Posted on 08/21/2010 9:37:17 AM PDT by SmithL
For the past year, Gov. Arnold Schwarzenegger has warned that CalPERS was heading over a cliff and pawning off its financial problems on future generations.
Now he wants to borrow $2 billion from the California Public Employees' Retirement System to help fix this year's state budget.
The governor's plan represents an apparent about-face – and raises questions about the long-term costs. The last time the state borrowed from CalPERS, it had to pay the pension fund $400 million in interest. More borrowing would surely bring more interest expense, experts said Friday.
CalPERS is obliged to "treat the loan as they would any investment," said Keith Brainard, research director at the National Association of State Retirement Administrators.
Schwarzenegger's proposal comes after he belittled CalPERS for implementing a formula that blunted the impact of its huge 2008 investment losses, pushing some of the burden into future years.
The formula is a "very expensive loan," his economic adviser David Crane said in December.
(Excerpt) Read more at sacbee.com ...
Borrow and spendAnything to keep on Spending
Oh, for %#*s sake.
“The governor’s plan represents an apparent about-face”
What else is new? Ahnold has flip-floped on just about everything else.
They have to cut spending and stop gambling on a strong economic recovery. If CA doesn’t cut spending more they run a very real risk of running out of cash in the next two years and being unable to borrow at reasonable interest rates. California bonds are starting to turn into a Ponzi scheme where the state is borrowing from new investors and using that money to pay the interest on existing bonds. That can’t continue much longer because eventually investors will see too much risk of taking a haircut on principle repayment at bond maturity.
A good Democrat.
Tax and Tax
And Spend and Spend.
Tax and Tax
And Spend Again.
And so it goes ad nauseum. However as you read this the vultures are feeding on the rotting carcass of this once great nation.
Stop and think of your grandchildren for a moment.
Arnold has had a tough time as governor. He inherited a bloated oversized budget and a huge financial mess from Davis, and he doesn’t have the financial expertise to deal effectively with this kind of a crisis. He was slow to figure out how bad this budget crisis could get and he didn’t insist on spending cuts soon enough.
Nothing but a bunch of crack addicts.. more more more.
It’s not just budgets. He vetoed gun control bills mandating microstamping and registring ammo sales more than once, then turned around and signed it. He vetoed bans on recreational gold dredging twice, then signed it. He was for offshore drilling, then changed his mind because he said he saw pictures of the gulf oil spill on TV. It’s what happens when you have no real core beliefs.
Well there’s no way all those government pension benefits can possibly be paid in CA and many other places. This has been a (fairly comical) game of liar’s poker, where the public employee unions lie to the lawmakers about how hard they work and what a great job they do, then the lawmakers lie to the unions and tell them we can’t give you big raises but we can pay you big pension benefits in 20+ years...lol. They’re all lying to each other and none of it is true—the public employees don’t work that hard and do a lot of useless bureaucratic activity, and government won’t be able to pay those big pension benefits, which will ultimately have to be greatly reduced. The only public employees who are worth the money they are paid are the US military, the FBI, and the state and local police, and that’s because of the risk of physical attack in those jobs.
The tragedy is that CalPers already is broke. Yes, they have lots of investments, but the funds they have are millions, if not billions, of dollars less then is needed to meet future pension liabilities.
CalPers has been going off the reservation for years, ever since their Board of Directors has fallen into the hands of unions. As a result, CalPers has been making investments in numerous union pet projects which were not fiscally sound. So, CalPers has lost a bundle in invested pension funds.
Now, Arnold, AKA the idiot in the governor’s seat, wants to borrow money from CalPers. He wants to borrow money from an underfunded pension plan to provide operating expenses for the state. Not sure if Obama is even that dumb.
This state is so F’ed up, the best alternative would be for it to file bankruptcy and negate all of the huge union contracts. Same goes for many of this state’s cities. Let’s start over, but first, let’s tar and feather every corrupt politician in the state.
What are some of the “union pet projects” in which CALPERS invested? That sounds like some kind of private equity deals.
All of that is true and I think also Arnold got a lot of bad advice from liberals in the Kennedy family.
This would be a great idea if a CONSERVATIVE was doing it.
First, borrow the money from CalPers.
Second, distribute the entire amount to state TAXPAYERS proportionally to taxes paid.
Third, default on the loan.
Fourth, make lots of popcorn and watch the government employee unions go nuts after they figure out that all the money they have stolen from the taxpayers was just stolen back and returned to the rightful owners!
I like the idea but I think the step you missed is the one where Federal taxpayers are placed at risk to pick up the tab. It is very satisfying however to see CALPERS in position to be, how do you say, “prison raped” for the funds the state needs to stay afloat. They spent so many pious years as the “corporate conscience” buggering up shareholder meetings with politically correct pronouncements and agendas. It’s nice to see them being victimized. Ever so slowly.
This next election is a very important test for California voters. If they elect Brown instead of Whitman, even after democrats caused a huge fiscal disaster since Wilson left office, that would prove that the voters don’t know what’s going on in their own state and it would probably lead to a severe cash crisis and effectively bankruptcy for CA.
I don’t care if Meg Whitman is spending too much money on her campaign. She still knows 100 times more about business, finance, and economics than Jerry Brown knows, and if the voters elect Brown that will prove that the voters are hopelessly dumb and uninformed, and mindlessly dependent on government. At this point, I think the California economy is so bad that Whitman will probably win in a squeaker. She should win in a landslide but there are so many idiotic voters in CA that she’ll probably only win by 1-2%.
So did Obama. Is that some kind of excuse?
No. It proves nothing of the kind. There are a whole slew of variables involved, many having to do with the GOP candidate herself.
It was not the consumers fault that New Coke failed.
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