How Ben Bernanke Is Destroying Your Retirement

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Uncle Sam has an unfunded pension liability of $800 billion.

Corporate pension funds have an unfunded liability around $400 billion.

State and local pension funds have an unfunded liability in the tony neighborhood of $3 trillion.

That's over $4 TRILLION in UNFUNDED pension funds.

And if you're not lucky enough to be in a "defined benefit" pension plan (which fewer and fewer people are these days) there's undoubtedly an "unfunded liability" in your own savings – in other words, you haven't saved enough to retire.

It's a huge problem and it's getting worse. And there's one individual to blame for all that $4.2-plus trillion of money we need to find – Ben Bernanke.

The Killer of Nest Eggs

Bernankeism exerts a double whammy on pension funds, because of the accounting.

To determine the cost of all the pensions that must be paid, the actuary makes assumptions about people's lifespans (another problem – they're lengthening), gets a future stream of cash flows, then discounts the cash flows back to the present at an assumed rate, based on what he thinks the fund can earn on its money.

If the discounted amount is less than the current value of the fund, the fund has a surplus; if it's more, the fund has a deficit.

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  1. Greg Sails | May 23, 2013

    It's about time this blundering megalomaniac got some of the comeuppance he deserves. As an economist I can say that his methods of never-ending death's door interest rates and QE are UNKNOWN in the economic community. They have never worked, but luckily we've been able to overcome the damage they do-so far. Leave it to Obama to keep this animal unleashed and unchecked.

  2. Aprov | May 23, 2013

    Hi! Nice article, but I do think individuals, who over many years have lived large, and made little effort to understand financial responsibilities, are also to blame.

    As to President Obama, well, the voters who turned up, chose him twice. They seemed not to care about financial matters and were impressed by personalities. The opposition also offered little to the average voter who needed a handout. Of course, if those at the top of the money system had not shifted manufacturing to Asia, and co-opted people into bad housing loans, financially disenfranchising and beggaring the average voter, maybe the electoral results etc. would have been different.

    Perhaps the education system should be asked/forced to teach money basics to every high school student as a condition of graduation. Mature voters might then be better prepared to decide whose ideas/guidance are worthy.

    Regards

    • DD | May 24, 2013

      Perhaps the education system should be asked/forced to teach money basics to every high school student as a condition of graduation.

      I have thought this for a very, very long time – decades in fact, but it needs to go beyond the basics. It's also the parents who are at blame for not instilling this kind of education on their children and to make them aware of what's to come once they leave school or Uni. It's not rocket science, but for most by the time you/they realize what they should have done when they were younger, it's often too late to do anything about it. Time is one of the most important factors of anyone's life because you never get time back.

  3. Curtis Edmark | May 23, 2013

    Its called mortgaging the future.

  4. Douglas Robinson | May 26, 2013

    Does anything from your high school economics class pertain to what we are living through today? Nothing works as advertised, corruption and constant changing of the
    Monetary playing field has destroyed any chance to expect your just reward for saving in whatever it might be today. See,..tomorrow the name of it will change, the promises and rules will change, what was up will be down, and what's down will be sideways. Forget integrity,..America has nothing left.

  5. jackie cox | May 26, 2013

    why do you not print the truth ?

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