President Obama is not an economist, businessman or foreign policy expert. Shortly after his inauguration, President Obama told an audience in France that, “In America there is a failure to appreciate Europe’s leading role in the world.” His primary foreign policy is to make America more of a team player, rather than taking action and demanding that others follow suit. President Obama’s primary domestic priority, as stated repeatedly during his campaign, is to make America a fairer country with less income disparity and more help for the disadvantaged-not necessarily a European welfare state, but a major step in that direction. Although conservatives ought to avoid the malicious intent charge, it is worth remembering that the left used that charge quite effectively to attack President George W. But benefit of the doubt says that these are side-effects, not objectives. Obama is attempting to fundamentally transform America and that, in the process, his policies have weakened the American economy and its standing in the world.
Michael Medved offers sound advice to conservatives to stop accusing President Obama of deliberately weakening America (“ Obama Isn’t Trying to ‘Weaken America’,” op-ed, Feb. While there will continue to be intense partisan rhetoric in the coming weeks over the budget, there was an excellent letter to the editor in today’s Wall Street Journal that touches upon this very issue: There have been many failures, but I still, perhaps stubbornly, hold it to be sacred. Has that always happened, sadly, no, but not for lack of trying. One of my fundamental beliefs is that all things can and should be worked out in peaceful and respectful dialogue. In short, there needs to be a seismic change in the analysis of public financials. Without getting too deep in the weeds, GASB (Governmental Accounting Standard Board – the functional equivalent to FASB) has muddied the waters with its various pronouncements surrounding this issue to the point where it is impossible to tell which plans are funded properly and leave the municipalities entirely too much room for interpretation and manipulation.
When it is determined that the investment assumptions are flawed, and they are, it leads to only one conclusion: the liability mechanics must change to match the asset. If someone were to guarantee an 8% return (for life), one would be wise to not only find several lawyers to get this guarantee in writing, but beg and borrow to secure funds to invest in such a return. Even today, public pension plans use an average investment return approaching 8% (coupled with strict investment restrictions limiting the permissible investments to generally higher quality securities which return no where near 8%). Leverage only works when it can be paid back and there is a “plan B” for exit. One can only use “Other People’s Money” for so long. It suggests an underfunded (defined benefit) pension fund should not be closed because the funding gap will have to be made up by fewer workers – and then further suggests that the burden would then fall to the public employer (i.e., the taxpayer). The last paragraph above is outrageous it defies logic, or at least any rational logic. The burden can fall on the public employer to make up shortfalls….” That is because when a fund closes, over time there are fewer workers contributing. Doug Martin, legislative director for the Florida branch of the American Federation of State, County and Municipal Employees, opposes abandoning the pension plan and says the costs of switching to a 401(k)-like plan can outweigh the savings for at least 25 years.Ī switch can increase the payments a public employer has to make to any pension fund it closes, particularly if the pension is underfunded, which many are. Florida’s pension system was 87.9% funded as of July. The debate has become heated in Florida after Gov. “….Many government-worker unions oppose a switch to 401(k)-type plans. Jeannette Neumann (see ) writes an article titled “States Mull Shift In Workers Pensions.” An excerpt: Generally speaking, defined benefit plans have their basis in economic optics using assumed rates of return and discount rates which can lead to gross underfunding, and ultimately bail-outs and bankruptcies. Simply, I support defined contribution plans more than I support defined benefit plans. This is a topic I have tremendous passion for so it will be difficult to be brief. A quick comment today on private version public pensions.
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