Country in peril says state economist

February 6th, 2009 by Ken

Joe Dear, the executive director of the Washington State Investment Board, told the Hawks Prairie Rotary Club Friday, that the United States is in great danger.   “Our nation’s peril has never been greater,” Dear said.  “The choices our leaders make will have a major impact on our country and its future.  He said, “not acting is not an action.”

Dear, the head of the state investment board holds $50 billion worth of state money in various funds which pay the retirement benefits for 453,000 state retirees.  A year ago the fund had nearly $70 billion.  It has lost $16 billion in assets in just a short period of time. 

“Every investment is losing money,” he said, “we’re just losing it less slowly than others.  There’s no place for investors to hide.”

Dear is optimistic, but only as it relates to the long term.  “Our economy is characterized by cycles,” he said.  “That’s a product of our capitalistic system.   You have to believe that things will get better – – because they will.”

Dear will soon be leaving his job to take over as the chief investment officer for the California state retirement system.   A system in worse shape than Washington and holding $178 billion in investment.  He said they were looking for someone who met two criteria – – “smart enough to do the job and dumb enough to take it. I met both criteria.”

As for Washington’s system, it currently pays out about two percent of its money every year.  Dear said that will probably rise to three or four percent depending on what reduced contributions are included, or not included, in this biennium’s budget.

“If investments don’t turn around we’ll be in deep trouble by the 2011-2013 budget,” he said.

Dear said only a massive stimulus package funded by the federal government would be able to bring this country out of its economic troubles.  When asked how much, he said “trillions.”

He called for bold action on the part of the government.  “This country has shined when it acts bodly,” Dear said.  “This current situation is the economic equivilent of war.”

Posted in Business, Government, History, The Real News

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