City Journal Winter 2014

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Winter 2014
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Steven Malanga
The One “Bailout” Local Governments Can Afford « Back to Story

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"In the fiscal year that ended June 30, government pension funds averaged investment returns of just 1.1 percent, when most project an annual investment gain of between 7 percent and 8 percent."

Using the investment returns of a single year is inappropriate. Pension plans operate over decades; the return in any given year is irrelevant.

For the 10 years ended September 30, 2012, annualized public pension fund investment returns are right around 8 percent.

Steve Malanga talks about a recovery. How cruel.

Maybe there is an upside to having a Republican House. (The obvious downside is Obama will blame the economic storm that's coming on it.) Maybe they will stand in the way of rewarding blue state irresponsibility. Those California voters sure are smart, aren't they? They just decreased their chances of any bailout by firing some of the few remaining Republican house members from their state.
I can't imagine the Republican's ever voting in favor of a stimulus for states and local governments. It's not going to happen. The tea party would rebel and leave the Republican party. And that would help seal the R's doom.

The only good thing to come out of this recession has been some fiscal sanity forced on states. They expanded a lot faster then population. And they kept promising more and more in terms of benefits. If this had continued another 10 years then many more cities would have gone bankrupt. This has been a major wakeup call...