This is what happens when pension promises can’t be met–government files for bankruptcy and cuts them. What are Californians thinking? Politicians can’t be trusted with money. It’s not helping that investors supply piles of money buying municipal bonds to escape California’s taxes. When the music stops judges, who are on the dole too, won’t have much sympathy for Mr. Muni Bond vs the retired police officer. Dale Kasler reports here:
A bankruptcy judge handed CalPERS and organized labor a decision they’ve long feared Wednesday, declaring the city of Stockton has the right to reduce pension payments and even sever ties with the powerful pension fund.
The verbal ruling from U.S. Bankruptcy Judge Christopher Klein was groundbreaking. It pierced CalPERS’ aura of invincibility and made clear, for the first time, that public employee pensions in California aren’t sacred. Two years after Stockton filed for bankruptcy protection, buried under more than $200 million in bond debt, a judge has declared that a municipality can walk away from its obligations to the California Public Employees’ Retirement System.
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