The Economy: Meanwhile Back at the Ranch Part 3, Family C

by CJFosdick on February 9, 2010

This is the third part in the series on the struggles of the average American citizen in this recession. (Check blog of 12/16/09 — Economic Issues: “Out in the Trenches for Part 1; and blog of 1/19/10 — Economic Issues: “Folkland Suffering” for Part 2)

The massive spending of Washington in the face of the misery of the common people is really shocking. Look at this massive bill to send American delegates overseas to the Climate Summit in Copenhagen. First, a grand total of 102 people went to Copenhagen with 60 of them Congress members. The bill just to get all these people to Copenhagen and back was over a million dollars. The hotel bill for two nights for all these lucky people for two nights of fun was over $404, 000, making a grand total of almost one and a half million dollars. Going further, currently, our government is spending 2.5 million dollars to buy a 30 second ad on Super Bowl Sunday reminding people to be sure and send back their Census Forms. The Government is spending over three hundred million dollars to advertise the census. Most people consider this wasted money.

Meanwhile, back at the ranch where Family C lives, things are not only tight, but scary. Family C consists of a couple of senior citizen in their seventies. Retired, this couple has worked hard all their lives. They raised three children while teaching school and running a working ranch. They paid into their Public Employee Retirement Fund all their teaching years, as required by law, while saving more in a nest-egg for their future needs. With their ranch operation they put all money earned back into the operation, hoping to build it to a financial success. On a teacher’s salary, saving the nest egg was very difficult. Things were so tight throughout these years, that it was a sacrifice to put money into the savings.

What about their future scares Couple C? First, their Public Employee Retirement Fund (PERA) is in severe trouble. Although they paid into PERA for a total of 58 years between them, with matching funds being paid by their school districts, in the last four years, PERA funds have fallen from 105% of funds needed to pay benefits to just 70%. This is a 30 billion dollar shortfall. PERA is in severe trouble, and this scares Couple C.

PERA is asking the state for money to make up the downfall, but since the total state revenue collected to run the whole state government is just 27 billion dollars, short 3 billion dollars with nothing left to pay the state’s other financial obligations. Shutting down the state government for three years is just not an option, yet experts have no idea other than this on how to continue paying the retirees their pensions. This state is going to have to borrow the money from the federal government, along with about 47 other states who are in financial trouble. For 2010, Couple C, along with all other people getting pensions in this state, will not receive the yearly guaranteed 3.5% cost-of-living-raise. In 2010, the most they can receive is 2%. Yet, Washington continues to spend money as if there is no tomorrow.*

Worry about losing their pensions is not the only thing scaring Couple C. The small nest egg lost between 30% and $40% in 2008. Although the Stock Market has gained back some of this loss, it remains quite volatile. Combined with this, inflation is eating away at this nest egg. For example, Couple C’s property tax has gone up a hundred dollars, monthly Medicare costs has risen $93.00, a rise in supplemental healthcare insurance and health costs are up, and almost across the board groceries and miscellaneous items have escalated. It goes on and on. The government insists there is no inflation now, but try to convince Couple C back at the ranch. Massive inflation is predicted and Couple C vividly remembers the double-digit inflation of the 1980s, as well as the double digit interest rates that will also go up now with a rise in inflation.

Also, on-going predictions to raise taxes for every one is forecast, and Medicare funds for seniors being in serious, serious trouble, indeed, it is a scary time for Seniors. Couple C has reason to worry. Come on, Washington, quit wasting taxpayer’s money. It is time to tighten your belt like all Americans are, and quit wasting the people’s money.

* Cortez Journal, January 30, 2010 pg. 4A

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