This Tiny Corner Of Rhode Island Shows Us The Future Of Social Security

Authored by Simon Black via SovereignMan.com,

The United States Court of Appeals for the First Circuit gave us an interesting glimpse of the future last week when it ruled on an obscure case involving government pension obligations.

 

Ever since the mid-1990s, police officers and fire fighters in the town of Cranston, Rhode Island had been promised state pension benefits upon retirement.

But, facing critical budget shortfalls over the last several years that the Rhode Island government called “fiscal peril,” the state legislature voted to unilaterally reduce public employees’ pension benefits.

Even more, these cuts were retroactive, i.e. they didn’t just apply to new employees.

The changes were applied across the board; workers who had spent their entire careers being promised certain retirement benefits ended up having their pensions cut as well.

Even the court acknowledged that these changes “substantially reduced the value of public employee pensions provided by the Rhode Island system.”

So, naturally, a number of municipal employee unions sued.

And the case of Cranston’s police and fire fighter unions made it all the way to federal court.

The unions’ argument was that the government of Rhode Island was contractually bound to pay benefits– these benefits had been enshrined in long-standing state legislation, and they should be enforced just like any other contract.

The state government disagreed.

In their view, the legislature should be able to change laws, even retroactively, whenever it suits them.

Last week the First Circuit Court issued a final ruling and sided with the state of Rhode Island: the government has no obligation to honor its promises.

News like this will never make major headlines.

But here at Sovereign Man our team pays very close attention to these obscure court cases because they often set very dangerous precedents.

This one certainly does. Because Social Security is in even WORSE condition that the State of Rhode Island’s perilous pension system.

We talk about this a lot in our regular conversations.

According to the Board of Trustees for Social Security (which includes the US Treasury Secretary, the US Secretary for Health & Human Services, and the US Secretary of Labor), the Social Security trust funds “become depleted and unable to pay scheduled benefits in full on a timely basis in 2034.”

Once again– that’s the Treasury Secretary of the United States saying that Social Security will run out of money in 16 years.

You’d think this would be shouted from the rooftops, especially given how long it takes to save for retirement.

Yet instead the news is ignored or flat-out rejected by people who simply want to believe either that it’s not a problem, or that the government has some magical solution.

The First Circuit just showed us what the solution is: cutting benefits.

And now the government has legal precedent to do so.

They can retroactively slash whatever benefit they want in their sole discretion regardless of what legislation exists, or what promises have been made in the past.

Let’s be smart about this: the clock is ticking. Sixteen years may seem like a lifetime away, but with respect to retirement, it’s nothing.

Securing a comfortable retirement takes decades of careful planning, and a lot of folks are going to have to catch up.

Fortunately there are a lot of options available, but you’re going to have to take deliberate action.

For example, you could set up a more robust structure to help you put away even more money for retirement and invest in safer, more lucrative assets that are outside the mainstream.

A number of our readers, for example, are safely earning double-digit returns in secured, asset-backed lending deals with their properly structured IRA and 401(k) vehicles.

Here are a couple of options to consider.

This problem is completely solvable. But you’re going to have to solve it for yourself. You can’t rely on the government to fix it.

The First Circuit Court affirmed last week without a doubt that government promises aren’t worth the paper they’re printed on.

*  *  *

And to continue learning how to ensure you thrive no matter what happens next in the world, I encourage you to download our free Perfect Plan B Guide.

 

Tags
Social Issues
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Comments

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NoDebt Feb 5, 2018 9:52 PM Permalink

"You fucked up.  You trusted us."

What every pensioner should get used to hearing the next 20 years.  YOU'RE NOT GETTING PAID, MOTHERFUCKER!  They need to spend the money on the NEW voters who want ever expanding services and bennies of their own.  Old promises will be swept aside.

Why?  Because of this:

"Last week the First Circuit Court issued a final ruling and sided with the state of Rhode Island: the government has no obligation to honor its promises."

Government supports government.  Always.  And that's how this "public pension crisis" will be resolved in little bits and pieces over the next two decades.  By walking away from the lying promises of politicians who aren't even in office any more in favor of the lying promises of the new politicians.

In short, utopia.  As was always promised.

 

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38BWD22 zorba THE GREEK Feb 5, 2018 10:26 PM Permalink

 

How interesting.  What interesting times!

Looks like, maybe, THIS is the time when that new/old saying comes into play?:

"Shit's starting to get real."

For condo-living, older city folk, we are almost as prepared as is possible (reasonable).  If this is "it", we have a few days more, perhaps not much more than that.

Then again, maybe this is all just a scare.................  I sure as hell don't know.

But, big fat pension promises are now starting to die, see Illinois and now Rhode Island.  Yes, there are lessons here.  As NoDebt more-or-less wrote above, pension promises are worth very little in a crunch.  This may be Crunch Time.

