If you’re writing a check to the government tomorrow for tax day, you’re probably not too happy about it.  At least you’re not suffering like John Paulson, the hedge fund manager, who is writing checks to the Fed and state for over $1 billion – on top of the $500 million that he paid in estimates last year.

I know, I know: it’s a high class problem that we would all want to have since it would mean making billions of dollars.  According to the Wall Street Journal, who covered the story last week, the IRS won’t accept a check for $1 billion; they won’t take checks over $99.99 million (click here for the link).  Maybe he’ll write them 10 checks to avoid a $25 wire fee.

Paulson is famous because he bet against housing before the 2008 financial crisis, and, importantly, he bet big.  His main fund, the Credit Opportunities Fund, had about $3.5 billion at the end of 2007.  His bet against housing resulted in a 340 percent gain for his investors that year, and vaulted his fund $15 billion in assets.

Better yet for Paulson, he gets a percentage of the profits, which apparently landed him a $4 billion paycheck that year.  As you might expect, he became the toast of Wall Street and although he wasn’t mentioned in The Big Short (book or movie), someone else wrote a book about him titled, ‘The Greatest Trade Ever.’

That story matters because his tax bill this year relates back to his big 2008 payday. Through clever accounting and tax maneuvering that was perfectly legal, he was able to defer his tax bill until now.  Not a bad deal, especially if you can earn a decent return on your money.

The trouble for Paulson, however, is that his performance has run cold in recent years and his business is down.  At its peak, he was managing $38 billion, but that’s dropped down to $9 billion in recent years.  It’s said that his personal assets, which are thought to be between $4 and $7 billion make up most of the assets at this point.

I vividly remember meeting with a group of unions in Greenwich, Connecticut in 2009 along with another dozen managers like myself. The stock market had bottomed, but we didn’t know it yet because everything was still so shaky.

The room was full of doom and gloom, and even though I had no idea how things would play out, I didn’t think that we were headed for another Great Depression, and that stocks would recover like they always had.

The union leader asked the room, ‘how long will it take for the stock market to recover?’  I thought it was a rhetorical question, but then he pointed at me, because I was sitting at the end of a U-shaped table and was closest to him.

‘Uh,’ I said, as I tried to think of something reasonable.  I knew that it took until World War II to recover from the Depression, but that’s mostly a feature of a second crash in 1937 – the market had almost entirely recovered but got hit again.

Plus, stocks were down 90 percent in the Depression, and we were ‘only’ down half that much in 2008.  I stuttered, ‘six years,’ and the room erupted with jeers that I could be so naive.  As they went around the table, it seemed like the other advisors were competing to come up with gloomier answers: seven years, no, eight!  Eleven years, maybe 15!

As it happens, it was around four years; although the folks in Europe just got back to break even last year, so the big time guesses weren’t totally unreasonable.

But the reason that I tell this story is that when the union leader asked everyone to tell them how they should invest, I said, humbly, ‘stocks and bonds.’  Again, I was nearly laughed out of the room.

Most folks pitched hedge funds, and one person said, ‘Paulson just lowered his minimum to $100,000.  Although everyone was really excited, I thought that this was bad news – he was going to cash in even more on his recent success.  He knew that people would be scrambling to get into his fund, which is exactly what happened.

Things could have worked out differently, but I’m glad that the plain old stock and bond strategy that we had worked out as well as it did.  I’m glad that we didn’t pile into funds like Paulson’s, who hasn’t come close to matching the stock market.

I guess I’m sad, though, that I’m not writing a billion check to the government (which is something I never thought I would say).