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Comment Ireland Didn't Practice Real Austerity Either (Score 1) 476

Ireland which went through some severe austerity

Except it didn't. "Ireland recorded a Government Budget deficit equal to 7.70 percent of the country's Gross Domestic Product in 2012." And it was as high as 30.9% in 2010. Now, if you want to argue it was foolish to bail out Anglo-Irish Bank, that's a different argument.

Which part of "Real austerity is cutting spending until outlays match receipts" was unclear?

Comment Portugal is Not Practiing Real Austerity Either (Score 1) 476

Did you forget Portugal, which is now trying the severe brand of austerity that you seem to favor

Except it isn't.

"Portugal recorded a Government Budget deficit equal to 6.40 percent of the country's Gross Domestic Product in 2012.

Which part of "Real austerity is cutting spending until outlays match receipts" was unclear?

Comment No European Country Practices Real Austerity (Score 2, Interesting) 476

The thing to remember when hearing about all this "austerity" in Europe is that no country in Europe has tried real austerity .*

Real austerity is cutting spending until outlays match receipts. As the linked chart shows, the overwhelming majority have raised taxes or continued deficit spending. Some have slightly reduced the ratio of deficit spending to GDP and called it "austerity." They're still digging a hole, they're just doing it more slowly.

Politicians are addicted to spending to prop up an unsustainable welfare state. They've seen what the future looks like in Greece and they still refuse to stop spending. And the current government of the United States is right there digging with them.

Austerity hasn't been tried and failed. It's been declared difficult and left untried.

(*with the possible exception of Estonia and one or two other small countries)

Comment Waiting for SCOTUS to notice the 10th Amendment (Score 5, Insightful) 173

That is to say, I would like them to rediscover the fact that we live in a constitutional republic in which the federal government's size and power is limited to only that necessary to carry specifically enumerated powers.

Sadly, that does not appear to be in the cards anytime soon. It makes it too hard to hand out subsidies to cronies and buy off various interest groups with taxpayer money.

Comment Outrageous Union Pensions Are Unsustainable (Score 3, Informative) 90

Why did public pensions invest in venture capital firms in the first place? Years of ever-escalating pension benefits plus years of severe underfunding those same pensions means that they needed unrealistic growth rates to even come close to meeting their targets.

Take California for example. Not only did they keep increasing pensions promises while underfunding them, they used a variety of accounting tricks to cover it up. On top of that, they assumed unrealistic returns (7.5% or higher in many cases).

How could they get away with? California has essentially become a one-party state where public employee unions are the most powerful interest group. So the process is:

1. Public employee unions use mandatory union dues to contribute to Democratic candidates.
2. Once elected, Democrats vote for ever escalating pension benefits.
3. Democrats appoint pension board officials who ignore underfunded pensions. And the CEO of CalPERS, California's largest pension fund, was just indicted for fraud. "The indictment charges that the falsified documents allowed Villalobos to reap $14 million in fees for serving as a middleman between CalPERS and a prominent investment firm handling $3 billion in CalPERS' money."

Combine this with ever-higher taxes, and a faltering economy, and you have a recipe for the governing class looting the treasury at the expense of the middle class (and future generations that will have to deal with the consequences of bankruptcy and crushing debt loads). Several California cities have already declared bankruptcy, and newer, more transparent accounting rules will probably force more into bankruptcy.

VC funds are probably the least of their worries.

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