{"id":2536,"date":"2010-04-08T10:51:57","date_gmt":"2010-04-08T15:51:57","guid":{"rendered":"http:\/\/philip.greenspun.com\/blog\/?p=2536"},"modified":"2010-04-08T10:51:57","modified_gmt":"2010-04-08T15:51:57","slug":"california-pension-systems-have-a-500-billion-deficit","status":"publish","type":"post","link":"https:\/\/philip.greenspun.com\/blog\/2010\/04\/08\/california-pension-systems-have-a-500-billion-deficit\/","title":{"rendered":"California pension systems have a $500 billion deficit"},"content":{"rendered":"

Here’s a report from some Stanford graduate students<\/a> estimating that the California pension systems are underfunded by approximately $500 billion or approximately $36,000 for every California household (i.e., taxes on Californians are likely to increase by $36,000 per household at some point in the next decade). The report covers only three of California’s pension systems, so the total overhang will presumably be larger. This report makes one realize the impossibility of being a municipal bond investor. You can’t rely on the ratings agencies, whose corruption and incompetence were exposed in the Collapse of 2008 (every bond was rated AAA until it became worthless and then Moody’s or S&P decided to downgrade it). You can’t rely on public budget numbers because pension obligations are obscure and may be hidden in union contract fine print. So why buy these assets? If you want a bond in dollars, buy a Treasury (the federal government can and will print money to pay you). If you want to get higher yield along with diversification, buy the sovereign debt of some other country, preferably in that country’s currency (since that is the only way to mitigate the risk of \u00a0a U.S. dollar collapse, as predicted by John Paulson<\/a>, the most successful investor of the last decade).<\/p>\n","protected":false},"excerpt":{"rendered":"

Here’s a report from some Stanford graduate students estimating that the California pension systems are underfunded by approximately $500 billion or approximately $36,000 for every California household (i.e., […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[1],"tags":[],"class_list":["post-2536","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"yoast_head":"\nCalifornia pension systems have a $500 billion deficit - Philip Greenspun\u2019s Weblog<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/philip.greenspun.com\/blog\/2010\/04\/08\/california-pension-systems-have-a-500-billion-deficit\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"California pension systems have a $500 billion deficit - Philip Greenspun\u2019s Weblog\" \/>\n<meta property=\"og:description\" content=\"Here’s a report from some Stanford graduate students estimating that the California pension systems are underfunded by approximately $500 billion or approximately $36,000 for every California household (i.e., […]\" \/>\n<meta property=\"og:url\" content=\"https:\/\/philip.greenspun.com\/blog\/2010\/04\/08\/california-pension-systems-have-a-500-billion-deficit\/\" \/>\n<meta property=\"og:site_name\" content=\"Philip Greenspun\u2019s Weblog\" \/>\n<meta property=\"article:published_time\" content=\"2010-04-08T15:51:57+00:00\" \/>\n<meta name=\"author\" content=\"philg\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"philg\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"1 minute\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/philip.greenspun.com\/blog\/2010\/04\/08\/california-pension-systems-have-a-500-billion-deficit\/#article\",\"isPartOf\":{\"@id\":\"https:\/\/philip.greenspun.com\/blog\/2010\/04\/08\/california-pension-systems-have-a-500-billion-deficit\/\"},\"author\":{\"name\":\"philg\",\"@id\":\"https:\/\/philip.greenspun.com\/blog\/#\/schema\/person\/448e4e6a0ae9105741a06dcf62cee50e\"},\"headline\":\"California pension systems have a $500 billion deficit\",\"datePublished\":\"2010-04-08T15:51:57+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/philip.greenspun.com\/blog\/2010\/04\/08\/california-pension-systems-have-a-500-billion-deficit\/\"},\"wordCount\":217,\"commentCount\":10,\"publisher\":{\"@id\":\"https:\/\/philip.greenspun.com\/blog\/#\/schema\/person\/448e4e6a0ae9105741a06dcf62cee50e\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\/\/philip.greenspun.com\/blog\/2010\/04\/08\/california-pension-systems-have-a-500-billion-deficit\/#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/philip.greenspun.com\/blog\/2010\/04\/08\/california-pension-systems-have-a-500-billion-deficit\/\",\"url\":\"https:\/\/philip.greenspun.com\/blog\/2010\/04\/08\/california-pension-systems-have-a-500-billion-deficit\/\",\"name\":\"California pension systems have a $500 billion deficit - Philip Greenspun\u2019s Weblog\",\"isPartOf\":{\"@id\":\"https:\/\/philip.greenspun.com\/blog\/#website\"},\"datePublished\":\"2010-04-08T15:51:57+00:00\",\"breadcrumb\":{\"@id\":\"https:\/\/philip.greenspun.com\/blog\/2010\/04\/08\/california-pension-systems-have-a-500-billion-deficit\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/philip.greenspun.com\/blog\/2010\/04\/08\/california-pension-systems-have-a-500-billion-deficit\/\"]}]},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/philip.greenspun.com\/blog\/2010\/04\/08\/california-pension-systems-have-a-500-billion-deficit\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\/\/philip.greenspun.com\/blog\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"California pension systems have a $500 billion deficit\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/philip.greenspun.com\/blog\/#website\",\"url\":\"https:\/\/philip.greenspun.com\/blog\/\",\"name\":\"Philip Greenspun\u2019s Weblog\",\"description\":\"A posting every day; 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