Synopses & Reviews
California's unfunded public pension liability, when measured correctly, is two to four times larger than official government estimates. The failure to fully fund the pension promises has allowed the current generation to receive public services that they are not fully paying for, pushing the pension problem onto future generations. California Dreaming explains how six reforms would solve the state's pension problem in an equitable, responsible, and moral way: preserving pension benefits already earned, providing competitive pensions going forward, and granting the flexibility needed so that future generations are not paying for deals they did not make.
Review
“Mayors, governors, and other policymakers around the country are struggling to maintain services while paying for the skyrocketing costs of public employee retirement benefits.
California Dreaming explains why it is so difficult to solve this problem and identifies a key framework for solutions.” —Chuck Reed, former Mayor, City of San Jose, California “
California Dreaming exposes the financial and political quagmire of local and state governmental pensions in California, in a comprehensive, critical, yet solvable manner. Dr. Lawrence J. McQuillan represents the Boswell to those analysts, commentators, and civic independents who have disregarded the spiraling, post World War II, public-pension plans, the impoverishing fiscal crisis politicians love to bury. The book is concise, literate, and instructive for elected and appointed public officials and, especially, taxpayers gulled by their leaders.” —Quentin L. Kopp, former State Senator of California; former Judge, San Mateo Superior Court; former President, San Francisco Board of Supervisors “Governments have a tendency to commit to tasks that they really cannot deliver on. Public pensions are an example of this general tendency. Generous promises are made and then underfunded because of the pressures of elective office.
California Dreaming provides very useful evidence of both the generosity of the unsustainable promises made to California's public-sector employees, and the failure to fully pay for those promises. The result may be a fiscal catastrophe for Californian taxpayers and retirees in the not-too-distant future—unless this very timely book’s reforms are adopted in the next few years.” —Roger D. Congleton, BB&T Professor of Economics, West Virginia University
“The message of this highly readable volume is both realistic and hopeful: The California public pension system is an economic time bomb, yet the explosion is not inevitable. Lawrence McQuillan points the way to six reforms that would not only defuse California’s problems but would also benefit other states in the same predicament. I recommend California Dreaming to anyone who wants to understand the scope of the public pension crisis, how we got there, and what we can do to effect a permanent solution.” —William E. Simon, Jr., Co-Chairman, William E. Simon & Sons, LLC; former Candidate for Governor of California; former Assistant U.S. Attorney for the Southern District of New York “In California Dreaming, McQuillan provides a beautiful case study of the way politics operates to produce public pension policies based on an insidious form of hidden deficit finance that harms future generations and undermines sound policies today. We may hope that his trenchant analysis of California’s problems will serve as a guide to much needed reform of local, state and federal government policies.” —Edgar K. Browning, Professor Emeritus of Economics, Texas A&M University
Review
“Lawrence McQuillan's California Dreaming is a superb, wake-up call to all those depending on generous pensions from state and local governments—they simply won't be there, or at least in the amounts expected. The book is also a wake-up call to California taxpayers—who will be shocked to learn of the huge tax liabilities they face. McQuillan explains how governments have created this mess and offers sensible reforms to end the crisis and preserve retirement benefits—without bankrupting taxpayers.” —James C. Miller III, former Director, U.S. Office of Management and Budget; former Chairman, Federal Trade Commission; former Executive Director, Presidential Task Force on Regulatory Relief
Review
“California Dreaming is a horrifying must-read that exposes the steal-as-you-go policies driving the state (and our country) straight down the tubes!” —Laurence J. Kotlikoff, William Fairfield Warren Distinguished Professor and Professor of Economics, Boston University; former Senior Economist, President’s Council of Economic Advisers
Review
“Unfunded public pensions and healthcare are the greatest threats to government financial stability in our country. Over 80% of the government bodies in California are headed for bankruptcy for owing more than a half trillion dollars in unfunded pension and healthcare debt. Mounting debt will force the closing of public libraries, parks, and schools. Police and fire services will be cut, streets will be in disrepair, and we will find ourselves living in a Third World country. Lawrence McQuillan’s outstanding book California Dreaming spells out these disasters about to happen with perfect clarity.” —Richard J. Riordan, former Mayor, City of Los Angeles, California
Review
“California Dreaming is as important as an early warning of an impending tsunami. Ignoring its message would be equally irresponsible. Underfunding fixed pension benefits for California employees with an inadequate portfolio of risky assets will eventually fail catastrophically. Almost everyone, particularly future taxpayers, will suffer. As with a tsunami warning, quick action offers the opportunity of minimizing the damage from current policies. Lawrence McQuillen offers a thoughtful menu of policy reforms which would improve the situation dramatically.” —John B. Shoven, Charles R. Schwab Professor of Economics and Trione Director of the Stanford Institute of Economic Policy Research, Stanford University
