Cambridge MA Triple A Bond Rating

Cambridge MA Triple A Bond Rating

The Cambridge City Manager takes full credit for a Triple A Bond rating for the City. (Victoria Cheng, "All's A-OK with finances, as city saves big on bonds," Boston Globe, City Weekly, February 17, 2008) The rating agencies state it is the ability of the taxpayers to pay their taxes that is the biggest factor. Is this Manager the only one who could merit this rating with these taxpayers?
It is possible to employ bond insurers in order to get a Triple A rating. But these insurers squandered their trust by insuring the "shaky" sub prime mortgage debt. (NICOLE GELINAS, "THE BOND MESS: ELIOT'S BAD FIX," New York Post, February 21, 2008)
As a result of the sub-prime mortgage scandal the Rating agencies (Moody's, Fitch, and Standard & Poors) themselves are being questioned by the New York State Attorney General. They gave "high ratings to sub prime debt that later plummeted." (Bloomberg, "RATING AGENCIES NOT OFF HOOK: AG," New York Post, February 8, 2008) Were these ratings more reliable than Cambridge's Triple A Bond Rating?
Of what real value are these ratings? As long as the bond investors believe in the quality of the taxpayer the cost of borrowing will remain low. But it is still borrowing. Future taxpayers will have to repay these loans. Why is the Manager being praised for increasing the debt burden of the city's taxpayers?
Is this one more example of fooling the people and bewildering the herd as Noam Chomsky calls it?

Roy Bercaw - Editor ENOUGH ROOM

CAMBRIDGE
All's A-OK with finances, as city saves big on bonds
By Victoria Cheng,
Boston Globe Correspondent
February 17, 2008

* * *

THE BOND MESS: ELIOT'S BAD FIX
By NICOLE GELINAS
New York Post
February 21, 2008 --
[From article]
THE Port Authority and other public borrowers are paying steeply higher interest on some debt because Wall Street screwed up. And Gov. Spitzer and state regulators can make the mess worse.

* * *

RATING AGENCIES NOT OFF HOOK: AG
Bloomberg
New York Post
February 8, 2008 --
[From article]
New York Attorney General Andrew Cuomo said "supposed reforms" by Standard & Poor's and Moody's Investors Service, which gave high ratings to subprime debt that later plummeted, won't stop his investigation of the companies.