How To Make $270k Without Even Trying

It'll be quite interesting when this Euro business is over and the markets start to consider the massive amount of municipald debt in the US. If California was a country it would be something like the 8th largest economy in the world, and it is totally bankrupt. It has roughly the same level of output as Italy and considering the damage that would be caused if Italy defaulted, it's easy to imagine the panic if / when California does.

Public sector employee rights are just absurd across the Western world in general. Having a pension linked to final salary? Thats a fantastic idea, who thought of that...... The public sector in general is what is crushing the West.

Well they've brought Jerry Brown back. If anybody can fix it, he can.

But yes, California's finances have been a total mess for a while now. Unfortunately, things will only improve when the people wake up and smell the coffee. Too bad they can't over the smell of all the cannabis.

"Unfortunately, things will only improve when the people wake up and smell the coffee."

thing is, people ALREADY smelled the coffee. they whined and fought and clawed their way to their legislators and everyone's salaries got increased at the expense of the state's coffers.

the state may be bankrupt but many californians have been having the time of their lives due to pumped up salaries.

Here's an analogy...CA default:US::Greek default:EU. With that said, I reckon things would get pretty rough around here.

Nurses making mid 6figs isn't that uncommon even in normal places. Yes, California is abnormal...

eventhough the state's budget is in such a terrible position, their govt is spending money like crazy. all the new construction inititatives being undertaken in northern california probably account for greater quantity than work being done by any other other state. ofcourse that just adds to debt.

Appreciate the post, Eddie. Here in muniland this is esp relevant

An oldie but a goodie (about a month) I appreciated is http://www.vanityfair.com/business/features/2011/11/michael-lewis-201111 - good commentary on the cultural crisis that Lewis discusses in more detail in Boomerang. Especially enjoyed the bits about San Jose

Help me out here. Serious question: how would California defaulting on its debt affect the rest of the country? On the surface it seems like investors would just move their money to other bonds, like U.S. Treasuries or other municipal bonds. Seems to me that worst case CA investors will take a hair cut after debt restructuring. People will feel embarrassment and nothing will change.

My only concern with a California default is that it will send more Californians out of state to Republican states where they will vote for the same failed policies in their new homes [see: Northern Virginia].

California default --> trouble for debtholders (bunch of large U.S. banks) --->financial market freakout , bank failures--> reduced credit availability for everyone, equity market plunge, etc --> slower economy, bad day

Also:

California default --> less spending by Cali govt on everything --> less demand for everything --> everyone makes less money --> financial markets freak out...etc etc

Basically its the same threat as for anything else thats too big to fail.

California: US != Greece: Europe. The fallout from a Cali default would be at least 10x worse as Cali's economy is MUCH bigger than Greece's and Cali has a much bigger share of US economy than Greece has EU

California is a failed state. Only good thing to come out of there has been Reagen. We can only hope an earth quake finally breaks Mexico Jr. off into an island where it promptly sinks.

This is exactly why we need public employee union reform. This is exactly why we need a secure border and strick immigration controls. This is exactly why we need a reduction in government and entitlements.

California is a perfect example of where liberals want to take the USA as a whole.

Bank defaults? How many banks would default because they took a 20% hair cut on their California municipal debt holdings?

I wonder what we will do in this country after drugs are legalized (for tax reasons) and gambling is fully legalized (for tax reasons).

If we could tax raping people I am sure the government would strongly consider it.

How about we legalize things and don't tax them.

sure its budget is screwed up but california's not as bad as you guys are making it sound like. there's pot smokers and bums but its also home to silicon valley and hollywood.

Gov. Brown came out with a plan today.

Saw this on our local news this morning. They were interviewing gov. employees and all the employees were saying was how 'it needs to be fair and equal'. I love California at times when I live in my little bubble, but then I walk outside my bubble for a little bit and realize that the majority of the state is filled with ITT Tech / HS Drop outs / Chicano studies major brain dead people.

http://www.bhcourier.com/article/Politics/Politics/Governor_Brown_Unvei…

"The Plan:

The pension reform plan I am proposing will apply to all California state, local, school and other public employers, new public employees, and current employees as legally permissible. It also will begin to reduce the taxpayer burden for state retiree health care costs and will put California on a more sustainable path to providing fair public retirement benefits.

1. Equal Sharing of Pension Costs: All Employees and Employers

While many public employees make some contribution to their retirement – state employees contribute at least 8 percent of their salaries – some make none. Their employers pay the full amount of the annual cost of their pension benefits. The funding of annual normal pension costs should be shared equally by employees and employers.

My plan will require that all new and current employees transition to a contribution level of at least 50 percent of the annual cost of their pension benefits. Given the different levels of employee contributions, the move to a contribution level of at least 50 percent will be phased in at a pace that takes into account current contribution levels, current contracts and the collective bargaining process.

