Why Illoinis Conneticet and Jersey are just the beginning

Over the 4th of July I was in New Jersey close to where one of the state parks was closed due to the shutdown. The media was filled with memes and pictures of Gov Chris Christie's foray onto the beach. These memes while humouros, failed to lighten the moods of the workers who were sent home, and campers kicked out of the parks. Merchants near these parks lost money, and people had their plans disrupted. Whether you lean more left or right isn't really the issue here, although if you look through the media's eyes it is. When you pull back and look at the big picture, you can clearly see the disintegration of our way of life before our very eyes. And no one seems to notice. Last weekend, instead of blaming all of the elected officials, depending on where you get your news , it was clearly one side vs the other. And the media was out front fanning the flames in order to have us all looking the other way. But New Jersey wasn't the only state in the news. Earlier in the week we heard about the financial woes of Illinois and Connecticut.

What surprises me most about all of this is the complete lack of caring of the average American. These events should be sending off red hot warning bells to everyone planning to live off their pension. Yet most people just shrugged it off and went back to focusing on their cookouts, with the attitude of "well that's their problem" or "That's not going to happen here"

It's EVERYONE's problem. Illinois Connecticut, and Jersey are just the tip of the iceburg. Even more conservative states like Texas have had towns and cities that cannot not pay public sector retirees, as we saw in Houston. So it is not just "blue" states with the problem. Realistically, even if your state is not broke, your town might be, or your county. And someone is going to have to make up for the shortfall. One thing is for certain, the problems aren't going anywhere.

What we can expect:

Government, whether local, county, state, or federal will continue this gridlock, and/or lurching from one crisis to the next. Whether its's funding or general political handwringing and finger pointing, you can expect more of the same. Nothing gets done, and whatever is done, is done at the last minute to the detriment of the average person.

Pensions will continue to dry up. One expert says payouts in Illinois could get as low as 30 cents on every dollar. Can you imagine only getting 30 cents of every dollar you are owed? If retirees are planning to live solely off their pensions, then quite frankly they are foolish. Those days are clearly over. The evidence is clear. Most states promised too much with too little. Even if it doesn't dry up completely, there is no guarantee someone can live off what they they will get, since it most likely will not be the full amount. If I was close to retirement, I would seriously look at other streams of income. And I would be doing that regardless of where I lived, since I know Illinois is not the only state with some serious budget issues.

There is no guarantee that you will get the money you paid into your pension. Most discussions I have with others circle around the fact that people believe that even if the government won't match them, they at least can access what they themselves contributed into their retirement. It's like their minds just cant accept any other alternative. Don't count on it. As we saw with 2008, when the government's back is up against the wall, they usually try to tax or charge their way out of it. In fact that's exactly what they legislator in Illinois did. They attempted to raise taxes dramatically. Thankfully the governor vetoed it. But sadly that probably means that retirees will just take a haircut on their returns instead. The money just isn't there. If you fall into this bracket, its time to stop demanding fairness and start accepting it. No its not fair. But a lot of things in life are not fair. Better that you be ahead of the game then not. Start setting up your life to make sure you are protected when this happens. Because yes, it is going to happen, because it already has.

If you are a public sector worker, be prepared to possibly not get paid during these shutdowns. There is now debate whether those state workers in Jersey who were furloughed on Monday will get backpay. Sure its one day. But these people did no wrong. They have mouths to feed too. Christie's vacation along with the use of tax dollars to fly back and forth to Trenton look particularly elitist and out of touch in the face of so many who were told to stay home. But like the retirees, adaptation is key. You too may need to consider alternate ways of making money, or making sure that if you are sent home, you will be ok.

Even if you are not a state worker, be prepared for a delay in service. Don't wait till the last minute to get anything done in this kind of environment. When governments shutdown, they close more then just the parks. The DMV, certain courts, and various other places won't be open. Nobody thinks about these things until they get kicked out of a park or cant get their license renewed, or a bridge gets shut down because repairs weren't done. Keep up to date on what needs doing.

In conclusion, you are probably on this site because you have some inkling of what the future looks like. Don't ruin that advantage with the stubborn belief that it just can not happen to you. In this environment nobody is immune unless they are below ground...Even then they might dig you up for the sake of imminent domain.