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NewsOpinionReaders Respond

County unwise to gamble on borrowed money

Pension and WelfareInterior Policy

Here's the question about Baltimore County's pension borrowing plan ("Balto. County to borrow money for pension system," Oct. 16) that almost no one asks: If this is such a good idea, then instead of borrowing $255 million, why don't they borrow $500 million, $1 billion or even $2 billion and put the money "in the market?" You don't even need a pension fund to do it, just borrow the money and invest. What could go wrong? Stocks always go up like home values, don't they?

People, including those that should know better, develop a mind-numbing myopia when it comes to pensions, the associated trust funds and foolish (GASB & FASB) accounting rules and therefore develop all sorts of mental accounting buckets to help it all seem make sense, when, in fact, it often doesn't. Of course, if you are on the sell side of this deal, you don't get any fees or commissions unless the county proceeds with the bond issue. Conflict of interest, perhaps?

Note: I am pension actuary, but am speaking for myself and not my employer.

Andrew C. Martin, Leola, Pa.

Copyright © 2014, The Baltimore Sun
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