Robbing Peter to pay … Peter… (the blue yonder of absurdity)

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.

http://globaleconomicanalysis.blogspot.com/2010/06/ny-state-shell-game-municipalities.html

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.

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One Response to “Robbing Peter to pay … Peter… (the blue yonder of absurdity)”

  1. Absurdity, hypocrisy, expediency; a random selection from the daily press… « Guido's temple of the absurd Says:

    […] This is the best explanation ever of why there never has been nor ever will be scarcity of politicians anywhere in the world. Playing politics allows one to take utter and blissful leave of one’s senses. It’s got to be better than drugs as nobody would go into politics otherwise. The only thing I can think of that approaches this insanity is New York city’s pension fund borrowing money from the New York city’s pension fund to…. wait for it… contribute to the New York city pension fund (Robbing Peter to Pay… Peter). […]

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