Regardless of pacing, this change delivers real near-term savings to public employers, who will see their share of annual employee pension costs decline.

2. “Hybrid” Risk-Sharing Pension Plan: New Employees

Most public employers provide employees with a defined benefit pension plan. The employer (and ultimately the taxpayer) guarantees annual pension benefits and bears all of the risk of investment losses under those plans. Most private sector employers, and some public employers, offer only 401(k)-type defined contribution plans that place the entire risk of loss on investments on employees and deliver no guaranteed benefit.

I believe that all public employees should have a pension plan that strikes a fair balance between a guaranteed benefit and a benefit subject to investment risk. The “hybrid” plan I am proposing will include a reduced defined benefit component and a defined contribution component that will be managed professionally to reduce the risk of employee investment loss. The hybrid plan will combine those two components with Social Security and envisions payment of an annual retirement benefit that replaces 75 percent of an employee’s salary. That 75 percent target will be based on a full career of 30 years for safety employees, and 35 years for non-safety employees. The defined benefit component, the defined contribution component, and Social Security should make up roughly equal portions of the targeted retirement income level. For employees who don’t participate in Social Security, the goal will be that the defined benefit component will make up two-thirds, and the defined contribution component will make up the remaining one-third, of the targeted retirement benefit.

The State Department of Finance will study and design hybrid plans for safety and non-safety employees, and will fashion a cap on the defined benefit portion of the plans to ensure that employers do not bear an unreasonable liability for high-income earners.

3. Increase Retirement Ages: New Employees

Over time, enriched retirement formulas have allowed employees to retire at ever-earlier ages. Many non-safety employees may now retire at age 55, and many safety employees may retire at age 50, with full retirement benefits. As a consequence, employers have been required to pay for benefits over longer and longer periods of time.

The retirement age for non-safety workers in 1932, when the state created its retirement system, was 65. The retirement age for a state highway patrol officer in 1935 was 60. The life expectancy of a twenty-year old who began working at that time was mid-to-late 60s, meaning that life expectancy beyond retirement was a relatively short period of time. Now with a growing life expectancy, pensions will pay out not just for a few years, but for several decades, requiring public employers to pay pension benefits over much longer periods of time. Under current conditions, many years can separate retirement age from the age when an employee actually stops working. No one anticipated that retirement benefits would be paid to those working second careers.

We have to align retirement ages with actual working years and life expectancy. Under my plan, all new public employees will work to a later age to qualify for full retirement benefits. For most new employees, retirement ages will be set at the Social Security retirement age, which is now 67. The retirement age for new safety employees will be less than 67, but commensurate with the ability of those employees to perform their jobs in a way that protects public safety.

Raising the retirement age will reduce the amount of time retirement benefits must be paid and will significantly reduce retiree health care premium costs. Employees will have fewer, if any, years between retirement and reaching the age of Medicare eligibility, when a substantial portion of retiree health care costs shift to the federal government under Medicare.

4. Require Three-Year Final Compensation to Stop Spiking: New Employees

Pension benefits for some public employees are still calculated based on a single year of “final compensation.” That one-year rule encourages games and gimmicks in the last year of employment that artificially increase the compensation used to determine pension benefits. My plan will require that final compensation be defined, as it is now for new state employees, as the highest average annual compensation over a three-year period.

5. Calculate Benefits Based on Regular, Recurring Pay to Stop Spiking: New Employees

Where not controlled, pension benefits can be manipulated by supplementing salaries with special bonuses, unused vacation time, excessive overtime and other pay perks. My plan will require that compensation be defined as the normal rate of base pay, excluding special bonuses, unplanned overtime, payouts for unused vacation or sick leave, and other pay perks.

6. Limit Post-Retirement Employment: All Employees

Retirement with a pension should not translate into retiring on a Friday, returning to full-time work the following Monday, and collecting a pension and a salary. Retired employees often have experience that can deliver real value to public employers, though, so striking a reasonable balance in limiting post-retirement employment is appropriate.

Most employees who retire from state service, and from other CalPERS member agencies, are currently limited to working 960 hours per year for a public employer, and do not earn any additional retirement benefits for that work. My plan will limit all employees who retire from public service to working 960 hours or 120 days per year for a public employer. It also will prohibit all retired employees who serve on public boards and commissions from earning any retirement benefits for that service.

7. Felons Forfeit Pension Benefits: All Employees

Although infrequent, recent examples of public officials committing crimes in the course of their public duties have exposed the difficulty of cutting off pension benefits those officials earned during the course of that criminal conduct. My plan will require that public officials and employees forfeit pension and related benefits if they are convicted of a felony in carrying out official duties, in seeking an elected office or appointment, or in connection with obtaining salary or pension benefits.

