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>> "Ramsey says it was a good deal, because his district is getting a brand-new $25 million school. 'You'd take that any day,' he says. 'Why would you leave $25
by csallen 14y ago
>> "Ramsey says it was a good deal, because his district is getting a brand-new $25 million school. 'You'd take that any day,' he says. 'Why would you leave $25 million on the table? You would never leave $25 million on the table.'"
It's maddeningly common for people to neglect that pesky "cost" part of a cost-benefit analysis.
- mathattack 14y agoAnd it's still another $25 million loan, even if on good terms.
- joelhaus 14y agoOn the contrary, the "cost" is quite clear[1][2]. It's the "benefit" part which requires a highly dynamic analysis. Bottom-line: A Loan makes sense for the borrower when the return on loan proceeds exceeds the cost of the loan. Since the reporting completely left this out[3], if anyone is aware of models used to measure return on such public investments, your insight would be extremely beneficial to those of us commenting on this article. [1] CABs are fixed rate. http://www.msrb.org/msrb1/glossary/view_def.asp?param=capitalappreciationbond http://www.msrb.org/msrb1/glossary/view_def.asp?param=capita... [2] See 16731.5 (a)(3). http://www.leginfo.ca.gov/cgi-bin/displaycode?section=gov&group=16001-17000&file=16730-16737 http://www.leginfo.ca.gov/cgi-bin/displaycode?section=gov... [3] The public is genuinely harmed by this type of reporting and it drives me nuts. How can anyone draw a rational conclusion to these difficult policy issues without a best effort cost-benefit analysis of the transaction?