Monday, March 05, 2007

We are going to take out more debt to try and fix the pension system. From Crains
Aides to the governor said Monday he wants to issue $16 billion in so-called Pension Obligation Bonds, a move similar to a $10-billion POB four years ago. The proceeds would go to the state’s employee pension funds to invest in the stock and bond markets.The move effectively is a bet that financing costs, estimated to be about 5.8%, will be less than can be earned by investing in the markets.

Because the long term answer to the pension funding issue is to make it our kids proble. Is this administration ever going to face the issues related to pension debt or will it borrow and recalculate so it can spend the money on 'cool stuff' instead. At what point to we finally say enough to debt in this state. Also what happens if the market does not average 5.8% over several years?

But wait, we are going to sell the lottery to help the pension system as well. There are no risks with that plan.

So let me get this right, more debt that the state in the future will have to deal with, a lottery in private hands that the state will have to let operate for decades to come. That's leadership? Pushing the problems down the road? Heck why not just take out even more debt and just double state spending for a couple of years, the kids will have to pay for it, not us.


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