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Richard Rider

Once AGAIN our CA household pension debt soars. Make it stop!

Four days ago I posted here the dramatic increase in the California per household debt imposed by underfunded state and local pension guarantees.  Using the “market pension” earnings expected/required, this debt went from $77,700 per CA household in 2014 to $92,748 in 2015, making us easily the second worst state in the nation.
http://www.flashreport.org/blog/2016/12/03/the-new-state-public-employee-pension-debt-figures-are-out-oh-dear/

Sadly, we just today got a more recent update — an estimate as of end of the last month (November, 2016). It’s gotten even worse. Incredibly, by a lot!  See the chart below.

We’ve gone from $92,748 CA household debt at the end of 2015 to $106,848 as of last month.  Egad!

The only good news is that since 1 December the stock market has rallied nicely (confounding progressives and their doomsday predictions).  But since the end of the month the S&P 500 is currently up only 1.14% — not enough to offset the burgeoning pension debt obligation of California taxpayers.

Indeed, when you consider that rising interest rates are driving down the value of fixed assets in the pension funds (primarily bonds), the total pension fund return of late is likely minor, if not negative — quite a bit shy of the projected 7.5% annual return pension defenders like to use to claim their investment funds are sufficient.