Thursday, January 11, 2018

The tricky part

Under a legal doctrine known as the California Rule, pension attorneys across the state have said that once public employees start working, their retirement benefits can never be trimmed, even for benefits they haven’t yet earned. The unalterable benefit level was considered a constitutionally protected “vested right.”

The US Supreme Court does not want to rule that this is a fundamental violation.  Unions would rebel and threaten to cut off Swamp funding or support secession.  This is not something that can be easily Sotomayored, it is existential for California.

There is the other problem. Cal pensions funds are the ones melting up the market, allocating more to stocks so as to avoid a short term dropping of returns.  As long as California Rule is status quo, then Cal pension funds will drive a new market crash,  much worse than a correction. 

There is no real way out, one way or the other California is driving us to a recession. California will crash the markets or shut down local governments.


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