Could be a "preview of coming attractions" for a number of other cities in the not too distant future.

We always assumed that they would

Not after the precedent of the GM.

I'm old enough to remember when India's sacred cows were a topic of ridicule.

Let's see, you go to work for the City of Stockton. Before you take the job, the City promises you that if you put in 25 or 30 years of service, it will pay you a retirement of 2% multiplied by each year of service. You put in your 30 years, contributing 9% of your own pay each month to help fund the pension. You turn down a job or three, motivated in part or in whole by that pension. Because of an exemption available to public employers, there's no Social Security for you.

Now you're 68 years old, and you've retired from the City. The City hasn't put the money away to fund its end of your pension obligation. Instead, it has borrowed on your pension money to finance things like sports stadiums and parking structures. Because of those bad decisions, it's now seeking bankruptcy.

And the right result should be that the 68-year-old pensioner, someone with no other source of income, should get reduced pension benefits so that banks that made the loans can have a better looking P/L statement?

What starts in California, often ends up in the other 49 states - 1978's Proposition 13, for example. This will be an interesting case.

Then pension holders will eventually have to give up some of their claims. There just isn't going to be enough money left in the till to satisfy everyone.

They will cry that it is unfair, but they'll just have to put their big boy pants on and take a haircut along with the bond holders, banks, taxpayers, etc.

Bankruptcy is a bitch. But the way it works is, somebody owes you money, and they go under, and so you don't get paid in full. Happens every day. Get collateral.

Maybe if all of Stockton's pensioners made a LARGE campaign donation to the winning presidential candidate, they can get the same deal that GM retirees got.

The people who insured the bonds knew the risks they were taking.They can eat it. Federal law says municipal pensions are first in line for any municpal bankruptcy. Pay off all pensions first what ever is left, if anything, the insurers can have. Screw the crybaby insurers.

As situation is described by William Thompson, it's near impossible to blame the pensioner.

It is the city that has not practiced its fiduciary responsibility by not placing the pension funds into some sort of escrow, and perhaps misled the agencies providing the bond insurance. Who gets blames for previous incompetence?

As the story notes near the end, there is a need for pension reform in the public sector, and all defined benefit pensions with guarantees should be examined.

Next thing you know, they'll be looking to cut back Medicare and Social Security...

The insurance scam 'industry' is a crap shoot. But the way it works is, some people each pay you a (premium) portion of the largest loss one of them could, maybe, incur (by some plausible probability) in a function of time, and you keep all their money you collected; (you can 'play' with it, for the time being). Of a sudden unpredictably but not unexpectedly one you've insured goes under. So you the insurer have to pay out in full and be broke. It could happen any day; probably not, yet worry. Get a real job, exercise in Labor, don't play with other people's money or fortune fates.

Yeah, Stockton could be an interesting case except for one problem that voids all details, further news, and any final determination: American immoral government's Judicial branch is criminally and civilly corrupt -- like a fish rotted from the head, back -- dis-established Justice from the U.S. Supreme Court back to every municipal traffic court. Solomon got Alzheimer's, or some sort of neuropathy, psychopathy, sociopathy rot. I recall the announcement said, "impeachment is off the table, whaddaya gonna dowah bowddit, sue the Court a lawsuit?"
Foxes are judging the henhouse -- what does a fox look for in order to judge a hen?

Maybe judges better be come by the same way juries are come by. A pool of age&aptitude-qualifed candidates each receive a summons to appear for judge duty. Some selection procedure (maybe drawing lots) picks a judge from the pool for each case; leftover candidates are dismissed. After concluding the case the judge's job ends. S/he goes back to 'civilian' life.

Such Justice system, once established, might foster 'careerist' judges as happens today with 'careerist' (grand) jury sitters ... but the pay is minced, although adequate. Just saying maybe establish term limits throughout the Judiciary, one case per judge. And out. Are public employees in military gear term-limited too, one war per soldier?

Or do nothing, endure 'life' stenched with rotted fish. As now in Stockton any ruling or decision is of no interest, no value, no durability because American immoral government's Judicial branch is injust -- imbalanced fish scales justice.

Future Portland?

So the residents of Stockton are on the hook and the pols who wrote those contracts won't be liable or be sued for gummint malpractice. I see moving vans in the future.

Future Portland? Yeah. Future everywhere. Everywhere Fed Reserve Notes are 'legal tender,' that is, ever since petrodollars began. Read this picture
OilPoster.org

See this book: Web of Debt, by Ellen Hodgson Brown. Divest your so-called 'dollar' holdings, circulate beavermoney. Renormalize our lives.

"It is the city that has not practiced its fiduciary responsibility by not placing the pension funds into some sort of escrow..."

Ha-ha-ha-haaaaaaaa! That's funny. Did you just move to Portland?

We "fund" our PPB and PFD pensions ENTIRELY out of current operating revenues.

There is no "escrow", because there is no savings. Therefore there are no pension earnings. Just liabilities.