in trouble. However, he writes, little attention is paid to a retirement sector in even greater financial straits: state government pension plans which are facing a $1.3 trillion shortfall that presents a serious threat to their very survival – as well as to every taxpayer in the country.
Let’s use Oregon as an example. In September 2002 our then Senate president Gene Derfler said the legislature didn’t have the backbone to address the deficit-ridden PERS that was facing a potential deficit of $7 billion to $8.5 billion. On February 8, 2007 an itsy-bitsy article about 200 words long in our local Statesman Journal said that Plansponsor, a trade journal focusing in retirement issues, awarded the Oregon Public Employees Retirement System its Plan Sponsor of the Year award for its strong investment returns and reforms that closed most of PERS’ $17 billion funding gap since the spring of 2003. So, as you can see, Oregon jumped from about an $8.5 billion funding gap in 2002 to a $17 billion gap about six months later. Now, just whose figures do we believe? Giving the newspaper the benefit of the doubt, perhaps it was a typographical error.
I sent a Letter to the Editor to the local paper about this huge gap several weeks ago. So far, no response. I have enough rejections from that local fish wrapper to wallpaper my office wall. I’ve contacted a radio talk show host who is heard all across Oregon and nationally. So far, no response. The Founders gave them the First Amendment to keep an eye on Big Brother but they use it to report nonsense.
Initiatives have been circulated to cut back on government spending and the union influence. People sign them and on election day they are passed – although sometimes not by a big margin because there are so many government employees that nearly can outvote the rest of us – but even a victory is short lived because the judges, who have a vested interest in PERS, are the water boys for the system. They find some reason to throw the initiatives out.
Greg Evensen in his article: WARNING: The End of America As We Know Is At Hand says, Americans have been set up and virtually sold out. Korean buyers are eyeing real estate in Los Angeles. A 1/8/2007 AP article indicated immigrants may invest as much as $4 billion in 2007. Our infrastructure is being sold to foreign countries and we are deeply in debt to countries like China.
A 12/18/2006 L.A. Times reported some homeowners are already living on borrowed time. Another article dated 2/2/2007 said more seniors are turning to reverse mortgages borrowing against equity. In that same paper another article said, “Rate of savings is lowest since 1933. People spent more than they earned in the past 21 months.” Many young families are struggling to make ends meet - some due to frivolous spending while others due to circumstances beyond their control. But when PERS faces bankruptcy in Oregon, they simply sell $2 billion in Pension Bonds that these poor people in the private sector, who probably have no retirement, will have to help pay.
I’m not advocating current public employees lose their retirement but what I am suggesting is that they take their money from PERS, invest it themselves and all new hires would be expected to set up their own personal retirement accounts.
In a letter discussing their new banking scheme with fellow conspirators on June 25, 1863, Rothschild Brothers of London stated: “The few who understand the system, will either be so interested in its profits or so dependent on its favors that there will be no opposition from that class. The great body of people, mentally incapable of comprehending the tremendous advantages will bear its burden without complaint.”
One unknown source asks:Do we wonder why so many Americans are being sucked dry and are losing their homes, farms and businesses each week? Is it just “cyclical (temporary) economic downturn” as the Establishment ‘experts’ and controlled media tell us? That is a fabrication to the 10th power. If any Officer doubts this after reading the preceding statements by the money parasites, it would be wise to consider this secret communiqué circulated among the leading U.S. Bankers only, way back in 1934, entitled,
“THE BANKER’S MANIFESTO”: “Capital must protect itself in every way…Debts must be collected and loans and mortgages foreclosed as soon as possible. When through a process of law the common people have lost their homes, they will be more tractable and more easily governed by the STRONG ARM OF THE LAW (Cops) applied by the central power of leading financiers. People without homes will not quarrel with their leaders. This is well known among our principal men now engaged in forming an imperialism of capitalism to govern the world. By dividing the people we can get them to expend their energies infighting over questions of no importance to us except TEACHERS FOR THE COMMON HERD. (Taken from the Civil Servants’ Year Book, “The Organizer, Jan. 1934)
Russel Munk, Assistant General Counsel, Department of the Treasury, in a 1977 letter admitted: “Federal Reserve Notes are not dollars.” Perhaps we should start stocking up on beans, bullets and gold. Even though the stock market recently hit another all-time high, as our government continues to print money to cover their bills without the backing of gold, inflation will skyrocket. These underfunded PERS accounts are 100 times bigger than Enron. PERS is nothing but a Ponzi scheme borrowing money to invest in a shaky stock market that the Plunge Protection Team, created by Ronald Reagan’s Executive Order 12631 in 1988, keeps manipulating. The only way we can turn this around is with public education and public outcry and soon! The house you save may be your own.
Document: Silent Weapons for Quiet Wars, P. 49 – Operations Research Technical
Manual TM-SW7905.1 located in Joe Spenner’s book: REGIONALISM, the Shadow
Behind Oregon’s LCDC
© 2007 Betty Freauf - All
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Betty is a former Oregon Republican party activist having served as state party secretary, county chairman, 5th congressional vice chairman and then elected chairman, and a precinct worker for many years but Betty gave up on the two-party system in 2004 and joined the Constitutional Party.
Please tell me Americans, in general, have not become so dumbed down that they enjoy hearing day in and day about this drivel such as Anna Nicole Smith and who her baby’s father might be, the Duke University lacrosse/stripper scandal...