(FOR PUBLICATION - COMMUNICATION TO THE EDITOR)

IN REPLY TO: http://www.redstate.com/laborunionreport/2010/12/18/and-so-it-begins-the-public-sector-ponzi-scheme-is-collapsing/

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Editor of the LaborUnionReport:

Please give me a call per your  article  of:  ..And, So It Begins: The Public-Sector Ponzi Scheme is Collapsin It appears to be very one sided. I also believe you truly do not know the "other side of the coin" per collective wealth amassed  from the hundreds of thousands of  government  pensions large and small.  A grouping of the largest  "local" government  pensions is about  4.5 trillion dollars and the large with the many thousands of small combined with federal included is about 21 trillion dollars.

I would not call taking over the domestic and world markets; banks; and insurance companies by investment a Ponzi scheme. The reality here for a more accurate title is: "Global Conquest and perpetuation of the same under an one-sided selective presentation". The Ponzi part is the losses and costs promoted to the public as on the grand scheme of things the global conquest is maintained and enforced through these massive funds collectively in the trillions of dollars exerted.

Selective presentation has always been the best tool for a thief or for the sly plunderer.

The #1 comprehension per selective presentation government is using in their attempt to extort money from the taxpayer "and" their own employees is shown and taught through the following example:

A pension is a fund designed whereby the investment return generated therefrom provides a revenue source to pay for a specific purpose. So when it comes down to government employee pension funds the taxpayer and the government employee pitch up (X) dollars that are now used to generate an investment return of (X+IR) is used to fund the stated purpose of  the fund with that being providing the government employee at retirement a salary and certain benefits (X+IR-SB=X)

Let's say the total (SB) at retirement is $100,000 which means (X) has to be large enough to generate an (IR) at least equal to (SB)

Here is where the selective presentation shell game is played out by the government boys to increase their own power-base. If the fund is new with a small balance, or old with a large balance, the more funds added the greater the power-base. You see the "power" is derived by controlling where those funds are invested "Globally". Companies or Countries can be made or broken based on where and how those funds are invested. The paybacks that take place in this arena are as grand and numerous as it gets within the trillions of collective dollars available to be applied.

Here is how the selective presentation works: Being that the payout from the fund from when someone starts participation until when they retire, it may be 20, 25, 30 years. The fund management has to ask themselves what will be the (IR) over the next 20,25,30 years whereby (X) will generate the (IR) to equal (SB) for the employees at retirement?

So...... let's say we use a projected (IR) of 10%  and as shown above we need $100,000 to equal the (SB) so that means the (X) needed at an (IR) of 10% needs to be $1,000,000

Gee,wasn't that easy, we needed one-million dollars at 10% return to pay the salary and benefit of $100,000 to the employee. Now using the same projections for return if we had 10,000 employees that would be ten-billion dollars needed. If we were looking at a state with 100,000 employees getting $100,000 (SB) at retirement that would be one-hundred billion dollars needed.

OK, so let's play the government shell game for power building... OK, you know what, I just don't believe we will get a 10% (IR). I think we are only going to get a 5% (IR). WOW, that means we need to put aside two-million dollars per employee..  Hmmm.... Bigger balances, bigger power base.. You know what, I think I am going to push the envelope a little bit....2008 was a bad year, investment losses are still fresh  in the population's mind,  I am going to say we are only going to get a 2.5% rate of return so that means we need to put four-million dollars away per employee to meet the (SB) at retirement.

Well gee folks, there is a big difference between 1 million dollars and 4 million dollars "per employee" especially as is the case when calculating for a hundred thousand or more employees that could be involved on the state level.

The shell game played boils down to when a bump in the road occurs as in 2008 (big one), they significantly and immediately drop the projected rate of return (IR) to a point where they then can say they are massively short on their standing balances (X) to meet the (SB) of the employees at retirement. In doing so they take more from the taxpayer "and" the government employee with the intent and purpose of expanding or maintaining their own power-base under management.

Now on the other hand when rates of return are doing much better over several years than expected they do not adjust the projected (IR), they keep it at the lower rate and thus continue to build their power base. I note that from 1990 until 2000 many of the large government pension funds were accomplishing an (IR) of 16% to as high as 23% per year but what the government employees were told was they were getting a 7% rate of return on their pension fund. You see they were being told what the rate of return was based on the "projection" being used and NOT what the "real" rate of return being accomplished for the fund they were participating with..

As a final note for this example: If you had a local government using a 5% projected rate of return but in fact they were getting a 10% (IR), if doing their requirements for funding of (X) using that "projected" 5% they could say the fund balance was well underfunded and contributions were needed when in fact if the 10% "real" (IR) was used they may be over-funded and be required to issue refunds back to the taxpayer and Government employees. There are many games that can be played with the "projected" liability vs. needed fund balances. I remember years ago one county from Missouri "projected" ten years ahead saying their employee base would be three times greater ten years out and they were taking taxpayer funds to go into the pension fund for three employees out of four who did not even exist yet so that they could build their power base quicker.

I have watched over the last several years as the government clan and their cooperatives in the syndicated media give selective examples of government pension shortfalls with always selective presentation applied. The intent was transparent of taking massive amounts of additional money from the taxpayer and the government employee. I have a feeling that in many a case if the public and the employee knew the basics as shown above and if they lifted a few rocks per the funds they were participating with, they may just find out they were; are; and those calling the shots for the future wish to continue to run a con on them via selective presentation.

