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The Cato Institute’s Dan Mitchell and L.A. Mayoral Candidate Kevin James on the pension problems facing the Golden State.
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California is paradise for government workers.
Per person Texas actually has more of them.
But California pays better and gives out such generous retirement benefits that California will probably go broke.
Some fifty year old retirees were promised they can collect forever.
Well until late -- But actually after that too because -- spouse may collect after they die and the money just isn't there.
Dan Mitchell studies state pension problems nationally for the Cato Institute.
Kevin James is running to be mayor of Los Angeles so before we get to what Kevin discovered in Los Angeles.
How bad is this since is that these people want to be responsible I -- good thing.
I'm not sure they wanna be responsible I think the politicians want to get reelected at.
And the state government workers want to get as much as they can be for the whole house of cards comes tumbling down.
The problem is -- California is Greece the -- of America there are too many people riding in the wagon not enough people pulling the wagon.
Now they raise taxes or you're gonna see the productive people leaving this -- and more and more people living off the government.
Voted for more government but sooner or later nobody's there to pay the bills are they pay the workers -- in California.
But California desire -- the limit.
It does but even with all that that doesn't justify the difference between say 50000 dollar average wage salary vs 70000.
And California California is pricing itself out of the market.
Plus the benefits which going to this fund called calpers.
And they assume.
For years and 8% rate of return how we're gonna make so much money now they've just lowered it.
From seven point 75%.
To seven point 5% like that's responsible.
What are they get off thinking that they can make that rate of return why is that acceptable.
I would assume tonight I'm gonna party with Victoria's Secret supermodels I don't think it's gonna happen now.
And likewise I don't think that calpers is gonna meet those targets that it set and if they don't meet those targets.
It means -- -- product liability which is huge already will become enormous and they simply won't be able to pay it.
In this same way that Greece hasn't been able to pay its bills.
-- -- Kevin let's talk about Los Angeles here who.
Your running for mayor so we won't go into your campaign specifically but once you told me that astounded me.
Is that the Los Angeles City Council members are paid a 178000.
Dollars per year.
They are the highest paid legislative body in the nation -- You know -- -- we just had a councilwoman.
That Janice -- went to congress the House of Representatives and -- -- to take a cut in pay.
They made more money than United States senators -- Los Angeles City Council Los Angeles each councilman is given a car.
Well each -- I'll tell you something else that that really gets angelenos.
They get a car that has a license plate that says exempt.
So they can parking meters and they don't get tickets.
And in Los Angeles are parking tickets are through the roof and just as -- -- talking about in the last segment when all of these fines and fees.
That they keep wanting to take from people that come to Los Angeles.
It's not good for business it chases customers away from our city.
-- my local businesses and to neighboring communities where they don't get abused by City Hall.
178000.
Dollars per year in Los Angeles vs in Dallas 37000.
San Antonio 1400.
Well those are part time those -- part time city council's.
In -- say -- -- get a dollar and full time counsel.
It's not like let's -- Gonzales of course they did is so well -- audience put this in perspective nationally isn't a mindset in California that says.
Politicians just work magic and need to be compensated.
I think what happened is during the boom years in California effort for decades after world war until people -- just pouring into the state.
It was -- lot of opportunity great climate and insurers government can try our little bit more to get the great climate California.
But at some point.
He hit the tipping level.
Where Alba sun is just too expensive to create jobs it's too expensive to finance -- -- work -- is too expensive to maintain all these pensions.
But by the time he -- that level.
If more than 50% of the voters in your state are somehow riding on the wagon.
Are either government welfare beneficiaries government work her -- the retired living off government.
How do you ever change and that's what makes -- so pessimistic.
Beautiful state that I think is being ruined by big government.
Thank you Dan Mitchell and Kevin James.
-- so.
