One must wonder if Elliot Spitzer is an EP lurker. Today Spitzer wrote a column about how states are headed for disaster. The post has statistics which were outlined by manfrommiddletown a few days ago.
Or is it more many of us are astutely aware of coming implosions, trying to warn and show repeatedly, like some 3rd mind, a conscious social brain, all examining trends and data who end up screaming bloody murder in synchronous unison....
a glorified Cassandra group speak yelp spike?
Whatever the reason, one must congratulate manfrommmiddletown in writing such a relevant post, complete with maps and also be grateful Spitzer is emerging from his personal fallibility cave to come out with guns ablazin'.
What is frightening is Spitzer's solution, which is to dramatically cut new employees pensions. Now where have we seen this before, to deny retirement to an entire generation as if nothing has happened...a ticking time bomb 30 years later for all of the aged with no resources?
Two critical areas must be addressed. First, public pension liabilities have to be restructured. Since many state constitutions prohibit retrospective realignments—that is, lowering pensions that have already been guaranteed—states will need to lower guarantees for new employees radically, shifting from defined benefit plans to defined contribution plans.
Second, and more fundamentally, states will need to shift more funding of health care and education to the federal government. In health care, where Medicaid is the primary state expenditure item, there currently exists a federal-state burden sharing arrangement. As the health care reform process continues in D.C., Washington must recognize that requiring greater state expenditures is simply not realistic at this time.
Spitzer also notes the California IOUs instantly created yet another Wall Street Trading Market.
For those who were worried that Wall Street had perhaps lost its creative juices after its recent spasm of busts and bailouts, fear no more. At the beginning of the month, California ran out of cash and began issuing funny-money IOUs to its creditors. As soon as that happened, the smart guys on Wall Street created a whole new market trading the IOUs. No doubt the IOUs will soon be bundled into more exotic financial instruments, which will be cut up into tranches, graded lazily by the ratings industry, and sold off to unsuspecting investors in Abu Dhabi and Helsinki.
What a perfect metaphor for our economic circumstances! California is literally drowning in red ink and political gridlock, with deficit figures that are staggering and portend worse news for the future at the same time that a bailed-out Wall Street is profiting from a new, and essentially useless, trading vehicle.
Lovely, if only American Engineers were enabled to be so creative and actually get truly compensated for the effort! Imagine what would happen if those who create real products, innovate entire new economic sectors... were not continually under attack in their careers by being laid off, their jobs offshore outsourced, age discrimination and use of foreign guest workers to displace them!
Why is our economy like high school? The scam bullies win and the geeks get pushed around? Come on, anybody can trade IOUs, the same as trading baseball cards in the playground. There is no real economic growth in this hot potato game.
In all seriousness, Spitzer is also mentioning manufacturing in an interview on Goldman Sachs and what we need much more of.
How about investments like this new Venture Capital Group, investing in Silicon valley for every state in this nation? Enable the geeks, small business, manufacturing and then we might have a chance of digging out of this hole!