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Oldwood zorba THE GREEK Feb 5, 2018 10:34 PM Permalink

The entire point is to create dependency and dependency is not created out of kindness but out a a desire to control. Once dependency is established then restrictions of supply are necessary to set the hook and establish exactly WHO is in power. Even a dead squirrel knows these promises were never sustainable, but the lure of an excellent lie was simply too much to resist.

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Endgame Napoleon zorba THE GREEK Feb 5, 2018 10:34 PM Permalink

Ughhhh, there is another option. Instead of just taxing peons who are paid under $127,200 per year on every penny earned at either 7.65% (employee) or 15.3% (self-employed), we can tax people—even the dual, high-earner parents who are “the talent” and needed at work, but are on an excused babyvacation every other month—on income above $127,200 per year. 

Here is another option: We can stop paying millions of legal and illegal immigrants to have sex and reproduce by covering their major monthly bills with more welfare, the more US-born kids they produce and with now-doubled, refundable child-tax-credit welfare up to $6,444. Many of the illegal alien consumers of monthly welfare are working under the table, not contributing to the SS-retirement fund. 

Here is another bigly option: Stop accommodating the global offshoring of jobs that has resulted in the loss of over 2 million SS contributors as well as depriving whole generations of young people of middle-class jobs. This is done so that diversity-bible-thumping elites can employ a low-cost, foreign workforce that is not at all “diverse” in their factories, while inporting tons of low-wage immigrants to fill any jobs left here, too. 

You might say corporations will flee abroad. Maybe, they will take their families abroad, becoming citizens of foreign countries who will tax them, likely not choosing to put the financial interests of American corporate exiles and their families ahead of their own native-born citizens, whether those are highly placed or lowly placed citizens. 

Of course, some cuts will have to be made to all of the many programs, not just SS, which we paid into with significant chunks of measly, earned income, but also to the 100%-free pay-per-birth welfare for citizens and noncitizens to reward sex, reproduction and part-time work that keeps them below the earned-income limit for monthly welfare in traceable income in the case of illegals and the cut off for refundable child tax credits.

If employers paid more, and if they hired more American citizens full time, we would have more money coming into the SS-retirement fund coffers.

We can’t have that.

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cro_maat yogibear Feb 6, 2018 12:21 AM Permalink

Endgame Nap - How about this:

  • .GOV admits that the SS system is a ponzi scheme
  • that there is no SS Trust Fund
  • that all of the SS $ put in have been "invested" in USSA bonds which have funded wars
  • MSM covers the annual funding of "benefit" payments that Congress does every year and MSM points out that the $ are always appropriated
  • .GOV admits that SS is voluntary and makes it easy for every USSA camp resident to resign and get their $ back
  • The BLLC (Black Lodge Legal Collective) stops blackballing Americans at corporations who have given up their USSA work camp #
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MK ULTRA Alpha Catullus Feb 5, 2018 11:54 PM Permalink

Seems strange, Jews are pumping to end social security. Greenspan, Stockman and Rivlin, all believe Social Security must end. All  foam at the mouth about ending social security, and they don't plan on giving the money we paid in to social security back.

The propaganda is it's broke, no it's not. The social security owns over $3 trillion in US debt. The US government pays dividends on that debt and that is used to pay the monthly payments.

But on here we have people parroting their programming that there is nothing being held in social security except worthless IOU's.

Jews caused the panic in the markets. Greenspan, then Katz, next Yellen who said there were no problems, no bubble etc. now bad mouths the market. It was a signal to Jews to run for the exit.

And Republican Senators mainly TV heads parroting their programming, say, the first day of the next Trump term, Trump will end social security.

Congressman Ryan foams at the mouth for ending social security.

Well what happens to all these people who paid into it all of their lives? I think we're headed for a show down between the people in this country and the government. Trump should have terminated federal workers and lowered the size of the federal government, instead of cutting social security to pay for the tax cut. Because of this, and the BIG MOUTH Republican senator, there is no way in hell I can vote for someone going to rob me of what I paid into social security.

I will not vote for Republicans in Trump's second term because they've made it clear, social security is to be abolished.

 

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in4mayshun NoDebt Feb 5, 2018 10:58 PM Permalink

I’m not saying I agree with the ruling, but let’s think this thru....

suppose the courts took the other position and forced the public pension to pay stated benefits; where does that money have to come from if the pension is broke? Ya, they’d have to force tax payers to pay even more money to support ridiculous pension promises. Is that fair to the tax payers? Of course it isn’t. So while I do agree that the government workers kinda got hosed, the court ruling that a public pension an go broke and reneg on promised benefits might have been the lesser evil, and therefore the correct decision. 

Maybe his will force future pension managers to be more careful about how they invest.

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cro_maat in4mayshun Feb 6, 2018 12:30 AM Permalink

The top echelon of any state pension is a State appointed official who usually has little or no finance experience. They are a political appointee. If they fail to grow assets faster than liabilities, and the debt load crashes the system on their watch then they should go to debtor's prison.

