economic factors needless to say drove that city in part to bankruptcy and now the california public employees retirement system better known as cal pers is engaged in an historic fight in san bernardino according to business week it's trying to rewrite the rules for bankruptcy he's claiming that it should get paid before almost everyone else including bondholders so let's bring back in to ask her what is at stake here so kate long it's been cast as historic what is it stake here in this cal pers fight with san bernardino well basically the it's a question of if the pension rights or benefits of public employees are protected in a bankruptcy setting which means they would get one hundred percent on the dollar and what bond insurers are arguing is that what is owed to pensioners should be. in the same way that debt is here those are all liabilities of the community and helpers has no reason to ring sense or. protect the pension payments so what do you think would happen depending on how this ruling goes and what way to go go should. it's very it's very chapter nine bankruptcy for municipalities is federal law bu

went bankrupt and it's the first city to ever deliberately fail to pay calipers a california public employees retirement system calipers as you point out throughout the theme here is that the bond market is coming unglued whether it's the collateral that's being questioned holding up private equity shysters like paul singer or whether it's a municipality with a pension scheme that apparently has no ability to pay out its pensioners without growth to generate coupon payments to bond market which is as you say the last you know the ok bond corral you know this thing is to blow and this is what this is what these people don't understand who constantly say well there's no inflation there's no inflation no but there is kirstie collapse baked into the cake and you're about to get a vista right is hello helpers manages two hundred forty one billion dollars in assets and these are you know two hundred forty one billion dollars that state employees think they're going to collect soon and i remember this is the big battle going on between you know ninety nine percent ninety percent of the population of america has no ho

the california public employees retirement system is kind of a government agency, kind of a hedge fundmoney. we promised the returns will be big enough. you have big pots of money, financial, private sector players who also lobbied for and benefited from these overly generous pension programs. gerri: everyone was on the right side of the boat. the salaries went straight to the sky, and in some cases these data going into retirement at age 50 doubling what they make. the people who hired them are making much, much less which is the tragedy. when you're making when your employer, watch out. gerri: and the taxpayers are the employers. we get left out of this because the insiders circle of the union and the hedge funds and the politicians' campaign, the politicians that benefit from it. taxpayers are on the outside of the circle. gerri: that is for sure. thanks for coming on tonight. have a great holiday. merry christmas. come back in the new year. >> merry christmas. gerri: merry christmas. eight days left. no, i'm not talking about the fiscal cliff. i'm giving you a countdown to buying t

asked the states' two largest pension funds, the teacher's pension fund and the california public employees retirement system which is the biggest pension fund in the entire country he's asked them to purge their portfolios of gun manufacturers if their products are illegal in california. for the latest on the story i'm so pleased to be able to welcome inside "the war room," california state treasurer bill lockyer joining us by telephone from hayward california. bill, thank you for being here. >> nice to say hello again after many years. >> jennifer: for our viewers we served together as attorneys general and bill has served in many public positions. now as treasurer he's responsible for a very big portfolio and so how much money bill are we talking about with both of these funds? >> well, altogether, we're talking about $400 billion. but this particular investment that we're talking about was a little over $8 million. so that is the cerberus share of calstrs in this company was modest. it is still an important principle. we're all sort of struggling to try to figure out what's the right policy response. we

california spends money out of the general fund and get money in terms of federal transfers from various programs. they depend on that money. i won't get in to the whole question of the public employee retirement systems and a lot of these states. point number two, the demographic trends now unfolding are likely to make a bad situation worse. we are deeply in debt. according to the 2010 census, there are 40 million americans aged 65 and over. this year, there are 48 million people drawing benefits from medicare and 55 million drawing social security benefits. all of people draw those benefits who are under age because of disability and other reasons. even with these numbers, these systems are having difficulty. still, according to the census, there are nearly 80 million baby boomers born between 1946 and 1963. the leading edge of which passed age 65 in 2011. the census estimates as they age, there will be 72 million americans aged 62 and over by 2027. 40 million to 72 million. if we had an increment to account for those drawing benefits for those under age 65, we could have between 80 million and 90 million people trying old age benefits sometime during the 2020. this does not include the 55 million p