The Pension Collapse Is Starting in Illinois

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From Birch Gold Group

After degrading for decades, America’s public pension system is finally at its breaking point, and the first shoe is about to drop in Illinois. Is this the beginning of the end?
Illinois isn’t the only state underwater. New Jersey, California, and several others are close behind. And when one falls, the rest could quickly follow.
When that happens, we’re poised for a vicious chain reaction that could decimate our economy. Americans everywhere will feel it — young or old, pension holder or not. Here are the risks, and what you may want to do to prepare…

Troubling Harbinger in Illinois

The epicenter of the U.S. public pension crisis is in Illinois. This should give you an idea of how bad things are there: On top of the state pension program being utterly insolvent, Illinois can’t even afford to pay lottery winners or feed prisoners.
Illinois legislators are grasping at straws. According to a recent report, the state has $15 billion in unpaid bills and $251 billion in unfunded liabilities. $119.1 billion of those unfunded liabilities are tied to shortfalls in the state’s failing pension program.
After months of desperate number crunching, Illinois finally passed a budget this week. But legislators employed massive tax hikes to make it happen — a 32% increase on state income tax and 33% increase on state corporate tax.
Illinois’ new budget doesn’t mean much, though. It raises a paltry $5 billion, just a drop in the bucket when you look at the state’s $15 billion deficit.
Even Illinois Governor Bruce Rauner agrees that it’s a hopeless, last-ditch effort:

“This is a two-by-four smacked across the foreheads of the people of Illinois,” Rauner said. “This tax hike will solve none of our problems and in fact, long run, it’ll just make our problems worse.”

And if all that wasn’t enough, Moody’s is putting Illinois under consideration for a credit downgrade — potentially making it the first U.S. state to receive “junk” rating status. If that comes to pass, borrowing costs for Illinois will uptick dramatically, and it could be the final nail in the coffin.

Just the Beginning…

The situation in Illinois is taking center stage right now, but several other states are poised to follow. And when Illinois does fall, it will only accelerate their demise.
Kentucky, New Jersey, Arizona, and Connecticut are at the top of the list. Their pension woes and budgetary shortfalls are nearly as big as Illinois’.
And the rest of the country? It’s only marginally better off. Bloomberg reports that just 15 states have pension funding ratios above 80%.
U.S. public pensions are underfunded by at least $1.8 trillion, possibly as high as $8 trillion, according to expert estimates. They’re paying out more money than they’re taking in, plain and simple. And they’re falling hopelessly short on their projected returns too. Most funds aim for approximately 7.5% return, but they barely broke 1.5% last year.
All this shows is that, more than ever, pensions are snowballing into insolvent oblivion. And sadly, a collapse is the only thing that will stop them.

The Threat to Your Wealth (And How to Preserve It)

America’s public pension system is nothing but a tinderbox waiting to be lit, and Illinois just struck a match. No matter what, the only way this quagmire of pension insolvency can end is in a pile of ashes.
That alone is sufficient reason for Americans to start seeking safe haven stores of wealth right now.
Consider the Fed’s most likely response to this imminent collapse, which will only make matters worse. It’s safe to assume the Fed will fall back on its old tricks from 2008: print more money and use quantitative easing to slap a band-aid over the problem.
While the Fed tries to pretend away this pension collapse with fast-and-loose, helicopter monetary policy, inflation will surge and the dollar will drop like a stone.
But one “real money” asset will do the exact opposite: gold.
See, gold’s inherent value never changes, only its price does. And that price depends on several external factors like supply, demand, and valuation of the currency used to buy it — in our case, that currency is dollars.
So when the dollar falls, what happens to gold prices? Well, it means you have to spend more dollars to buy the same quantity of gold. And that just sends gold prices higher and higher.
Birch Gold Group helps Americans protect their savings with physical gold and silver. Clients can purchase precious metals for physical possession, or move their IRA or 401(k) into a Precious Metals IRA. To learn more, request a free Info Kit on Gold – there is zero cost and zero obligation to you. All you need to do is enter your details at www.birchgold.com

7 thoughts on “The Pension Collapse Is Starting in Illinois

  1. Could this possibly mean that America can not really afford to be in the Middle East killing people or is that a priority?

  2. ROFLMAO
    Democratic and Republican politicians discovered they could get elected and reelected by promising checks to 21 million government employees and over 50 million government dependents.
    Not to worry they thought, we can keep stealing profits earned from the private-sector that employees over 131 million workers producing all our goods and services and profits.
    That charade was doomed if private-sector workers ever rediscovered Lenin’s maxim “He who does not toil does not eat.”
    Socialism whether the communist or fascist version are both totalitarian.
    Appears like a handful of people with deep-pockets discovered how to dupe voters keeping them divided and polarized over a handful of issues.
    Result was for several decades big-money controlled both major parties with government employees and government dependents on one side versus private-sector workers on the other.
    IMO Trump represents neither traditional Republicans nor traditional Democrats. His core support is from 131 million private-sector workers that are fed-up with government. Hoping a leader would emerge who could lead modern-day patriots in a battle to recapture their government.
    IMO those blue-collar, private-sector workers are the real middle-America, modern-day patriots.

  3. This is what happens when you let bankers and financiers run your country. They loot and loot and loot, plan wars to loot some more. Had enough yet……END THE FED!!! It’s the ONLY way America can survive!!!

  4. I cashed out my pension at retirement…still have all the money, and a nine-plex apartment building it paid for.

  5. but hey lets spend some more on fighting in the middle east and give some more billion dollar aid to all the countries. meanwhile force the amedicans into naked body scanners and facial recognition while eating fish off of japan and the west coast.
    the life you could only dream about.
    war war war more more more print the cash war war war more more more

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