Parnell’s political bubble will burst, hurt Alaskans

Bubbles exist in politics just as they arise in stock markets and property values. Alaskans saw bubbles burst in the dot com collapse of 2000 and the property value and market collapse of 2008-2009. The effect of the 2008-2009 collapse was directly felt by all Alaskans in annual damage done to our Permanent Fund Dividends for the last five years. The 2014 PFD has rebounded only because 2009 losses were dropped from the five-year PFD calculation. All Alaskans should know bursting bubbles hurt them.

Excessive political optimism [irrational exuberance] creates bubbles. Bubbles burst when they collide with reality.

A political bubble exists now in Alaska. The only question is when Gov. Sean Parnell’s bubble will burst.

Parnell’s bubble of deception grows large under House Bill 385, which imposes upon our grandchildren more of the burden to pay the current unfunded PERS/TERS liability. Buck Consulting [David Slishinsky] has told the Alaska Retirement Management Board there will be “an increase in unfunded liability for eight years” and for the first year “you’re not even paying interest on the unfunded liability.”

Combine this with Parnell’s oil throughput projection, by Alaska’s Office of Management and Budget, of continued declining Trans-Alaska Pipeline System throughput for the next 10 years. Where are Alaska’s grandchildren going to get the money to pay this current debt? Parnell does not fully answer this question. It is likely that our grandchildren will not be able to pay the debt Parnell imposes upon them. Since our grandchildren can’t vote, it’s like stealing candy from a baby for Parnell to leave this debt for them to inherit.

Assuming “only” a $9 billion unfunded PERS/TERS debt under House Bill 385, the lost yearly opportunity cost at 8 percent (the loss of earnings today and into the future on the unfunded amount) is greater than $700 million per year. How much of that $700 million yearly lost revenue is Parnell going to impose upon each Alaskan; when will Parnell take away your PFD forever? Sooner than you think! With billion-dollar deficits created by Parnell, Alaska may be headed toward a train wreck, and not away from it. Fluff talk of increasing throughput and that increasing oil throughput paying for his tax cuts or the unfunded liability is irrational exuberance. A bubble exists.

Additional cost measured in the millions under HB385 will be transferred to the taxpayers of the Fairbanks North Star Borough and other municipalities. HB385 is “By Request of the Governor.” Parnell, smiling at us all the time, knows he is shoving his hand deep into our collective pocket, but you should be worried he is eyeing your individual pocket as well. A compound crushing of local government will occur 1) when more debt is imposed upon the borough and 2) state educational funding continues to be minimized — another of Parnell’s goals.

HB385 imposes more costs on borough and municipal taxpayers but Parnell will also go directly after the Permanent Fund earnings, which is the source of your family’s PFD checks. According to Parnell, Alaska’s resource wealth is not for you. The rich and richest got their tax cuts and keep their wealth while Parnell is digging into your pocket both as a borough resident and individually.

Parnell’s political bubble will burst and you can bet he won’t get hurt. Parnell and his cronies have created the bubbles to dupe voters into believing unsupportable, excess political optimism. Alaskans, however, will feel real economic pain.

Alaska’s National Guard is in crisis; facts show Parnell had knowledge of sexual predation and rape for years. Parnell, as the guard’s highest political leader, did little to nothing in response to predation upon the innocent. This scandal grows more serious every day. This bubble around Parnell is deflating.

There is growing disconnect between Parnell’s bubble talk about 1,000,000 barrels per day from Prudhoe Bay and Kuparuk and reversing TAPS decline when sworn testimony by ConocoPhillips and ExxonMobil to the AOGCC states there is no increasing throughput in the foreseeable future.

Parnell postures he is tough with the oil industry but the posturing is all mirage — a false image. He and Big Oil are like puppet and puppeteer.

The bipartisan savings, which reached about $17 billion, are being decimated under Parnell. Alaska’s savings will dwindle to about $10 billion by the end of fiscal year 2015. Where will Alaska get the money to buy our interest in a large diameter gas line or to invest in any large capital project or pay tomorrow’s unfunded liability?

Parnell’s political bubble in Alaska will burst. The only question is whether voters will act to protect themselves from Parnell’s dangerous bubble by Election Day.

Joe Paskvan is a Fairbanks attorney and a former Democratic member of the Alaska Senate.