"This struggling small city on the outskirts of Mobile was warned for years that if it did nothing, its pension fund would run out of money by 2009. Right on schedule, its fund ran dry.
Then Prichard did something that pension experts say they have never seen before: it stopped sending monthly pension checks to its 150 retired workers, breaking a state law requiring it to pay its promised retirement benefits in full.
Since then, Nettie Banks, 68, a retired Prichard police and fire dispatcher, has filed for bankruptcy. Alfred Arnold, a 66-year-old retired fire captain, has gone back to work as a shopping mall security guard to try to keep his house. Eddie Ragland, 59, a retired police captain, accepted help from colleagues, bake sales and collection jars after he was shot by a robber, leaving him badly wounded and unable to get to his new job as a police officer at the regional airport.
Far worse was the retired fire marshal who died in June. Like many of the others, he was too young to collect Social Security. “When they found him, he had no electricity and no running water in his house,” said David Anders, 58, a retired district fire chief. “He was a proud enough man that he wouldn’t accept help.”
The situation in Prichard is extremely unusual — the city has sought bankruptcy protection twice — but it proves that the unthinkable can, in fact, sometimes happen. And it stands as a warning to cities like Philadelphia and states like Illinois, whose pension funds are under great strain: if nothing changes, the money eventually does run out, and when that happens, misery and turmoil follow."
CNBC
H/T The Coming Depression
This is what we are going to start seeing more frequently as first cities, then counties and finally states all face the reality that they cannot pay the pensions that they promised. This will start the ball rolling downhill even faster as states look to the fed for a bailout and unions bring their anger to the streets.
Buckle up, 2011's gonna be an interesting year.
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This is heartbreaking. Why didn't this city prepare in advance for D-Day? They could have gotten together with the workers and worked something ot in advance at least to soften the blow. I'm surprised the man who cut the pensions hasn't been killed by somebody.
ReplyDeleteHey Scott.
ReplyDeleteI'm surprised, too. I suspect that killings and all sorts of mayhem will accompany these failures as we move forward. Like you said, what didn't anyone prepare? Further, why isn't anyone preparing now for the next failure.
I'm not prone to conspiracy thinking but sometimes I just have to wonder if there isn't a larger plan here.