Thursday, March 12, 2009 | The articles on pension bond comparative return on investment versus borrowing cost miss the main point: What was the original reason for issuing the bonds? In the case of Chula Vista, no information was provided; for San Diego, only one person in the article framed the issue clearly:

Steven B. Frates, senior fellow at the Rose Institute of State and Local Government at Claremont McKenna College, had a different analogy. ‘It’s like using a credit card to buy a car,’ he said.

He said issuing bonds is a sign that cities can’t afford the pensions they’ve approved.

‘No matter how you slice it, it’s going into debt,” Frates said. ‘You have to look at the proximate cause of that debt. In San Diego, the proximate cause is the incredibly lavish benefits awarded to the employees and the elected officials too.’

Leave a comment

We expect all commenters to be constructive and civil. We reserve the right to delete comments without explanation. You are welcome to flag comments to us. You are welcome to submit an opinion piece for our editors to review.

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.