This is what exploding OTC Derivatives can do to the school district in which your child attends. Superintendent Frances Gallo followed through on her controversial plan to fire all the teachers at Central Falls High School in Rhode Island Feb. 23, after the district and the teachers union failed to come to an agreement about how to fix the failing school — and US Education Secretary Arne Duncan lauded the decision. After decades of drift, denial and inaction, Rhode Island’s .8 billion pension system is in crisis. Ten cents of every state tax dollar now goes to retired public workers. Before long, Ms. Gallo has been cautioning in whistle-stops here and across the state, that figure will climb perilously toward 20 cents. Until this year, Rhode Island calculated its pension numbers by assuming that its various funds would post an average annual return on their investments of 8.25 percent; the real number for the last decade is about 2.4 percent. Long before you get to the point where all of the tax revenues are going to pensions (which would be about 40 years hence) you will have either a state bankruptcy or a revolt. There are of course functions that the State is obligated and expected to provide that go well beyond retiree pensions. When this fixed cost runs into the remaining funds the state is done. The problem we face at both a State and Federal level is that we allowed various people in these organizations to run this sort of ponzi scheme on a continual basis for …
Video Rating: 5 / 5
