Toro
Diamond Member
Because of their discredited supply side theories.
Risky Pension-Bond Strategy Considered in Kansas - WSJ
Kansas is considering a corner of the municipal-bond market most states have come to avoid because of its risk—a $1.5 billion sale of so-called pension bonds to boost returns at the state retirement system.
The strategy, which Gov. Sam Brownback is proposing in the face of a growing state deficit, would help lower annual state contributions to the Kansas Public Employees Retirement System. Under the plan, the state would issue bonds and then invest the proceeds, making a decadeslong bet that pension-fund returns will exceed current interest rates for taxable municipal bonds. ...
Such debt offerings can be seen as a sign of distress since governments such as California, New Jersey and Illinois are among the largest issuers and hold the lowest credit ratings among states. ...
The bonds “can be used beneficially in some situations, but they are often inappropriately used by the desperate and irresponsible,” said Alicia Munnell, director of the Center for Retirement Research at Boston College. Debt tied to pensions played a role in Detroit’s bankruptcy and that of Stockton, Calif. ...
Over the last year, Moody’s Investors Service and Standard & Poor’s Ratings Services have downgraded Kansas, as sharp tax cuts have dried up revenues. ...
The strategy, which Gov. Sam Brownback is proposing in the face of a growing state deficit, would help lower annual state contributions to the Kansas Public Employees Retirement System. Under the plan, the state would issue bonds and then invest the proceeds, making a decadeslong bet that pension-fund returns will exceed current interest rates for taxable municipal bonds. ...
Such debt offerings can be seen as a sign of distress since governments such as California, New Jersey and Illinois are among the largest issuers and hold the lowest credit ratings among states. ...
The bonds “can be used beneficially in some situations, but they are often inappropriately used by the desperate and irresponsible,” said Alicia Munnell, director of the Center for Retirement Research at Boston College. Debt tied to pensions played a role in Detroit’s bankruptcy and that of Stockton, Calif. ...
Over the last year, Moody’s Investors Service and Standard & Poor’s Ratings Services have downgraded Kansas, as sharp tax cuts have dried up revenues. ...
Risky Pension-Bond Strategy Considered in Kansas - WSJ