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Sometime next year we will see cities ready to file for bankruptcy, due to payments to pension plans.
In two years the unfunded liabilities for all the government pension plans in California will be 5.5 times our revenues.
Totally unsustainable. "The independent Milken Institute has just released a report “Addressing California’s Pension Shortfalls” that has an alarming finding: assuming no corrections are made, the combined liability of the three major state pension funds (Cal-PERS, CalSTRS, and UCRS) will swell to 5.5 times the total state tax revenue by as early as 2012! The study states that a solution needs to be found quickly and equitably by all parties, including unions, to avert catastrophic cuts in state services."
Why? Because government is openly lying, "The conventional discount rate used by these pension funds (7.75 percent to 8 percent) artificially makes the amount of liabilities appear smaller. It is unrealistic in this economic environment to base retirement fund investment returns on around an 8 percent per year when 30-year bonds are hovering a little over 5 percent. If the lower and more realistic bond discount rate is used the actual magnitude of the pension liability will become more apparent."
Government policies are going to keep California in a Depression for at least a generation.
Get angry or get poor.
More...
In two years the unfunded liabilities for all the government pension plans in California will be 5.5 times our revenues.
Totally unsustainable. "The independent Milken Institute has just released a report “Addressing California’s Pension Shortfalls” that has an alarming finding: assuming no corrections are made, the combined liability of the three major state pension funds (Cal-PERS, CalSTRS, and UCRS) will swell to 5.5 times the total state tax revenue by as early as 2012! The study states that a solution needs to be found quickly and equitably by all parties, including unions, to avert catastrophic cuts in state services."
Why? Because government is openly lying, "The conventional discount rate used by these pension funds (7.75 percent to 8 percent) artificially makes the amount of liabilities appear smaller. It is unrealistic in this economic environment to base retirement fund investment returns on around an 8 percent per year when 30-year bonds are hovering a little over 5 percent. If the lower and more realistic bond discount rate is used the actual magnitude of the pension liability will become more apparent."
Government policies are going to keep California in a Depression for at least a generation.
Get angry or get poor.
More...