Protect yourself, as the absolute one and only solution to this mess is inflation. Don't expect the government to announce this policy with billboards and speeches. To be effective it must be surreptitious. The Govt numbers will continue to be a fiction, and the fiction will become more and more divorced from reality.
I love a lot of things about NJ but have to consider leaving. Christie seems like he wants to fix this problem. It'll be interesting to see how it plays out.
I'm in the same boat. My property taxes keep going up, and my car insurance is ridiculous. By year's end, I'm outta here. Probably going to Pennsylvania.
This is what it's like everywhere in the developed world, Misthos. There are some possible solutions (for example, the Dutch pension system seems to work relatively well, compared to the really dysfunctional cases like the US and the UK). There's work that's been done on quantifying the unfunded pension obligations of the various govts (I forget the name of the author) and it's scary. There's also the recent asset allocation piece by Tim Bond of Barclays that talks about longevity as one of the big drivers of bond yields/equity mkts going fwd. As you know, aging populations and high dependency ratios in the Western world is my explanation for what's behind the accumulation of leverage that we're currently dealing with.
For those that are not familiar with it - in the US, we have Social Security and Medicare - which is available to all after a certain age, and payment fluctuates depending on the amount contributed over ones lifetime. The payment is a fraction of what people earned. This is a retirement benefit - Social Security is a stipend, Medicare is health insurance. However, we also have separate pensions for government employees. These are now rarely offered in the private sector. These are what contributed to GM's downfall. States and Municipalities offer their retired employees a large percentage of their salary - as well as healtchare - FOR LIFE. I know of a retired cop that is in her early 40s. She is receiving, I believe, 70% of her salary - for life. In terms of societal responsibilities - I can understand giving senior citizens a stipend. But gov't employees should not be relying on private sector workers that are getting nothing to pay for their relatively luxurious retirement. And it is beyond a question of fairness - it is one of practicality now. There is no money to fund these Ponzi Schemes.
The situation is even more fun-tastic in the UK. On top of the public sector pension insolvency issues (local councils, Royal Mail), there's also problems with the legacy defined denefit (DB) pension schemes that are, arguably, bankrupting British Airways, British Telecom and other, otherwise viable, private companies.
NEVADA'S BUDGET WOES: Dentures, diapers for elderly out under proposed reductions, officials say http://www.lvrj.com/news/breaking_news/raggio-has-harsh-words-for-gibbons-83920587.ht
We're not the only ones: With their property tax bill at $11,500 and rising, Kirsten and Keith Cuillard decided that if their elected officials weren't going to take decisive action, they'd have to themselves. So in June, the Middletown couple packed up their three young children and all their possessions and moved, following a well-worn trail south from Monmouth County to the suburbs of Charlotte, N.C... From 2000 to 2008, nearly 800,000 households moved from New Jersey to another state, taking $57.7 billion in adjusted gross income out of New Jersey, according to data from the Internal Revenue Service. The dollars for those years were adjusted for inflation.Countering that exodus was an influx from other states of some 636,000 households and $45 billion in adjusted gross income, in 2008 dollars. On balance, New Jersey had a net loss of 163,000 households and $12.8 billion in gross income, adjusted for inflation. The $12.8 billion figure represents about 4 percent of New Jersey's total taxable income. During that time, the state's total population still grew â by 268,000 people, or 3.2 percent â because of an influx of immigrants and the fact that there were more births than deaths. http://www.app.com/article/20091002/NEWS/310020001/Leaving-New-Jersey This will be an interesting development. As opposed to the EU, where people are less likely to flee a country, here in the US moving to another state is not as difficult - culturally or economically. I see states like NJ, NY, CA, and MI going downhill relatively fast. They face double threats - a slowdown in the economy, as well as population flight - resulting in less tax revenues, and less business development. A hard to break feedback loop. Voting with your feet is the ultimate vote.