WHY 3 TRILLION MAY NOT BE OUT OF THE QUESTION

Think you have heard it all? The investment houses, the savings and loans, the banking industry and the auto industry, all sucking up to the government financial tit, so to speak. Well folks, you ain't heard nothing yet.

Think your 401K did badly last year? Well, if you didn't shuffle your money around to a money market (and if not, what were you thinking...the market was at 1400 for gawd sakes), it more than likely did. But your 6 figure 401K will rebound before you retire (hopefully), and you will recover the temporary setback well before you hit your sixties.

Others really took a hit in the market, like pension funds. Some have "defined contribution plans," the market rises and falls, and you take the profit, or take the hit. And these certainly bled over the course of the past year plus.

But that isn't the worst part, as heartbreaking as that is for many pre-retirement workers. The real issue is something called a "defined benefit fund." This plan guarantees you a certain amount of pension when you retire, a pre-set amount of retirement funds. The funds are still invested in various forms, including the market, only now the pension plan provider takes the profit, or the hit.

Made a lot of sense when you could throw a dart at a financial page, and come away with a winner in the market. The providers stood to reap major dollars in profits. In 2007, pension funds were at a surplus of over $60 billion dollars. Now? Try a $200 billion deficit.

In 2006, Congress passed the Pension Protection Act, which mandates that these pensions remain fully funded. Great bill but in actuality, of the 500 largest companies with pension plans, over 200 are nowhere even close to being fully solvent.

Still not seeing the big picture yet? Try this on out for size. The city of Vallejo, California filed for chapter 9 bankruptcy protection status due to its pension obligations.

Here's the big picture. These pension funds are staggeringly large. There are state, local and untold private numbers of pension plans. CALPERS the California plan for state employees is the largest public pension firm in the United States. Literally millions of state and government workers. They reportedly lost 28% of their value from January through October of 2008. But they could recoup some of these set backs and be OK, as long as they are not hit with a flood of retirees in the near future.

CalSTRS, the teachers pension fund, reportedly had over $400 billion in assets in 2007. They lost 20% of their value in three months of 2007 alone (they were investors of Lehman Brothers). In 2007, they were fully funded. Now, they are 66% funded.

They are not alone, and they are watching with delight at the governments willingness to consider huge stimulus bailout packages. The government tit is fully lactating and they have to be considering mozying up for some milk. For all of our troubles and for all of our concerns, imagine being a 30 year state employee about to retire. Kind of puts it all into perspective, doesn't it?