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Potholes vs. Pensions: Make Your Choice

Written by Gary North on June 29, 2012

It’s crunch time. Congress has to decide which Peters to borrow from in order to pay which Pauls.

A case in point.The highway fund needs money. It needs a lot of money. Anyway, that’s what it claims.

There is a gasoline tat of 18 cents per gallon. It has not been raised for 19 years. Also, cars get better mileage. So the fund is $18 billion in the hole — a pothole, if you like.

Congress does not want to raise the gasoline tax. That would be too obvious. Taxpayers would scream. But Congress will not cut spending.

Money, money, who’s got the money?

Ah, ha! Pensions! Why not siphon off money that the government pays to the Pension Benefit Guarantee Corporation?

But what if pensions go bust? This fund is already $36 billion under-funded. I guess the Congress will just borrow money from some other fund.

What’s that? You say that the PBGC is supposed to be funded exclusively by premiums paid by employers. Well, technically, yes — just like highways are supposed to be funded by gasoline taxes. But it turns out that Congress has funded a lot of the PBGC for years. So, this year, Congress will just send the fund an IOU. It will use the money saved to fund the highways.

There are some other projects to reach into. Did you know that there is a federal fund for paying to clean up radioactive leaks? It’s called the Leaking Underground Storage Trust Fund or LUST Fund. Let’s hope there are no leaks next year. Or the year after.

And so it goes, year after year. The IOUs multiply. So do the potholes.

Congress thinks this can go on forever. “There will be no day of reckoning.” Debt is a perpetual motion machine. The bills will not come due.

But they will. Then the name of the game will be finding a place to hide.

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17 thoughts on “Potholes vs. Pensions: Make Your Choice

  1. jim28threg. says:

    There will be no place to hide—nobody wants a polititian in their community. There are already enough lieing thieves running around.

  2. edcrandall says:

    In the private sector this is called "embeslement"

  3. Well at least it's not a penalty….just a tax. We need to clean house.

  4. The Obvious question is why don't they use the Billions and Billions and Billions they give to the banks and all of the other subsidies they hand out every year or would that be something they can't figure out or even consider. I mean that Bank to big to fail subsidy's is only going into the Upper Managements bonuses and inflated Salary's and to Washington DC that is more important than anything that the poor people need like good roads to drive on. The Government most likely says that with bad roads means that it will help the Auto industry with repairs to the cars from bad roads or new cars that have to be purchased due to the infrastructure failing.

  5. yes, there WILL be a day of reckoning.. AFTER the current crop of legerdemain artists are out of office. Why does the fedgov even need to be in the road repair business? Leave that to the states…. let US get the eighteen cents/gallon tax.

    Oh, and how about ending the "prevailing wage" requirements for all government "construction" (inculdes repair, replacement, restoratino) contracts.. sure, a few workers would no longer be living high on the hog, but many more would haev SOME work that now have none. forty bucks an hour to push a broom and stand about waiting for more gravel to fall off the trucks onto the travelled roadway….. gimme a (tax) break.

  6. ad astra per aspera says:

    Chris Dodd as in Dodd-Frank bill, took care of that problem for himself. Took his insider congress trading profits & bought himself a carribiean island for only one billion dollars!

  7. yupikesk1 says:

    Can't blame Obama. The kids are much smarter than he or his underlings.

  8. yupikesk1 says:

    This is what these fools did to Social Security. Their union buddies have done the same thing to Stockton, CA. These guys and gals are a little short of brain dead..

    Please disregard the previous comment. Computer illiteracy at work.

  9. Blair Franconia, NH says:

    Right now, potholes are more important than pensions.

  10. Nefertari says:

    Why not cut out foreign aid? Charity begins at home…we need to fix our country first.

  11. everyone always wants to attack what people worked for their entire life.they were promised these pensions,leave them alone. deflate them for the future. leave social security retirement alone,change the disability, there is something wrong when you see someone who is getting it chopping wood or children getting it because they claim ahdh. cut out all benefits of any kind for anyone who is not a citizen,especially illegals.eliminate all foreign aid,most countries who receive it work against us anyway. bring our troops home,why do we need them in 190 countries,they can be used to protect our borders from the southern invasion and spend their paychecks here helping our economy. if a friendly nation is threatened we are mobile so we can go to their aid like we did with kuwait. get out of the un, all they do is take our money and work against us. eliminate dept of education,return control to states,we save money and go back to schools that compete on world stage like we had before nixon created dept. then do same with other depts,states are supposed to have control.depts are set up on fed and state level,why should we be paying twice. budget problem solved

  12. politicians will always rob peter to pay pup unless put on a very tight leash by the voters. Term limits would help with this.
    who IS PETER??? THE TAXPAYER AND THE SERVICES HE PAYS FOR, CITY MAINTENANCE TO MAKE life in his community better. Who is Paul???? the over paid and benefited government workers and their fat cat pension fund. the actual private sector taxpayer pays for street repair and gets a public servant on massive retirement.

    Anyone receiving welfare needs to be assigned to a public work crew. It would help with the potholes

  13. of course they'll raise whatever taxes they want. and won't cut anything, especially their salaries or perks. Our government has become wicked and self serving, and don't consider the people at all.

  14. I don’t care what government workers were “promised” as pensions.
    They do not deserve it!
    They did not earn it. Their pensions come from extorted tax dollars.
    I did not agree to have my money taken from me to give to them.

    At least illegals are forced to do work that actually has economic value.

    People only deserve back as much Social Security money as they put in and not a penny more.

    Yes, eliminate the DOE and govt schools so they stop producing more drones who will work for the govt and expects tax payers to support them for their entire lives.

  15. huapakechi says:

    Here's a thought, Congress has mucked up the entire financial system of this country, start the recovery process by taking THEIR pay, pensions, and benefits first.

  16. WilliamBonney says:

    No one objected when Lyndon Johnson borrowed funds from the Social Security "Fiduciary" Trust Fund to finance his "Great Society". Jimmy Carter left IOUs whe he took what he needed to educate SouthEast Asians who flocked here after their countries were taken over by the Communiists. I didn't hear anyone object when Ronald Reagan authorized the first income tax on 50% of Social Security benefits in 1984. A decade later, William Clinton raised the Social Security income tax to 85%, with Al Gore casting the deciding vote in the Senate. Then Obama, after declaring the Social Security Fund would be bankrupt by 2030, reduced the FDIC revenues stil lfunding the program. Isn't it strange how all these elected polilticians are able to disregard the "fiduciary" aspects of Social Security and add insult to injury by calling it a "pozie scheme"? At least Bernie Madhoff was arrestied, convicted and incarcereated for the betrayals he committed!.

  17. Frank D Bates says:

    Hey, I think this is true what you say, the fat cats in DC are robbing us and letting us keep a little of our money, very little I must say. Pols have a license to steal. Frank From Olympia