By Bloomberg – Re-Blogged From Newsmax
U.S. state and local government pensions, already with about $2 trillion less than they need to cover all the benefits that have been promised, are falling short of their investment-return assumptions this fiscal year — and President Donald Trump’s trade war with China isn’t helping.
The median public fund, which typically has a fiscal year ending June 30, returned 3.25% for the three quarters through March 31, according to Wilshire Associates Trust Universe Comparison Service.
A bill at the Illinois legislature proposes to raise the annual registration fee for electric vehicles (EV) from US$17.50 to US$1,000 and to more than double the gas tax from 19 cents to 44 cents per gallon, under a plan to fund infrastructure advanced by Democrat State Senator Martin Sandoval.
According to the bill, introduced at the Illinois General Assembly, owners of fully electric vehicles “shall register the vehicle for a fee of $1,000 for a one-year registration period,” under the proposal that strikes out the current “In no event may the registration fee for electric vehicles exceed $18 per registration year.”
The bill also proposes to increase significantly the gas tax in the state, as well as the license fees.
Our Current Financial Circumstances
- The U.S. is $22 trillion in debt and burdened with $100 – $200 trillion more in unfunded liabilities. Just to pay the interest the U.S. must borrow. Debt is rapidly rising and cannot be paid unless “they” default or hyper-inflate the dollar.
- Chairman Jerome Powell stated, “The U.S. federal government is on an unsustainable path.” Even the Fed admits what everyone should realize.
- Global debt is $250 trillion. Some countries have descended farther down the debt-paved road to economic hell than the U.S.
- Pensions are under-funded, student debt is a disaster, the main street economy is weak, real estate prices and sales are falling, retail sales are down, real wages have been stagnant since the 1970s, and no credible plan exists to fix debt, deficits or devaluations.
- The political and financial elite profit from wars, inflation, devaluation, strip-mining assets, and income inequality.
- It’s an ugly picture with no easy answers. But debt, deficits and QE levitated stock markets to all-time highs.
Fiscal year 2018 wasn’t a good one for U.S. government net-worth. While that may hardly be surprising, it’s possible we’re reaching a “tipping point.”
- In fiscal year 2018, the government’s total net loss was $1.16 TRILLION.
- … they spent over $4.5 trillion.
- … nearly HALF went to Social Security and Medicare.
- … spent a record $523 billion just on interest payments on the national debt!
A year ago, Republicans in control of Congress suspended the cap on federal borrowing. The limit was automatically re-imposed on March 1st. Politicians now have a few months to hammer out legislation to raise the cap as the Treasury employs “extraordinary measures” to fend off default.
The federal deficit is mushrooming once again. The 2017 tax cuts have taken a bite out of receipts at the IRS and economic growth has not met expectations.
This year’s borrowing to fill the gap between government tax revenue and expenditures may reach a trillion dollars for the first time since 2012.
If Washington politicians follow the usual script, we can expect Republicans to posture as fiscal conservatives and then relent either just before or just after a federal shutdown.