8. Prohibit Retroactive Pension Increases: All Employees

In the past, a number of public employers applied pension benefit enhancements like earlier retirement and increased benefit amounts to work already performed by current employees and retirees. Of course, neither employee nor employer pension contributions for those past years of work accounted for those increased benefits. As a result, billions of dollars in unfunded liabilities continue to plague the system. My plan will ban this irresponsible practice.

9. Prohibit Pension Holidays: All Employees and Employers

During the boom years on Wall Street, when unsustainable investment returns supported “fully-funded” pension plans, many public employers stopped making annual pension contributions and gave employees a similar pass. The failure to make annual contributions left pension plans in a significantly weakened position following the recent market collapse. My plan will prohibit all employers from suspending employer and/or employee contributions necessary to fund annual pension costs.

10. Prohibit Purchases of Service Credit: All Employees

Many pension systems allow employees to buy “airtime,” additional retirement service credit for time not actually worked. When an employee buys airtime, the public employer assumes the full risk of delivering retirement income based on those years of purchased service credit. Pensions are intended to provide retirement stability for time actually worked. Employers, and ultimately taxpayers, should not bear the burden of guaranteeing the additional employee investment risk that comes with airtime purchases. My plan will prohibit them.

11. Increase Pension Board Independence and Expertise

In the past, the lack of independence and financial sophistication on public retirement boards has contributed to unaffordable pension benefit increases. Retirement boards need members with real independence and sophistication to ensure that retirement funds deliver promised retirement benefits over the long haul without exposing taxpayers to large unfunded liabilities.

As a starting point, my plan will add two independent, public members with financial expertise to the CalPERS Board. “Independence” means that neither the board member nor anyone in the board member’s family, who is a CalPERS member, is eligible to receive a pension from the CalPERS system, is a member of an organization that represents employees eligible to or who receive a pension from the CalPERS system, or has any material financial interest in an entity that contracts with CalPERS. My plan also will replace the State Personnel Board representative on the CalPERS board with the Director of the California Department of Finance.

True independence and expertise may require more. And while my plan starts with changes to the CalPERS board, government entities that control other public retirement boards should make similar changes to those boards to achieve greater independence and greater sophistication.

12. Reduce Retiree Health Care Costs: State Employees

The state and the nation have seen the costs of health care skyrocket. The state’s retiree health care premium costs have increased by more than 60 percent in the last five years and will almost double over ten years. This approach has to change.

My plan will reduce the taxpayer burden for health care premium costs by requiring more state service to become eligible for health care benefits at retirement. New state employees will be required to work for 15 years to become eligible for the state to pay a portion of their retiree health care premiums. They will be required to work for 25 years to become eligible for the maximum state contribution to those premiums. My plan also will change the anomaly of retirees paying less for health care premiums than current employees.

Contrary to current practice, rules requiring all retirees to look to Medicare to the fullest extent possible when they become eligible will be fully enforced.

Local governments should make similar changes."

i told my girl that we should to move to cali and have her work as a prison nurse while i day trade her money and she punched me in the head

PS I can see the LA county firefighters making 2X the median for the country simply because LA is more than twice as expensive as a normal city. Everything else, though, is ridiculous

If she was making that much extra capital just through overtime at least she was working. At a 90k base, with double pay overtime, she'd be working 80 hour weeks, minimum, all year. Looks like there are some professions out there where you can work quasi banker hours and make banker cash.

The point was not to put down the nurse working 80 hours and collecting $217k for it. It was to point out that she's doing 90 because they aren't managing personnel properly. They're getting rid of people who would work those hours at normal wages.

CA nurses are bad. doctors are just as evil. i have friends who now do their residencies in the UC system - their doctors get paid big bonuses on top of their base salaries. nurses too. they on purposely recommend the most expensive and unnecessary surgical procedures to bill medicare at the expense of the patient and american tax payers.

Brown's plan sounds pretty fucking reasonable to me. And both Midas and Eddie would likely call me a dirty liberal ;-)

...some of that shit made me vomit in my mouth. How can anyone argue with this common sense? None of it is overly dramatic from what I can see...just prevents abuse and makes adjustments that are needed.

For shits and giggles, see link:

http://www.sacbee.com/statepay/?name=brown&agency=CA+SENATE&salarylevel=

The UC system looks like a pretty big burden with respect to state salaries. And Jeff Tedford makes more than 10x the highest paid CA state senator, I hope the CA tax payer is getting their ROI on that investment.

I hope Jerry Brown can fix the cluster fuck that is the CA state government. But with the state legislature as inept and corrupt as it currently is, I doubt anything will be done about the state's budget.