More Bailouts from Fed to Save ... Governments

The Federal government (through the quasi-private Federal Reserve Bank) is the only level of our government who can coin money. So profligate spenders at state, county and local levels are going bankrupt , especially under the weight of bloated salaries and pensions for pubic workers.

Mish reports a story of the pending bankruptcy in Miami.

The city of Miami is in such financial dire straits that commissioner Marc Sarnoff is using the "B" word, bankruptcy.

"We are not the only city, municipality to be going through this. It looks like Los Angeles sometime next week or the week after will be going bankrupt. It looks like there will be 30 more cities following suit."

Increases in public worker salaries is one of the main reasons why the budget is so tight. The average salary for a Miami city employee is $76,000. The average salary for a Miami city resident is $29,000.

Employee pensions are choking the budget too. In 2000, pension payouts cost taxpayers $16 million. In 2009 that number spiked up to $70 million.

Not un-coincidentally, state governements all over are cutting pay, payrolls and crushing pension benefits:

• Education Minnesota Drops Opposition to Curbing Benefits


• The Atlantic reports: Public Pensions Headed for Disaster


• New York City's pension contribution for 2011 is projected at $7 billion, more than 10% of the entire budget.


• Even the New York Times cries: Padded Pensions Add to New York Fiscal Woes

more than 100 retired police officers and firefighters are collecting pensions greater than their pay when they were working. One of the youngest, Hugo Tassone, retired at 44 with a base pay of about $74,000 a year. His pension is now $101,333 a year.

This widespread and obscene theft of public money is unsustainable and is crashing down all over ... as it must.

EXCEPT .... to the rescue is the nanny of all nannies -- the bottomless pit of money from the Federal government:  Sen Bob Casey (D-NJ) has proposed bill S.3157 to "save" public pensions .. those pensions that pay public workers 2-4 times the average private individual ... with the money from .. you got it .. the poorer private individuals.

I think few in the private sector voted for this "fundamental change" in America -- where private individuals are plundered for the benefit of overpaid public workers.  This has to end NOW, or it will crash in an ugly fashion.