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Geitner's Goal: Rebalanced World Economy

Another example of the Obama Administration using the yardstick of “fair”.

While talking about guidelines for world exchange-rate policies, Timmy Geitner tells the WSJ, “Right now, there is no established sense of what’s fair”. If that was not bad enough, this admission came during an interview where he discussed his desire to “advance efforts to ‘rebalance’ the world economy so it is less reliant on U.S. consumers”.

“Fair” and “Rebalance” are code words for redistribution of wealth. This has been a singular goal of Obama’s, which he admitted even while he was still campaigning.

And what does he mean about the world economy being “less reliant on U.S. consumers”?  This administration’s blatant disdain for America is disturbing. More ulterior motives here, which we need to keep an eye on.

http://online.wsj.com/article_email/SB10001424052702304011604575564661615005500-lMyQjAxMTAwMDIwMDEyNDAyWj.html

NYC Pensions: Too Much

Catching up on some old reading this weekend, I wanted to share Bloomberg’s wry observation of the current state of the NYC pension fund.

“It’s overstating it a little bit to say the only one who’s done that well is Bernie Madoff, but 8% for a long period of time is not something that very many pension funds have ever achieved.”

Gotta say, I love how Bloomberg (correctly) compares the pension fund to fraud. It’s just like Social Security, the biggest Ponzi scheme of all.

Because some content on Crains NY is subscriber only, I’m reproducing the article below. It’s a good read.

NYC pensions promise too much, mayor says

Mayor Michael Bloomberg says the defined benefits in the city’s pension plans are too expensive and will drive more municipal projects into the private sector.

(Bloomberg)-New York Mayor Michael Bloomberg said city pension funds have set unrealistically high assumed rates of return on investments, at 8%, which may require spending more than has been budgeted for retirement benefits.

“It’s much too high an assumption for us; I think it should be lowered,” Mr. Bloomberg said Monday at a news briefing. “That’s going to require the city to put in more money. It’s very difficult to see where we could get the money to do that.”

The city, which must balance its budget or face a state takeover of operations, has to close a $3.3 billion budget gap projected for fiscal year 2012, which starts July 1. The deficit is forecast to grow to $4.8 billion in 2014, a period in which officials expect pension costs to increase to $8 billion in 2014 from $7.6 billion now. Last month, the state pension fund cut assumed returns to 7.5% from 8%.

The real problem, the mayor said, is the pension system itself, which provides defined benefits that can’t be reduced under guarantees the Legislature has placed in the state constitution. While it permits new, less-expensive benefit tiers for future employees, savings wouldn’t be realized for 10 or 15 years, Mr. Bloomberg said.

“We’ve been trying to get the governor and the Legislature to vote a fifth tier,” Mr. Bloomberg said. “They won’t do it unless the unions ask them to.”

“The taxpayers don’t want to pay for it and the economies of the world don’t really support those kinds of plans anymore,” the mayor said.

Without a change, Mr. Bloomberg said, the municipal work force will shrink, because the city won’t be able to afford a payroll of the current size and cover retirement benefits at the same level as today. The city employed 302,436 in May, according to a mayoral spokesman.

“We’re going to try to farm things out to the private sector more because the municipal workers just cost too much,” the mayor said. “The bottom line is, you can see in this country, the public is frustrated, they don’t want to spend any more money.”

Representatives of city Comptroller John Liu, who acts as the steward of city pension funds, didn’t immediately comment on the mayor’s remarks.

The state’s $124.8 billion pension fund, the nation’s third-largest, reduced the assumed rate of return on its investments as it recovers from market losses, Comptroller Thomas DiNapoli said. Mr. DiNapoli, the sole trustee of the plan, said state and local government employers’ payments to the fund will increase to about 16.3% of payroll in February 2012, from 11.9% due in February 2011. The fund covers 1 million current and retired government workers.

New York City’s five pension funds provide retirement benefits for its police, firefighters, school employees and civil-service workers with more than $103.8 billion in assets under management as of March 31. On Sept. 28, its largest plan, the New York City Employees’ Retirement System, which covers more than 180,000 active and about 130,000 retired workers, reported a 14% return in fiscal year 2010, which ended June 30.

“Some years you make money, some years you don’t,” Mr. Bloomberg said. “It’s overstating it a little bit to say the only one who’s done that well is Bernie Madoff, but 8% for a long period of time is not something that very many pension funds have ever achieved.”