All part of the strategy to buy more votes. Almost every city/state/county has spent itself into the hole on all kinds of frippery.

So now, the regime can write one big check and wipe it all out.

If you can re-fi at a better rate, do it now.

It is my understanding that the point of these bonds are that (1) they allow mutual funds and pension funds that do not pay income taxes to buy municipal debt because they can get interest rates that are better and (2) they reduce the amount of tax exempt bond interest out there, which Democrats have disliked for years because the buyers are generally affluent and Republican. BAB bonds take care of this. Cities like them because the audience for these bonds is much larger, so selling them is easier.

Popping the seed corn.

Rather like professional sports teams and arenas.

Having just read Michael Lewis's book "The Big Short" I know just how much all those bonds are worth...
ZERO dollars

There are real downsides to the federal subsidy gravey train Portland and Oregon have been living on for decades. One very serious downside raised by a Portland bureau chief at a meeting I attended recently is federal subsidies usually involve building new infrastructure and require a certain amount of local matching monies. What happens to paraphrase the chief is it makes it easier to build new things than to maintain existing facilities and infrastructure. As a result, Portland city has a growing maintenance back log of some hundreds of millions of dollars, approaching if I recall correctly some half billion dollars. And the new stuff being built with federal subsidies has to also be maintained.

Another bad thing is the federal subsidies cause misallocation of investment dollars. Things like roof top solar systems, sporting a total all in cost of more than 50 cents or KWH or more (against the going wholesale price of 5 cents), would never see the light of day without ludicrous subsidization. These novelty type utopian projects rob monies from things like basic human capital building like education (something realized with Oregon's BETC credits).

Yet another bad thing is local governments become accustomed to these federal dollars, and some day soon, the federal government is likely to have to cut back on its local infrastructure subsidies (our national government faces some $50 trillion dollars in unfunded medicare and social security liabilites plus the cost of the recent healthcare blob).

As for Wall Street, I would be equally mistrusting of government. The Bama administration is making uncertain as to how much and whom is going to get tagged for new taxes. If I am a business person, I am going to charge for the risk of uncertain governance. And we also have to pay for government employees being asleep at the regulatory switch, or watching porn. So, I find Mr. Jack's politics internally inconsistent. Local government, sharing much the same philosphies as the current U.S administration, should be considered bad, Wall Street bad as always; but the current national government good? Buyer beware always is a better philosphy.

(1) they allow mutual funds and pension funds that do not pay income taxes to buy municipal debt

FYI, there are dozens of mutual funds that hold tax free muncipal debt.

A big selling point is that Build America bonds will attract foreign investors such as foreign banks and pension funds -- shades of SEC v Goldman Sachs. I wonder if all the appropriate disclosures are being made?

Or is this more like Freddie and Fannie, where the Federal Government's role will, downstream, lead to an explicit bailout/guarantee? Time will tell.

"What happens to paraphrase the chief is it makes it easier to build new things than to maintain existing facilities and infrastructure."

Eastside streetcar anyone?

Anyone else here have to regularly navigate the construction on MLK/Grand? Or where major cross-streets have to cross them, like Burnside/Couch or Broadway/Weidler? What a mess.

the current national government good?

GONG! Thanks for criticizing me for something I never said. But I do note that what we have now is infinitely better than the drunken chimp and his sadistic keeper that we had in the White House a few years ago.

http://www.smirkingchimp.com/

One of today's threads:
The Lunatics Who Made a Religion Out of Greed and Wrecked the Economy by Matt Taibbi