On Fri, 16 Apr 2010 06:58:25 -0700, Larry Jaques
wrote:
snip
It appears under ERSIA and the PBGC, some of the pension
obligations of these local/state governments may fall back on the
American taxpayers in the case of bankruptcy/conservatorship, at
least up to the PBGC limits. It all depends how the state/local
governmental pension plans are legally structured and controlled.
FWIW -- it appears that many of these plans have been "skimmed"
and "looted" just like the private pension plans.

And we haven't heard of a clubbing, shooting, hanging, or
tar-and-feathering of these folks yet. Interesting.
snip
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While this would offer a large amount of satisfaction to many
people, in the overall scheme of things, this would accomplish
nothing, in that the basic/foundational problem of spending
[promising] more than the [falling] governmental income can
possibly cover is not addressed.

It is well to remember that the responsibility/accountability for
this problem has become so diffused that no one, other than
possibly some long-term elected officials and the scam artists
who work with them, can be held personally accountable.

It may well be that there is no "cure" in the sense that what we
are seeing is the natural evolution/development of human created
organizations. Old age and death are not pathological conditions
for living things, just the final phase, and this appears to also
be the case for artificial human constructs such as "government."

It does however appear that certain legislative actions would be
very helpful such as prescribing the maximum and minimum numbers
of governmental employees by function as a fraction of the served
population, minimum and maximum service levels for different
types/classes of governments, such as public safety, social
services and education, per capita spending caps adjusted for
inflation, minimum population, etc. Other useful limitations
could include min/max limits on the size of the municipal
governmental units by both land area and population.

One of the more critical areas is the enactment of laws mandating
the reconstitution of bankrupt municipal/county governments,
possibly at a *MUCH* lower level of services and expenditures,
with the total replacement of existing elected and appointed
officials, *AFTER* a period of direct state control with full
forensic audits and formal legal investigation to determine
exactly what went wrong (and where the money went).

It would appear that considerable improvement in debt management
could also be obtained by requiring a minimum of three bona fide
bids on governmental bond issuance, and the prohibition of credit
default and interest rate swaps, for federal tax exemption of the
municipal bond interest income. Another improvement would be the
replacement of the "custom" or "bespoke" municipal bond contracts
with a plain vanilla contract with standardized terms and
conditions. This would eliminate a considerable legal expense
and make the bidding process much easier.


When pigs fly....


Unka George (George McDuffee)
...............................
The past is a foreign country;
they do things differently there.
L. P. Hartley (1895-1972), British author.
The Go-Between, Prologue (1953).