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Anyone Investing In Government, County or Municipal Debt Should Kiss Their Money Goodbye

August 22, 2010

I was at JP Morgan Chase and the investment adviser recommended investing in government bonds. I said you’ve got to be kidding. Government is broken. He said, government won’t default, they’ll just raise taxes. You won’t lose your money. One word: Bullshit.

We’re not investment advisers here at GR so anything written is just an opinion and should be taken as such. In our opinion:

Governments are issuing debt because they cannot meet their financial obligations. Direct Pension Plan obligations are out of control and there simply is not enough “private” taxpayer money to support government obligations. Right now Government is issuing debt to meet their obligations but soon Government will not be able to (1) meet their current obligations; or (2) pay their debt. When this happens, those who invested in government bonds will see their investment go down the toilet just like everything else government touches.

Here’s an interesting article from a Rochester NY paper
All agree teachers deserve our support. Their compensation and retirement benefits should not be jeopardized, nor should taxpayers be penalized, because of gross financial mismanagement and political ineptitude.

• The direct-benefit pension system for union teachers is broken. The school district’s funded and unfunded liabilities have not been fully disclosed to the public and ought to be the subject of an independent, transparent and thorough audit to include union teachers’ pension benefits.

• Private, parochial and home schools demonstrate every day the cost to provide high quality education to students can be much lower than the district’s proposed average per student cost of well over $10,000.

• A “back to basics” approach would dramatically reduce costs and rid the curriculum of self-imposed mandates unions use to justify bloated budgets.

• The district has authority to sell bonds without voter approval for union teachers’ retirement health and pension benefits and a concerted effort is under way to abolish the requirement to hold referendums for levy increases. Objective: no accountability.

• The fiduciary responsibility of politicians to taxpayers is corrupted when collusion with teacher’s unions results in higher taxes that are used by unions to further entrench their control over education.

Decertification of the teachers’ union, together with abolishing the direct-benefit pension system in favor of a 401(k) system, is action that must be taken.

Michael Bond

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