California's $198 Billion Shortfall (Los Angeles, Sacramento, Davis: 2013, loan, how much)

[SportyandMisty]

California public pensions $198 Billion Short | The Sacramento Bee

Chiang added the various California public pension systems to his already large fiscal database. One chart reveals that their “unfunded liabilities” – the gap between assets and liabilities for current and future pensions – exploded from $6.3 billion in 2003 to $198.2 billion in 2013.

Read more here: California public pensions $198 Billion Short | The Sacramento Bee

And that assumes a 7.5% real rate of return. Yeah, right. Are you getting a real (after inflation) 7.5% rate of return consistently on your portfolio?


I think in another thread people were pointing out that various trends are unsustainable. I believe this trend is also unsustainable. I wonder when the $ h i t will hit the fan.

[Tulemutt]

Originally Posted by SportyandMisty

I wonder when the $ h i t will hit the fan.

People have wondered that since before recorded history. It hits. Gets cleaned up. Hits again. Gets cleaned up again. Hits. Cleaned. Hits. Cleaned. It's a pattern. Like the weather.

[volosong]

Originally Posted by SportyandMisty

California public pensions $198 Billion Short | The Sacramento Bee

Wow! That's a lot of money. I wonder where it will come from. Can't bleed the taxpayer too much more than they already are. There's a whole lot of public sector union employees who may want to rethink their financial retirement future. Reading the article, it looks like we didn't get rid of Gray Davis soon enough.

[Gurbie]

Originally Posted by SportyandMisty

California public pensions $198 Billion Short | The Sacramento Bee



And that assumes a 7.5% real rate of return. Yeah, right. Are you getting a real (after inflation) 7.5% rate of return consistently on your portfolio?


I think in another thread people were pointing out that various trends are unsustainable. I believe this trend is also unsustainable. I wonder when the $ h i t will hit the fan.

THIS thread again?

[user_id]

Originally Posted by SportyandMisty

Yeah, right. Are you getting a real (after inflation) 7.5% rate of return consistently on your portfolio?

Yes, for the last 10 years my rate is higher, but they are assuming a 7.5% nominal rate (before inflation).

Originally Posted by SportyandMisty

I think in another thread people were pointing out that various trends are unsustainable. I believe this trend is also unsustainable. I wonder when the $ h i t will hit the fan.

Unfunded liabilities are a lot different than debt, this is merely a projection of a gap between existing and incoming funds and costs. The short-fall may never materialize

The guy writing this article is obviously trying to twist the truth, the report wasn't a "bomb shell" at all.. Why? Because the projections were worse a few years ago. Here is an article from 2010 reporting a $500 billion short-fall:

California's $500-billion pension time bomb - Los Angeles Times

This shows how fast these projections can change. In case, even if we took the $200 billion short-fall at face value.....it isn't a dire situation. This short-fall would be paid off over many years and the state brings in around $800~900 billion a year in tax revenue. These figures have to be cited in their proper context which of course is rarely done...

[cb73]

Originally Posted by SportyandMisty

And that assumes a 7.5% real rate of return.

That also assumes that all the government employees will live to their 80's to enjoy all this money.

I know a LOT of them who paid into the pension system for 30 or 40 years and then died shortly before or after retiring.

I didn't read the article--don't care for the Sacramento Bee anti-State employee slant--but did they mention how many times that the CalPers pension fund has been raided by the governor to backfill the budget for the public programs? Always a "loan" and generally never paid back. There are laws in place that private companies can never raid their employee's pension fund for any reason, but it's always been ok for the state to do it.

[Tulemutt]

Originally Posted by volosong

looks like we didn't get rid of Gray Davis soon enough.

Gray Davis ? I heard it was Obama's fault.

[Tulemutt]

Originally Posted by Gurbie

THIS thread again?

Like the weather. Always a safe topic of conversation when people are uncomfortable with silence in the room.

[Tulemutt]

Originally Posted by user_id

Yes, for the last 10 years my rate is higher, but they are assuming a 7.5% nominal rate (before inflation).


Unfunded liabilities are a lot different than debt, this is merely a projection of a gap between existing and incoming funds and costs. The short-fall may never materialize

The guy writing this article is obviously trying to twist the truth, the report wasn't a "bomb shell" at all.. Why? Because the projections were worse a few years ago. Here is an article from 2010 reporting a $500 billion short-fall:

California's $500-billion pension time bomb - Los Angeles Times

This shows how fast these projections can change. In case, even if we took the $200 billion short-fall at face value.....it isn't a dire situation. This short-fall would be paid off over many years and the state brings in around $800~900 billion a year in tax revenue. These figures have to be cited in their proper context which of course is rarely done...

Umm, nailed it. I been pointing this shirt out to people for years. It hasn't happened yet. And crystal balls are notoriously distorted no matter how much you shake them to make the snow fall.

[chuckmann]

Originally Posted by Tulemutt

Umm, nailed it. I been pointing this shirt out to people for years. It hasn't happened yet. And crystal balls are notoriously distorted no matter how much you shake them to make the snow fall.

Kinda like Climate Change ...