Cities in hock
Municipalities like Portland, who borrow money like it was going out of style and refinance like the rest of us shop for groceries, may find the well going dry.
| Posted at 7:44 AM | Permalink |
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This page contains a single entry from the blog posted on December 3, 2010 7:44 AM.
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Comments (6)
At least Sam Adams, his creepy honor, already is presumably acquainted with bankruptcy attorneys.
He has some real-world experience after all.
Posted by Gen. Ambrose Burnside, Ret. | December 3, 2010 8:17 AM
Sam has already cashed the check and spent it. He/TriMet and all of govt is on a spending spree now 'cause they know the end is nigh on chep rates and easy bond sales.
It's the guys down the road (and the taxpayers) that will have to re-fi this debt that are screwed.
Posted by Steve | December 3, 2010 8:24 AM
The federal government has been a major force encouraging the escalating debt of state and local governments. It's like the big daddy drug pusher, staking them in early phases of projects like light rail which still lose lots of money beyond the Fed's stake.
Cut this flow of funds to DC and back, and keep the funds restricted to local area control. Cut the federal government back to just national security issues, getting it out of things like transportation, health care, and education.
Posted by Bob Clark | December 3, 2010 9:42 AM
Maybe the build-up is to get the politician's wish list of projects (high speed rail, light rail, Pearl District, Rose Quarter, green stuff) built now, then default on the loans, then cut the basic services and drastically raise taxes when there is no option.
By that time, the politicians will be off on consultant jobs making nice comfortable six figure salaries working for another government agency, while us schmoes have to pay up.
Maybe there should be a requirement that would prevent the Fred Hansen syndrome: Run your transit agency in the ground, then move to Australia. If you run the government, you're obligated to stay behind (or spend some quality prison time).
Posted by Erik H. | December 3, 2010 9:58 AM
Anybody know of an ETF or ETF's that short municipal bonds? Thanks.
Posted by Grady Foster | December 3, 2010 10:48 AM
Erik H.,
Like your ideas.
There needs to be accountability requiring responsibility other than just leaving with bonuses and a good bundle to retire and leaving the people with the problems and horrendous debt. Some kind of liability here, if they "mess up", they lose a portion or all of their bundle anyway. In some cases, prison time or solitary confinement for awhile to think about what they have done might be a deterrent. This flying free as a bird spending like mad without accountability is crazy-making. Taking this scene back to my view of basic community behavior, this would not be allowed, to drag the people/community down by "abusive financial behavior." People would see to it that these officials making unwise, unhealthy decisions would be out of their position pretty quickly by impeachment, peer pressure, or next and/or special election - OUT.
All this abuse as I see it is much easier to get away with when the community is so large.
Last July, 31, 2010 I commented on this blog:
. . . Debt swamping on cities may very well be the game of the decade with corporations swirling around to swoop down to take the cities assets as they bankrupt.
Sorry to be so negative about this, but what are we to think when our city is on a drive to put us further in debt.
Posted by clinamen | December 3, 2010 12:24 PM