I could not believe anyone, let alone elected politicians, could think this is a viable solution…. and yet, here we are. With thanks to Michael Shedlock.
Excerpt of the press article, emphasis added:
“Under the plan, the state [New York] and municipalities would borrow [from the fund] the money to reduce their pension contributions for the next three years, in exchange for higher payments over the following decade. They would begin repaying what they borrowed, with interest, in 2013. […] Another oddity of the plan is that the pension fund, which assumes its assets will earn 8 percent a year, would accept interest payments from the state that would probably be 4.5 percent to 5.5 percent.”
Just to summarize the boondoggle. New York state will borrow money from the pension fund in order to make payments to the pension fund… no, this is not a typo hence the title of the post…. but wait… pension fund assumptions are based on returns of 8% yearly… now, considering that just in the past ten years pension funds have barely made half of that if at all, one wonders why the next ten years should be any different…
You cannot make this stuff up folks! Gold looking awfully good still.