Bernanke’s Fed is saving
Obama’s election the economy by flooding it with money borrowed from taxpayers’ grandchildren. $40 B per month is being scooped out of the air and poured into Fannie Mae, Ginnie Mae and Freddie Mac to fund cheap mortgages, i.e. mortgage loans at low interest rates to folks with uh, less than prime credit. Some may remember as far back as 2007 when that policy collapsed the real estate market. But it’ll get the loot out into the folks’ hands–in theory, anyway–and it won’t create a new collapse by early November and that’s all that matters. Fed Floods Cheap Mortgage Money into Real Estate tells all about it.
But that’s the same-old, same-old here; there’s another side to this that simply isn’t important enough to be reported anywhere. So here it is and after reading this, you’ll be able to say honestly you read something here that the Mighty Media haven’t told you: the Constitution Club has a scoop!
Pensions are a huge, current problem because there isn’t enough money in so many pension funds to pay the pensions they’re obligated to pay as present workers retire. Now few would care except that nowadays, the only folk who still get pensions are laborers in government vineyards, a big chunk of whom are teachers. City and state pension funds are almost universally in trouble. Why is that? There are two reasons; first, you may remember that pension funds are supposedly invested conservatively in bonds and thanks to the Fed’s squatting on interest rates, nobody has figured out how to get a decent enough return on bonds to fund pensions. Yeah, the Fed has created the pension plague and the longer it holds rates artificially low, the worse the pension problem gets. And then of course, politicians steal pension money.
In New Mexico, the teachers’ unions are fighting a move by the state to force teachers to up their pension contributions to help relieve the money shortage in their funds. This is getting headlines while the accompanying portion of this prescribed cure, additional funds from taxpayers…isn’t.
So, the big bad wolf at the door of state and local governments is pension funds short of enough money to pay the obligated pensions because the Fed’s low interest rates keep them from earning enough on their investments. The fun part is, that $40 B per month the Fed is spending to hold rates low just now, will be repaid by future taxpayers…plus interest…AND the current taxpayers and workers will pay more NOW to re-fund the pension funds back to solvency. Yeah, how about that! The taxpayers and workers get to pay now and their kids get to pay again plus interest for the borrowings that make it necessary to pay now! There’s a grift that no swindler in history can beat!
And we”re about to reelect the grifters that have pulled it off…