Do the math or face rude awakening

Bob Jack, North Las Vegas

Sunday, Dec. 22, 2013 | 2:01 a.m.

Much has recently been in the news about the financial problems of Detroit. What are the takeaways for all of us from this crisis?

A dialogue on the moral duty to pay retirement pension obligations to employees of an insolvent or bankrupt municipality, like Detroit, may be useful in sizing up the future.

So you feel that the federal government has the moral duty to bail out those employees in any municipality who have been promised retirement pensions, which the city is unable to pay, and which a court has declared in a judicial proceeding that the municipality has no further obligation, or only part of it, to pay those employees. And you say you feel that such treatment of these employees is unjust.

I understand your feelings. Feelings are not the issue here, however. The simple fact is that there are times when there are simply not the resources that are needed to cover all the liabilities, or possibly none of them at all, and that any promises made no matter how sacred they may have seemed, are simply unachievable. So what then can be done? The past is over now. Nothing more about it may be possible at all.

However, the bottom line when looking forward is another proposition altogether. The individual must understand that he or she is always in a risk-exposed environment. One must always try to do the instant math, size up the real risk environment all around them, and then using his or her own best judgment determine whether the things that have been “promised” are at risk of being lost. If that be the case, one must immediately shift their expectations, and decide if they are going to stay or leave, and if you leave what is the best strategy for maximizing your assets on departure. Do your best, but then accept that your only choice may be to leave.

There is no magic money tree. Government in D.C. cannot be counted on. It is facing insolvency and bankruptcy itself at some time as we look forward. Consider that we will not be able to count on Social Security, Medicare and Medicaid indefinitely. We just did the instant math, sized up the risk environment and it is high. Just when it will happen down to the exact day we do not yet know. However, what we do know is that under the current trends, it does appear to be nearing. Have we any excuse then knowing this, and failing to take evasive action, to then be shocked and angry when the time actually arrives?