Saturday, March 19, 2011

They've left their minds, in San Francisco...

Spending money that isn't there...

If you think things are bad on the public employee pensions front for California, or even the U.S., check out what's happening in The City By The Bay.

To be honest, everyone - including SF's most "out there" boosters - admit the city is in the midst of a severe financial crisis. What most people aren't aware of is just how bad things have turned for "Baghdad By The Bay."

A story in The Bay Citizen lays it out for readers: "San Francisco's public-employee pension fund is in weaker shape than many people realize, according to an analysis by Professor Joe Nation released Tuesday. It is underfunded by some $6.8 billion, Nation's report finds. The city's pension fund is officially underfunded by $1.6 billion. Nation's study argues that the pension fund is relying on a 7.75 percent annual rate of return that is unrealistic over the long term. The study argues for 6.2 percent, which it says was the average rate of return in the capital markets from 1900 through 1999."

If you want a sneak peek at what is going to happen to California, check out San Francisco. If you want an advance look at what is going to happen to the U.S., keep an eye on California. And if you'd like a real-time view of what's ahead for everyone else, look at Greece.

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