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.’

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