Review
“Politicians must learn not to make retirement finding decisions for city and state employees and not be able to fulfill them. It is unfair to current and future employees as well as the general public to carry the financial burden of past, unrealistic, unfunded liabilities. California Dreaming is the right book at the perfect time to explain the issues and suggest a realistic approach. The public needs to hold politicians much more accountable or suffer the financial consequences.” —Frank M. Jordan, former Mayor and former Chief of Police, City and County of San Francisco, California
Review
“California, the canary in the coalmine for practically all of America’s states, faces an enormous and largely unacknowledged crisis in its system of pensions for teachers and other public employees. In California Dreaming, Lawrence J. McQuillan writes that those pensions ‘are like tapeworms in the guts of public treasuries.’ The result is a shortfall of more than half a trillion dollars. The good news, though, is that McQuillan has the answer—a handful of reforms to fix California’s pension problem permanently, and a lesson for the rest of the states in this very important, timely, and well-researched book.” —James K. Glassman, Visiting Fellow, American Enterprise Institute; Member, SEC Investor Advisory Committee; former U.S. Under Secretary of State for Public Diplomacy; former Publisher, The New Republic; former President, The Atlantic Monthly
Review
“California’s policymakers are living in Fantasy Land, as they downplay the depth of the state’s pension crisis. In California Dreaming, Lawrence McQuillan does a remarkable service explaining why the public pension systems are broken. He then offers sensible solutions for fixing them, and all California officials should listen. This is a great book for anyone who wants to understand an issue that unless averted will erode public services, destroy budgets and bankrupt our future.” —Steven M. Greenhut, columnist, U-T San Diego
Review
“In California Dreaming, Lawrence McQuillan does a great job of clearly explaining how the mismanagement of California’s state pension plans has led to massive unfunded pension liabilities. McQuillan offers sensible policy reforms to address California's pension crisis, and explains why all Californians would benefit from those reforms. Unfunded pension liabilities plague many states, and this book offers the clearest explanation on how the problem arises and how it can best be addressed.” —Randall G. Holcombe, DeVoe Moore Professor of Economics, Florida State University
Review
“Public employee pensions could be the next fiscal crisis—trillions of dollars placed in increasingly risky investments, managed by organizations with little understanding of the risks, operating under accounting rules that provide little transparency for elected officials and citizens to understand what is going on. Lawrence J. McQuillan’s important book California Dreaming shows how the Golden State’s pension system encouraged policymakers to promise too much, fund too little, and take excessive risk with the plan’s investments. But McQuillan does not merely have lessons for Californians. Citizens across the country need to learn more about the risk posed by public pensions and how to fix those plans, and California Dreaming is a great place to start.” —Andrew G. Biggs, Resident Scholar, American Enterprise Institute
About the Author
Lawrence J. McQuillan is a Senior Fellow and Director of the Center on Entrepreneurial Innovation at the Independent Institute. He received his Ph.D. in economics from George Mason University, and he has served as Chief Economist at the Illinois Policy Institute, Director of Business and Economic Studies at the Pacific Research Institute, Research Fellow at the Hoover Institution, and Founding Publisher and Contributing Editor of Economic Issues. Dr. McQuillan’s books and major studies include A Brighter Future: Solutions to Policy Issues Affecting America’s Children, California Prosperity: Roadmap to Recovery 2011: Ten Steps to Return California to Prosperity, Jackpot Justice: The True Cost of America’s Tort System, Tort Law Tally, U.S. Tort Liability Index, The Facts about Medical Malpractice Liability Costs, U.S. Economic Freedom Index, An Empire Disaster: Why New York’s Tort System Is Broken and How to Fix It, Tort Law Tally: How State Tort Reforms Affect Tort Losses and Tort Insurance Premiums, Bringing More Sunshine to California: How to Expand Open Government in the Golden State and The International Monetary Fund: Financial Medic to the World? In addition, he is the author of more than 350 articles in such leading outlets as the Wall Street Journal, New York Times, Chicago Tribune, Los Angeles Times, San Francisco Chronicle, Investor’s Business Daily, Forbes, USA Today, New York Post, and Encyclopaedia Britannica. He further created the California Golden Fleece Awards to highlight a state or local spending program or regulation that fleeces California taxpayers, consumers, or businesses. He has been an advisor for the California State Assembly Judiciary Committee, Socioeconomic Council of Madrid, Colorado Governor Bill Owens, Heritage/Wall Street Journal Index of Economic Freedom, Governor Arnold Schwarzenegger's task force on a constitutional spending limit for California, California State Senator Tom McClintock, Tax and Fiscal Policy Task Force of the American Legislative Exchange Council, Law and Judiciary Policy Committee of the Georgia Chamber of Commerce, Swedish Office of Science and Technology, Adriatic Institute for Public Policy, and elsewhere. Dr. McQuillan has appeared on NPR, Fox Business Network, CNBC, C-SPAN, CNN, and radio stations across the U.S. He lives in Fremont, California.