In the spirit of looking forward, rather than in the past, my first post will highlight Mr. Arthur Levitt’s fantastic skewering just now of the centerpiece of the mayor’s plan for recovery from the pension crisis. The city simply must drop this fantasy that borrowing money can solve its financial problems.
Even as to the $1.4 billion deficit city government does not seem yet prepared to face up to fiscal reality. It has been proposed that the city address the deficit through the issuance of pension obligation bonds which would use borrowings from investors to increase pension assets but which would not reduce the city’s underlying obligations to fund the pension liability. In doing so the city would continue to push off the funding of these obligations to future taxpayers while avoiding the difficult fiscal decisions that must first be made.
Obviously, we have much more to come.