Oh, let me leave you off with one last very important cognitive and earth shaking thought: As shown above government pensions were created to generate a revenue source by investment (IR) that generates the salary and benefits (SB) for millions of government employees and in doing so effectively over the last few decades drove the economy by where those trillions of dollars of investment capital were applied.

Now I ask you, what is taxation? Most people draw a blank on that question or try to over complicate the answer. The answer to that question is very simple. Taxation is a revenue source just as investment return (IR) is a revenue source. Well guess what? Any city, county, school district, or state can have the revenue source of taxation (T) replaced with the revenue source of investment return (IR). Instead of starting a pension fund having the purpose of meeting a salary and benefits (SB) what is started is what I call a TRF (Tax Retirement Fund) http://TaxRetirement.com that is started as a fund (X) having the purpose of generating an (IR) for meeting that local government's budgetary expenses (BE).  Now we have (X+IR-BE=X)

With this procedure and application of the TRF over time taxation be gone! First property tax replaced with the TRF (IR) then income tax; sales tax; corporate tax... and then no tax.

Keep in mind that for government pension funds to grow, government needed to expand their employee base, writing in exorbitant costs and projections to expand their investment power-base derived therefrom. This did create a bubble for the government structure as government collective wealth grew larger than it's own population.. Not a problem for the TRF application. TRF funds can grow, expand, and blossom without a bubble being created. Why do you ask? The answer there is: What grows with the TRFs is the global economy combined with the growth of public wealth and prosperity, government now has the realistic incentive for the first time to downsize.

You see the way the investment arena was set up before, government had the incentive to treat the public as a productivity resource to be drained and managed. This was not a good thing, far from it.. Deception, misrepresentation, strong arm tactics for theft, market manipulations to drain wealth out of the pockets of the people, expand-expand-expand became all to prevalent and easy "opportunity" for wealth transfer being the name of the game and word of the day.. When the inherent motives and intent are corrupt from the start the final  outcome is equally so the same.

What the TRF application does is it changes in a significant way the  motive and intent of government. No longer does government management have the incentive to treat the public as a productivity resource to be drained and managed but in the alternative government would want to see the people as wealthy and prosperous as possible.

No taxation; people have more to spend; higher rates of returns on investments made by the TRF (IR); more of a "revenue source" (IR) coming in for government to satisfy the budgetary expenses (BE).

Government also now has a real reason to limit its growth. No need to expand to justify larger investment funds, the TRFs takeover the whole show for all purposes and the investment arena will fluidly and productively expand well beyond anyone's current expectations driving the world economy for the next thousand years. The TRF is a Win - Win for all involved: The People; the investment arena; and Government. Down the road when TRFs are the standard and taxation has been phased out, upon the approval of government employees, their pension could be combined with the TRFs and all government employees could be paid directly therefrom "if" the employee chose to do so.

When will the TRF application burst forward as the standard? Well, Edison had a problem there also with the light-bulb. When he was trying to get that off the ground, many of the so called minds of the day replied back to him: "That will never work, we already have oil lamps and candles that do just fine" - "You would have to be crazy to think people will run those wires through their house and down the street to get that thing working".

Well, Edison  after time lit  up  a city block and all from around the world came running to do the same for their city block. The light-bulb shortly thereafter  became the standard across the globe. Per the TRF, sometime soon the TRF will light up one county in the US and shortly thereafter it will become the standard across the globe.

You see government in it's own zeal to take it all over by investment created the pool of excellent managers and the track-record from funds managed of trillions in (IR) generated from over the decades to implement and have the TRFs performing under the same model and management in the snap of a finger.

There is no: Can it work? Or: Is anyone doing it yet? You see it has been working and was being done for decades with a different "purpose assigned". The purpose assigned under the TRF is to eliminate all taxation. It is simply just "there" to be done. The spoon feeding you are getting from the syndicated media at government's queue is to make you think government did not do that well on their investment return. Well, quite to the contrary outside of this selective presentation government did very well and continues to do so on their domestic "and" international (IR).

What jolt from a cattle prod will be needed to get government back on track so that this Win - Win situation will go into play? I guess we are just going to have to find out the answer to that question based on the reality of what takes place from this point forward. I have been saying it for quite a bit of time now that it is essential that a few venues county; city; school district get up and running under the TRF principle and then the rest in droves would follow to do the same for themselves and in no time the TRF would become the standard of operation across the land.  Good intentions are one thing and having the clout with a few friends with backers to make it happen is another.

So what group of heavy-weights from their county are going to get together to make the TRF happen in their county first? We will see!

Please share this communication with your email list and OK to publish, post, and distribute.

Walter Burien - CAFR1.com
P.O. Box 2112
Saint Johns, AZ 85936

Tel. (928) 445-3532

PS: With the investment arena drawback from 2008 it is just perfect for the TRF to shift into gear come 2011... or as Gomer Pyle - USMC  would say: "Well, golly"

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Any local government can be restructured to meet their annual budget needs "Without" taxes. TRF (Tax Retirement Funds) paying for every City, County, State’s annual budgetary needs!

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