WAMC New England News
(2009-07-02)
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MASSACHUSETTS
(WAMC) -
Investors who are weary of the stock market are starting to put their money into state bonds. The Massachusetts Treasury department saw a seven fold increase in the amount of private investment in their bond market. WAMC's Berkshire Bureau Chief Charlie Deitz has the report.
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Massachusetts Treasurer Tim Cahill says the bonds have a win-win effect. Investors can make long term profits while the government doesn't have to dip into the operational budget for infrastructure projects.
Cahill says the state has a double A bond rating, one of the highest marks available. The Massachusetts Budget and Policy Center's Executive Director Noah Berger says state governments are unlikely to go bankrupt.
Cahill says more than half of the 2.3 billion dollars in bonds sold last fiscal year were bought by private investors. Professor Ben Kahn teaches economics and business administration at Massachusetts College of Liberal Arts. He says the institutional investors are the ones that put the whole system at risk.
Noah Berger says the state should invest any surpluses from good times into the infrastructure, but that's not an option right now.
Cahill plans to make the next offering friendly to the individual investor. The state Treasurer says investors saw about 4 percent profits on last year's purchases, and this year, buyers can come in with as little as 5 thousand dollars.
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