Good News: Billionaire Warren Buffett Warns of Looming Decade Long Pension Crisis
Billionaire Obama loyalist Warren Buffett put out a report over the weekend. : Buried deep on page 21 was a warning.
There’s trouble coming, and it’s not going away soon:
“Local and state financial problems are accelerating, in large part because public entities promised pensions they couldn’t afford,” Buffett, the chairman of Berkshire Hathaway Inc., said in a: letter to shareholders. “Citizens and public officials typically under-appreciated the gigantic financial tapeworm that was born when promises were made that conflicted with a willingness to fund them.
“Unfortunately, pension mathematics today remain a mystery to most Americans,” Buffett said.
“During the next decade, you will read a lot of news — bad news — about public pension plans,” he added. “I hope my memo is helpful to you in understanding the necessity for prompt remedial action where problems exist.”
Detroit cited a $3.9 billion deficit in its pensions when it filed for bankruptcy last year. Its emergency manager, Kevyn Orr, estimated that pension and retiree health-care liabilities made up half of the city’s $18 billion in debts cited in the July bankruptcy filing.
In fact, local officials in at least 10 states from New York to California now are trying to cut the pensions of municipal workers – or eliminate the plans outright –: pointing to Detroit’s bankruptcy: as an example of what could happen with spiraling retirement costs amid a struggling economy.
Oh, that’s perfect.
And what was Obama’s response to Detroit?
Two months after Detroit became the largest city ever to file for bankruptcy, top Obama administration officials will be there on Friday to propose nearly $300 million in combined federal and private aid toward a Motown comeback – only a fraction of the billions the city owes and a reflection of the budget and political limits on: President Obama.
Let’s hope those cities can hold themselves together until Obama’s out of office. : Otherwise, we’re going to be throwing good money after bad all across the country.
Duane Lester is co-founder of All American Blogger, and the primary writer. Following graduation, Duane entered the United States Navy as a journalist. He spent five years touring the world, reporting on local news and sports. Following his enlistment, Duane spent almost 10 years working with adjudicated youth in residential treatment environments. Duane discovered politics after September 11. He credits Erich "Mancow" Muller for opening his eyes to his conservative beliefs. Since then, Duane has devoured books and literature on politics, reading everything he can from Adam Smith to Larry Elder to Thomas Sowell. He refers to his style of politics as "conserva-tarian", a mixture of conservative and libertarian beliefs.