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Monday, January 30, 2012

1.7% GDP Growth Is NOT Indicative Of ‘Recovery’

1.7% GDP Growth Is NOT Indicative Of ‘Recovery’

“The first ‘rule of holes’ just never sinks in - When you’ve dug your hole so deep you can’t get out, the first thing you do is STOP DIGGING!” - DRH

By Dell Hill

One of the daily features over at Ace of Spades Headquarters is The Daily DOOM, written by Monty.  Today’s post is timely and worth a few minutes of your valuable time to read.

The Daily DOOM

America’s GDP grew by a smokin’ hot 1.7% last year.  Whee!  It bears repeating: if you’re counting on getting investment returns in the 7-8% range, much less the 10% range, you’re likely to be disappointed for the next, oh, ten to twenty years.  If you plan to retire on your savings, you need to be realistic about how much you need to put away, because you’re not going to be able to count on investment returns to fill the hole.

Don't read this story (it's just more of the same "California is boned" stuff I've been yelling about for a long time); read the comments to it.

The mindset of the public employees -- particularly the unionized ones -- is pretty common to states high in the rankings of the LOTB. In fact, this attitude is pretty prevalent across the public sector generally.  The sense of entitlement, grievance, and utter lack of clue about private-sector compensation and benefits is rife.  But taxpayers are beginning to get a gut full of this rancid porridge, even in California.  The window of opportunity where this fiasco can end amicably is closing fast.

I’m sure you’ll be as shocked as I was to find that a union official thinks that public-sector pensions -- mainly held by unionized public-sector workers -- are being unfairly demonized.  Pensions are doing just fine and dandy, and that financial calamity looming over nearly every government budget in the land is just a specter conjured up by gun-toting anti-government wingnuts.  Or something. I kind of lost track of his argument in the thicket of faulty reasoning, conculsion-jumping, obfuscation, and outright lies.

It’s really heartwarming how public-sector labor unions have stepped up and agreed to sacrifice in the name of fiscal responsibility.  The spirit of public service is not dead!

You know why states are scared shitless of actually having to depend on realistic rate-of-return calculations in their pension actuarial tables?  This is why.  Unless the economy takes an extremely unlikely turn to the upside, and stays there for a good long while, there is no way on earth many states are ever going to be able to pay out the benefits they have promised to their employees and other beneficiaries.  Which is why I advise people who are counting on government money -- pensions, benefits, welfare, whatever -- not to count on that money too much in the years ahead.  If you can save your own money but aren’t doing it yet, you’d better start doing it right now.”

Read the entire post from Monty by clicking right here.

Dell’s Bottom Line:

These dire predictions have been recognized and reported on extensively over the past three or four years and yet the out-of-control spending and outrageous union contracts continue to be signed by Democrat government officials at all levels.  About the only exception is the turnaround in Wisconsin, where a Conservative Republican governor has regained control and is actually guiding his state to what can reasonably be described as “recovery”.

States such as California continue, barreling along toward the inevitable requirement of a massive federal bailout.  And even then - with the very same government in place - they’ll continue to spend far more than they take in.  The first rule of holes just never sinks in - When you’ve dug your hole so deep you can’t get out, the first thing you do is STOP DIGGING!

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