Thursday, July 14, 2011

Discounting the Singularity

If you want to read the one news article that you didn't see which covers the single most important development that will shape future of the City of Pittsburgh over the next couple of deades??  and as collateral damage a whole lot of other local public finance as well.   Then take a scan at least of this article in Bond Buyer:  GASB Unveils Pitch on Pensions.

Everything else is just kind of fluff in comparison. It is also why I am no longer going to get myself amped up over the rump debate of the parking controversy because it just does not matter.  State takes over pension system or not. Does not matter.  City finds some new revenue from the parking authority or not. Does not matter.  Take the city's current pension liability and instead of using an 8% discount rate, try recalculating using half that...  and then see what it gives you.  If you really push it to 3%, or say something close to what is used in private sector pension accounting and... 


Never has something so esoteric meant so much in the real world. 
Whatever..  just the most important thing that may shape all local public finance for decades.  Will be big news most everywhere, but we are the singularity.   Beyond anything to do with the City proper, there is another big local connection to all of this as well.


Anonymous MH said...

You've never seemed particularly amped up about it before, compared to some. Also, does discount rate mean the same as rate of return? I don't think I've seen it used that way before but I'm not up on finance.

Thursday, July 14, 2011 6:11:00 PM  
Blogger C. Briem said...

does discount rate mean the same as rate of return?

No!! and the confusion over that is actually a big part of the problem in all of this. No time for the longer answer right now.

Thursday, July 14, 2011 7:12:00 PM  
Anonymous MH said...

I think I know the difference, but the article was all about rate of return.

Thursday, July 14, 2011 7:19:00 PM  
Blogger Bram Reichbaum said...

I am not going to slow down to gawk at this train wre-WHOA! I DIDN'T KNOW METAL COULD TWIST LIKE THAT!

Thursday, July 14, 2011 9:16:00 PM  
Blogger Conservative Mountaineer said...

...'new hires' is not the metric anyone uses for measuring job creation or economic impact.

You're right. It's 'jobs created or saved'. /sarcasm

Friday, July 15, 2011 7:05:00 PM  

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