Paul Volcker's "State Budget Crisis Task Force" has just issued a new report blaming rising healthcare costs and public employee pension funds for the blowout of state and local budgets, while completely covering up the LIBOR rate-fixing crime spree which cost states and municipalities billions of dollars in losses on fraudulent "interest rate swaps" tied to the rigged LIBOR rate. Not surprising, from someone who is known to be actively counterorganizing against Glass-Steagall. And of course Volcker and George Shultz, another task force member, were both architects of the August 15, 1971 collapse of the Bretton Woods system which ushered in the era of genocidal globalization.
Volcker's co-chairman of the task force is Richard Ravitch, who in 1975 worked alongside Felix Rohatyn in New York City, to impose huge, destructive cuts in government functions, while paying huge sums to banksters, under BigMAC (the Municipal Assistance Corporation). Ravitch headed up the N.Y. State Urban Development [sic] Corp. at the time.
Volcker's State Budget Crisis Task Force was formed in June, 2011. It has 12 members, and an Advisory Board with nine members, including George P. Shultz and Alice Rivlin. It has six "state partners," which were the study focus of the new report, released July 17: California, Illinois, New Jersey, New York, Texas, and Virginia.
The nine funding agencies of the task force include: the MacArthur Foundation, Peter G. Peterson Foundation, Open Society Foundations, Robert Wood Johnson Foundation, and others, including some described as "wishing to remain anonymous"!
Six specific "threats" to state fiscal "sustainability" are defined in the report:
1) Medicaid is "crowding out other needs"
2) Federal deficit reduction threatens the states
3) Underfunded retirement "promises"
4) Eroding state tax base and revenue volatility
5) Local government "fiscal stress poses challenges for states"
6) "State budget laws and practices hinder fiscal stability and mask imbalances"
Volcker and Ravitch warn, "The ability of the states to meet their obligations to public employees, to creditors and most critically to the education and well-being of their citizens is threatened," and present recommendations based on ordering states to knuckle down, and pay their debts — especially to creditors. The report says that the fiscal crisis for states will persist long after the economy rebounds (!) as they confront rising health care costs, underfunded pensions, ignored infrastructure needs, eroding revenues and expected federal budget cuts. It also questions whether states will ever be able to restore services that have been cut, saying that the loss of jobs in prisons, hospitals, courts, and agencies have been more severe than in any of the past nine recessions.
The report chides state governments for relying on budget gimmicks in recent years, including "borrowing" from pension funds by not making payments into the funds; in this way, state and local governments shortchanged public pension funds by more than $50 billion from 2007-2011 — on top of the losses from the crash of financial markets — and from the LIBOR swindle, which is unmentioned.