The Federal Reserve To Pensions:
Suspend Disbelief IndefinitelyDanielle DiMartino Booth is the former Advisor to the President of the Dallas Federal Reserve .. she writes on the unwillingness of politicians to address escalating challenges to the municipal pension fund crisis: "There is a distinct cerebral pleasure, relief even, derived from lapsing into a state of suspended disbelief .. Add up all our great states and Moody’s math comes up with $1.75 trillion in what will be pension underfunding by the time we’ve said adios to fiscal year 2017. That represents a 40 percent jump from fiscal year end 2015 .. The Federal Reserve is fully aware of the inferno burning under the surface of the nation’s public pension system and the direct effect their interest rate policy has had in exacerbating pension underfunding .. Unlike other countries, whose pension disasters will also be all consuming, U.S. laws allow accounting chicanery that obfuscates the gravity of the degree of underfunding. But have no doubt, these chickens will come home to roost though these manias always last longer than we can envision." .. Danielle advises strongly in revamping the education system as a big step in the right direction to addressing the cascading problems from escalating government municipal debt to escalating underfunding of pension funds.
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