Tag: Boomergeddon
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What Do We Do about Petersburg?
by James A. Bacon More bad news from Petersburg: The Southside city of 32,000 souls and 600 government employees has fallen more than 60 days behind on $2.3 million in pension payments. That development was reported by the Virginia Retirement System in a letter to state legislators, as required under a law that went into…
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The Seven Percent Assumption
by James A. Bacon The Virginia Retirement System earned an estimated 1.5% return on its $68 billion portfolio of investments last year, spurring discussion over whether state and local governments are contributing enough to maintain the long-term financial integrity of the retirement plan for Virginia school teachers and government employees. For purposes of calculating the system’s…
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Detroit on the Appomattox
by James A. Bacon For its 2016 fiscal year, which closed June 30, the Petersburg City Council enacted a $75 million General Fund budget. Somehow, the city managed to close the year with a $17 million deficit. Last week, council members knew the situation was dire. Staring at what they thought was a measly, $7.5 million deficit, they…
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The Hidden Risk in Money Market Funds, and What It Means for Virginia
by James A. Bacon I’m sure many readers are tired of hearing my jeremiads about excess debt, fiscal unsustainability, and the necessity of re-engineering Virginia institutions to survive the inevitable reckoning. Well, too bad. The global economy is severely out of balance, Virginia is part of that economy, and we will suffer the consequences when the…
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Chicago on the James?
by James A. Bacon As if the City of Richmond didn’t have enough problems, now tensions are erupting between the executive director, board of trustees, and members of the city pension fund’s investment advisory committee. Based on the account by Michael Martz at the Richmond Times-Dispatch, the rancorous relations between pension director Leo F. Griffin…
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Boomergeddon Update: Medicare HI
by James A. Bacon The Hospital Insurance Trust Fund, one of the four major components of the Medicare program, will run out of money in 2028 — two years earlier than previously projected. That appraisal comes from the Medicare Board of Trustees, which, the last time I checked, is not funded by the Koch Brothers. The news…
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Virginia Ranks 19th for Fiscal Condition
Virginia’s state finances are nothing to brag about, according to data contained in the Mercatus Center’s 2016 edition of “Ranking the States by Fiscal Condition.” The Old Dominion gets below average scores for cash solvency (cash on hand to pay short-term bills), and middle-of-the-road scores for budget solvency and long-run solvency. The state scores above…
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Reader Alert: Another Jeremiad about Debt and Risk
Holman W. Jenkins, Jr., at the Wall Street Journal reminds us how countries around the world, including the United States, are doubling down on debt to stave off recession: The Richmond Fed’s “bailout barometer” shows that, since the 2008 crisis, 61% of all liabilities in the U.S. financial system are now implicitly or explicitly guaranteed…
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Mala Suerte, Puerto Rico
by James A. Bacon The U.S. territory of Puerto Rico, like several American states, has forged a facsimile of prosperity by borrowing and spending beyond its means. Earlier this year, independent bond-issuing authorities began defaulting on their debt. Investors fear the territory will fail to make payments on General Obligation bonds coming due in May and June. Not…
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Fed Theft Update: $749 Billion from Bank Depositors
Federal Reserve Bank suppression of interest rates has cost bank depositors $749 billion in interest income on savings accounts, CDs, and money market accounts over the past six years, according to Richard Barrington with MoneyRates.com. Quantitative Easing has made possible one of the greatest redistributions of wealth in United States history. Unlike with taxes, which…
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Buena Vista: the Canary in Virginia’s Fiscal Coal Mine
by James A. Bacon The City of Buena Vista, which defaulted in 2014 on a $9.2 million bond issue to pay for a golf course that was supposed to spur growth in the city, has received some good news. It will be allowed to keep its city hall. For now. The office building, along with…
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Are the End of Times Upon Us?
by James A. Bacon Surely we have reached the end of times of apocalyptic lore when the leading Republican candidate for president flapped his arms during a national debate and assured the American people that not only are his hands of respectable size but so is another part of his anatomy. “I guarantee you, there’s no problem,”…
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Your Federal Tax Dollars at Work
And I thought the City of Richmond was incompetent for its inability to close out its financial books in a timely manner! Heed this opinion from the federal Government Accountability Organization (GAO) on Uncle Sam’s financial statements for 2014 and 2015: “Certain material weaknesses in internal control over financial reporting and other limitations on the scope of…
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Boomergeddon Update: Deficits Rising Again
by James A. Bacon Blame who you want for this sad state of affairs — it’s always the other guy’s fault, right? — but after six years of shrinking federal government deficits, red ink is on the rise again. And unless Congress enacts significant budget reforms, deficits will get worse every year pretty much forever…
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Agreed, We Can’t Risk Expanding Medicaid. But What’s the Alternative?
by James A. Bacon Republican leadership in the House of Delegates once again has slammed the door on Governor Terry McAuliffe’s proposal to expand Virginia’s Medicaid program. There are good reasons both for and against extending the entitlement but the decisive and most compelling argument is the likely inability of the federal government to honor its commitment to…