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Schwarzenegger: Public Pensions and Our Fiscal Future

online.wsj.com

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Re: Schwarzenegger: Public Pensions and Our Fiscal Future

#4

Post by nlavezzo »

robryan wrote: post #2

Who's lending California this money now? It seems quiet a risky deal.

Everyone who buys California state bonds (which are income tax exempt) is loaning the money. The interest rate California has had to pay to entice people to buy these increasingly riskier bonds, has increased accordingly as the state's financial condition has deteriorated. It is a risky deal, and buying CA state bonds to hold until maturity is basically a bet that the state will get bailed out by the federal government.

Re: Schwarzenegger: Public Pensions and Our Fiscal Future

#6

Post by alecco »

As a foreigner, this is like bizarre fiction.

  * Arnold Schwarzenegger, a former bodybuilder champion now politician
  * Governor of nearly bankrupt California
  * A state scammed out of 40 to 50bn by Enron and pals
  * AS career was supported by Enron (from Forbes)
  * Writing an opinion column on Fox owned WSJ against state pensions
My sympathies to all californians. The world owes you so much.

Re: Schwarzenegger: Public Pensions and Our Fiscal Future

#8

Post by crad »

jumby wrote: post #5

i like how the 2nd graph is totally wrong: those numbers aren't in billions, but in millions. i guess no one understands how to read graphs anymore

Where's the source of the 2nd graph being wrong? It's labeled as billions and the article mentions "This year, retirement benefits—more than $6 billion—will exceed what the state is spending on higher education."

That statement is in agreement with the graph.

Re: Schwarzenegger: Public Pensions and Our Fiscal Future

#9

Post by robryan »

nlavezzo wrote: post #4
robryan wrote: post #2

Who's lending California this money now? It seems quiet a risky deal.

Everyone who buys California state bonds (which are income tax exempt) is loaning the money. The interest rate California has had to pay to entice people to buy these increasingly riskier bonds, has increased accordingly as the state's financial condition has deteriorated. It is a risky deal, and buying CA state bonds to hold until maturity is basically a bet that the state will get bailed out by the federal governme…

Yeah I knew it would be bonds, just seemed like a risky proposition. I guess any responsible economic action here isn't going to be popular so it's not going to happen?

Hypothetically what would happen if the state decided to reform these pensions, slashing them right back to something they could realistically afford?

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