Thursday, June 17, 2010
America's Municipal Debt Racket - WSJ.com
Government at Work!
There was a time when I thought whistleblowers and groups that tried to inform us about government waste and abuse were somewhat paranoid.
Now, I wish there had been more of them; MANY more of them.
This stuff needs to be brought to the attention of the voting public...
There was a time when I thought whistleblowers and groups that tried to inform us about government waste and abuse were somewhat paranoid.
Now, I wish there had been more of them; MANY more of them.
This stuff needs to be brought to the attention of the voting public...
Steven Malanga reports in the Wall Street Journal:
"Nearly 40 years ago the Garden State borrowed $302 million to begin constructing the Meadowlands. The goal was to pay off the bonds in 25 years. Although the project initially went according to plan, politicians couldn't resist continually refinancing the bonds, siphoning revenues from the complex into the state budget, and using the good credit rating of the New Jersey Sports and Exposition authority to borrow for other, unsuccessful building schemes.
Today, the authority that runs the Meadowlands is in hock for $830 million, which it can't pay back. The state, facing its own cavernous budget deficits, has had to assume interest payments—about $100 million this year on bonds that still stretch for decades.
The authority that runs the new Meadowlands stadium in New Jersey is $830 million in hock.
This tale of woe has become familiar in the world of municipal finance. Governments have loaded up on debt, stretched out repayment times, and used slick maneuvers to avoid constitutional borrowing limits. While the country's economic troubles have helped expose some of these practices, a sharp decline in tax revenues has prompted more abuse as politicians use long-term debt to kick short-term fiscal problems down the road."
