This piece was reprinted by OpEdNews with permission or license. It may not be reproduced in any form without permission or license from the source.
(4) "(T)housands of city and state governments will have no choice but to gut their budgets, declare bankruptcy, and in many cases, even shut down entirely."
As a result, an American Greek Tragedy possibly looms "in more ways than one." A million or more public workers may lose jobs as Washington and deficit-burdened/budget-strapped states, cities and local communities seek ways to cut costs. Way one is reducing staff levels, the largest expense. Others include debt and pension obligation defaults with trillions of dollars of liabilities at stake.
Public pensions, if fact, face a trillion dollar crisis. Orin Kramer, New Jersey State Investment Council chairman believes they're underfunded by over $2 trillion, citing independent research he commissioned.
Separate, so-called OPEB (other post-employment benefits) obligations, are underfunded by at least another $530 billion, according to the congressional Government Accountability Office's November 2010 estimate, saying the figure is extremely conservative. Others put it at from $1 - $3 trillion. The combination of economic weakness and mounting debt obligations may mean inevitable debt and public pension defaults, as well as growing numbers of municipalities declaring bankruptcy because Washington won't help.
At issue is a federal/Wall Street scheme to reengineer governments, downsizing them for profit at public worker expense through lower pay, fewer benefits, and lost pensions to protect as many debt holders as possible. Also to force cash-strapped states, cities and communities to sell public assets cheap so banks and other corporate raiders can grab them at fire sale prices.
On January 7 in testimony before the Senate Budget Committee, Fed chairman Bernanke said:
"We have no expectation or intention to get involved in state and local finance." States "should not expect loans from the Fed," nor help from the Obama administration and Congress in discretionary budget austerity mode.
In their March 2010 "Trillion-Dollar Pension Crisis Looms Large Over America" article, writers Paul Ingrassia and Imogen Rose-Smith suggested "pension fund accountants might consider" asking: