A pension obligation bond by any other name

Financial Adviser:New Jersey wants to loan money to itself, a move that has not been tried by any other state, according to the sponsor of the bill that would authorize the action.A bill is pending in the New Jersey Legislature that would allow the state’s struggling pension fund to buy bonds issued by the state Transportation Trust Fund.Senate President Steve Sweeney, sponsor of the bill that has bipartisan support, says the creative approach is a win-win situation that gets double duty out of the state’s money. Sweeney, a Democrat, is vice president of the Ironworkers International of North America and is the head of two pension funds, which gives him experience in these types of financial issues.

The transportation bond isissued by the same taxpayer that promises to pay for pensions.  So we have the usual Christie pulling a fast one. This is an accounting fraud used to defer pension obligations, and it will backfire.  In fact, it might land a New Jersey governor in jail.