Maybe we should try the Turkish debtor's model where they have to prostitute themselves until the debt is paid. Its not like they would need training.

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MK ULTRA Alpha Xscream Feb 6, 2018 12:22 AM Permalink

We're screwed. I started paying into social security when the quarters and dimes were made of silver.

Social security is on the chopping block, but the massive growing federal government isn't being cut back. The tax cut has to be paid for by cutting social security.

Even the national debt is a lie, we only owe $13 trillion out of $20 trillion because the government owns part of the debt. Social Security owns around $3 trillion in US government debt and the government must pay dividends on that money.

The propaganda lies about social security are used to justify abolishing social security. We won't see cuts, we're going to see the end of social security only because of the $3 trillion social security treasure. They went for the silver, now it's social security. And who's they, it's strange the Jews pump abolishing social security and get good media coverage, but no one gets media coverage defending social security and explaining about the $3 trillion in social security.

 

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MK ULTRA Alpha MK ULTRA Alpha Feb 6, 2018 12:29 AM Permalink

Another thing to laugh about, we all gave around three years of our labor to social security, now that too is to be stolen.

What is it with the Jews rolling the economy over and over, beating the last dime out of the people, beating them down into one class, one dirt poor class.

Out of over 600 billionaires, half are Jews, that can be said of all the top wealth brackets. The Jews have systematically transferred wealth to the top and they're now the top. So naturally, social security must be abolished and the money stolen.

It doesn't matter what we say, it's because the Jews control the country. All we can do now is pray for a nuclear war to kill off enough people so we can be free. They deserve it, and that's not something bad to say after what I've seen.

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TrustbutVerify NoDebt Feb 5, 2018 11:58 PM Permalink

But it must be said, the pensioners who believed the promises were just so stupid.  They and their fake news pals (its been going a long time, folks) and other government cronies shouted down anyone mentioning the unsustainable realities of the pension system.  

These pensioners, or soon to be, still think those that were telling them the truth are their enemies.  They still buy the same newspapers, watch the same nightly and cable news channels, and admire the same late night liberal hipster "comedy" show hosts, watch daytime women's talk shows. And they're shocked at what's happening.  

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JimmyJones ted41776 Feb 5, 2018 10:48 PM Permalink

The the main issue, what Dems consider sound capital investments and float municipal bonds (debt) to pay for are pie in the sky BS liberal idiot things. Total wast and it just increases debt. Dems treat capital expenses like operation expenses. Eventually the music stops and your bankrupt. I wonder how much of the Rhode island budget goes towards debt service? Bet that gets paid, and paid on time if not early.

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NoDebt Rjh Feb 5, 2018 9:59 PM Permalink

It also coincided with the installation of a new Trump-nominated Fed Chair.  And the revelation that Hillary people colluded with Russians to give Steele the information to put in his "Trump Dossier".  And the collapse of several VIX-short EFTs/ETNs just this very evening.  Your point?

 

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Endgame Napoleon NoDebt Feb 5, 2018 11:01 PM Permalink

It also coincided with these things:

  • the beginning of an interest-rate hike cycle;
  • a barely perceptible uptick in wages;
  • the horror that corporations might be deprived of their cheap, welfare-fueled, pay-per-birth illegal alien workforce that can accept low pay due to monthly welfare that covers their rent and groceries and now-doubled child tax credits, although they probably won’t, as the DACAs will still be here, either way;
  • some drops in retail sales despite all the “consumer confidence” reports and the debt-financed Christmas spending;
  • record debt in auto loans and student loans;
  • $20 trillion in national debt;
  • $230 trillion in global debt.
  •  

However, to the MSM script writers who thrive on a spy-novel suspense narrative, the release of THE MEMO was surely the trigger of the stock collapse.

Come to think of it, The Memo would make a great movie title. I guess Robert Redford and Dustin Hoffman are too old to play the heroic MSM, saving the day, not by addressing the boring issues above — EVER — in their newscasts, much less even more boring and inconvenient topics, like 50 million working-aged citizens out of the workforce or 43 million workers whose grocery bills are paid by government.

That is because they are counted as “employed,” when they only work part time to stay below the earned-income level for monthly welfare that covers their rent and groceries and the cut off for refundable child tax credits that topped out at $6,444 before doubled by RepubliCON & DemoRAT Uniparty Swamp Creatures.

Their child tax credits equal 1/3rd of the yearly take-home pay of many full-time workers across the South. Those workers mostly are not eligible for unearned income from government, and many lack spousal income to help with rent that consumes more than half of their earned-only income..............The MEMO — MEMO I and MEMO II, the sequel — will reveal the dreaded, “treasonous” activities, generating more ratings between the sex-scandal ratings boosters than these boring economic issues.