Friday, December 16, 2011

Raimondo's faulty pension data begins to sting Rhode Island

As seen in this blog in prior posts, the pension law changes shoved down the throats of our weak kneed legislature was based on faulty assumptions that I argued would lead to economic decline in this state. Raimondo's most egregious error was to rely on data from actuaries that live in outer space. Her insistence that the life expectancy for retirees should be 87.6 years on average is absolute hogwash. Using such bad data created the crisis which she so joyfully capitalized on.

I draw your attention to the chart. This chart represents a random study of deaths in Rhode Island during the Fall of 2011. Days were randomly selected and age at death calculated from the obituary page of the Providence Journal. In total, there were 257 deaths recorded. The average age of death was 77.4 years and out of the 257 deaths recorded during the study; 50 people lived past 88 years. The green line represents Raimondo's science fiction while the red line represents today's reality. (Please note: On the chart the green line says 88.6 but it represents the 87.6 year target - my mistake) Raimondo's unbelievable pension plan actually adds on 10 years of life in one giant leap of economic whackyness.

I know this information is anecdotal and not a scientific study. This chart does provide a view of the present day longevity of Rhode Island residents. It can be used for comparison purposes. You need to also remember that the chart represents only those people with the hard cash to pay the Providence Journal for the listing. These folks may actually live a little longer than those without the cash. Regardless; the assumptions made by Raimondo are wild-ass assumptions.

Now on to the state's economic decline. Today's Providence Journal rag has a lead story entitled; "Job losses edge up for fourth month." (Please note: I no longer link to the Providence Journal as policy for this blog) Rhode Island lost 1,900 jobs in November and the unemployment rate is again increasing for the first time in nearly 2 years (10.5%). In the same edition of the Journal, the national news headline is: "The Economy: Edging toward recovery" The national unemployment rate has ticked down to 8.6%. While things are getting better in the nation, Rhode Island's downward spiral continues. I guess stealing $billions from retirees is not working. Rhode Island can't even add jobs during the Holiday season. Do you think it has something to do with consumer confidence and retirees holding tight to their money? You bet it does! Get ready for 19 more years of this. Is it coincidence that Rhode Island has been faltering economically during the past 4 months: The same 4 months as the pension debate boiled?

In other more promising news: The Rhode Island Supreme Court denied the state's request for summary judgement on the issue of state pensions being contractual. The Supreme Court sent the case back to Superior Court for trial because the unions have a solid case. Maybe it will take the courts in Rhode Island to straighten up the economy. God knows, the Governor and Treasurer can't do it. Retirees have won round 2!


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