Tag: Inability to grasp economic reality

Let it burn…

So as was expected, Puerto Rico defaulted on a debt payment for over $70 billion in outstanding debt. From the article:

Puerto Rico, whose residents are U.S. citizens, has been mired in recession for a decade and borrowed heavily to balance budgets. Despite the shaky economy, investors snapped up its debt for years thanks to generous tax incentives. The borrowing spree, however, did little to create economic opportunity on the island, and residents have steadily left for employment on the U.S. mainland, eroding Puerto Rico’s tax base.

So this problem was caused by leftist government that wanted to spend more than the economies they crippled could sustain, to buy votes of all reasons, borrowed massive amounts of money to balance their budgets. Does this sound familiar to you at all? At least some Puerto Ricans affected by this stupidity had the ability to skip town and go to the US, whether it was to find gainful employment or just move to some blue state and suck at the government’s teat there, to avoid the catastrophe. Where are those of us in the US going to go when we face this reality?

Government economic policy that is set up to make participants in any economy dependent on buying favors from the members of said governments, always end up producing pain and do little to produce economic growth. But it sure makes a lot of connected people wealthy and in turn puts a large amount of cash into the campaign coffers of the political class that has implemented this machine. Hence, despite the massive debt buyout in Puerto Rico, there was no economic benefit. Again I ask, does this all look familiar to anyone? It seems quite obvious that what we are seeing in Puerto Rico can directly be inferred as the future of many US blue states as well as the US economy in general under the Obama administration.

Back to this issue at hand. As the article points out, republicans rallied by Paul Ryan in congress are pushing legislation that would restructure Puerto Rico’s debt. My concern is that this is nothing more than a totally temporary bandaid solution, and that it will not only not fix the underlying issue, which is that these fuckers will keep borrowing to buy votes and do nothing that would fix their abysmal economic conditions, but just delay the inevitable: Puerto Rico basically asking the US tax payer to foot the bill for all the squandered money. I feel this way because of news like this. And once Puerto Rico gets what amounts to a bailout, you can bet that Illinois, California, and every other blue state out there that has the same model of borrowing so they can spend on vote buying while all that spent money does nothing to improve economic conditions in general, will all show up in DC and ask for the same.

Whatever crap congress puts together should also destroy the blue state economic model as it exists today. Without that, we are just pushing the problem out and increasing the final cost of bailing out these idiots. The blue state model needs to die before it kills the country as a whole.

The liberal solution: take 125537899

In the people’s great city of Detroit, where credentialed liberal ideologues have been running the show for more than 6 decades, things have not been going so well. OK, I am fucking around when I act sarcastic like this. Detroit is a disaster of epic proportions. The left created an unsustainable model that robbed the tax payers and incentivized business to move elsewhere, while the elected officials pissed away any and all prosperity. So now that the proverbial shit is hitting the fan, they are facing though choices. There is no money. Sure, Obama sent them a few tens of millions of US tax payer dollars, to make sure they could delay the inevitable until it was less inconvenient for the democrats, but the writing is on the wall. The end is nigh.

Case in point the pensioners, which are getting gold plated payouts from a drastically underfunded, some might even say unfunded, pension system, and the looming pension cuts. There was a hard reality check that required the city to cut pensions by a minimum of a third, but it looks like the marcists found another candyland solution

Detroit doesn’t have any money. Rather, it doesn’t have enough money: It cannot both pay its debts and run the city. That’s why the city filed for bankruptcy some months back, over the outraged protests of pensioners who stand to lose a big chunk of their monthly checks.

Today, those pensioners are breathing a little easier. The city seems to have struck a deal that will leave their pensions in better shape than previously feared. Instead of cutting those monthly checks by as much as a third, the city will trim them by less than 5 percent.

How did they make such a big change? In part by assuming higher investment returns:

The city initially factored in rates of 6.25 percent and 6.5 percent for the two funds, but eventually agreed that the funds could be presumed to do better — 6.75 percent — because of an improved outlook based on the funds’ 2013 performance as compared with 2012.

The city also promises lower or no cost-of-living adjustments, and less in the way of retiree health benefits. And the proceeds from a proposed deal, not yet agreed upon, to save the Detroit Institute of Arts’ collection by soliciting a mix of state and private funds to pay off the pensioners.

Yeah, this ends well, I bet. America, pay close attention: Detroit is our future with these credentialed nanny state elitist scumbags in charge.