When billionaire investor Warren Buffett speaks, people usually listen. Politicians at every level of government in Kentucky should hear this, from his annual letter to shareholders sent out yesterday:
"Local governments are going to face far tougher fiscal problems in the future than they have to date."
"The pension liabilities I talked about in last year’s report will be a huge contributor to these woes. Many cities and states were surely horrified when they inspected the status of their funding at yearend 2008. The gap between
assets and a realistic actuarial valuation of present liabilities is simply staggering."
Kentucky's failure to get a handle on its public employee pension and healthcare liabilities, compounded by this year's insane $50 million raid, should be enough to wake everyone up. But they probably won't.
Not until all the other government goodies everyone is used to start getting crowded out by the "staggering" payments that lie ahead of us.
1 comment:
"Not until all the other government goodies everyone is used to start getting crowded out by the "staggering" payments that lie ahead of us."
Not necessarily. At least not until the politicians discover Alexander Hamilton's proportional tax on the movement of all moneys will there be adequate revenue supplied to the treasury.
In Federalist Paper 12, Hamilton wrote:
"The ability of a country to pay taxes must always be proportioned, in a great degree, to the quantity of money in circulation, and to the celerity with which it circulates. Commerce, contributing to both these objects, must of necessity render the payment of taxes easier, and facilitate the requisite supplies to the treasury."
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