Posted on 08/04/2018 10:01:48 AM PDT by Libloather
The city of Chicago proceeded to spend that money in (if memory serves) about six months.
In the years since, Chicago has attempted to do various "tweaks" to the (already completed) deal; as you might guess, these "tweaks" are not helpful to the people who loaned Chicago the $1.16B back in 2008. In order to increase the incentives to "settle," the city had done things like close large stretches of street parking zones for "maintenance," thereby halting the flow of revenue from the meters in those zones.
Yeo I remember the parking meter deal. It’s hard to believe they spent an advance on 75 years of revenue in just a few months.
I think Chicago and other cities will eventually seek a federal bailout. This pension idea , if implemented, is only a stopgap, just as the parking meter this g was just a stopgap. They still.need to make fundamental financial decisions. And those decisions will be painful.
I’m.happy the good Democrats such as Emmanuel have this headache. They can’t blame Republicans or Trump for this one.
In substance this bond deal would be nothing more than shifting the increasing risk of insolvency from public employees to bond holders.
I would imagine one fringe benefit of this deal for Chicago was that they could dump the city employees who maintained the meters, although one would have expected their union to make a fuss about it.
Then again, it's Chicago, so maybe a few union officials got nice Christmas presents, and the problem was made to go away.
As long as there's an endless supply of suckers to buy the bonds, everything is hunky-dory. I don't see any changes in that dynamic.
"Trump To Chicago: Drop Dead."
One sequel I'll enjoy.
You dodged the question, Its OK, you haven’t really considered it.
The answer is - there’s enough now.
“Informed citizenry holding politicians accountable.” Good luck with that, when “politicians” control money creation, the government, and everything in between.
What idiot would loan it to ‘em? They’d NEVER pay it back.
Who would loan money for that?
“The idea is to issue bonds at relatively low interest rates and use the money to reduce the city’s $28 billion in pension debt. The pension funds would invest the bond proceeds and ideally earn returns that outpace the interest the city would have to pay on the bond debt.”
So, people are going to buy these low-interest bonds from a basically insolvent local government instead of investing in something that will earn greater returns.
Egads, how much of a tax break on these bonds do you get to make them even a little attractive?
What could possibly go wrong?
Who in their right mind would buy such bonds?
The answer is - there’s enough now.
...
As I said, there’s enough now provided that its use is temporary and the politicians agree to be honest while it’s in use.
But it won’t do any good if the politicians are still crooked. I gave you an example of a well known failure (Bretton Woods) and you ignored it.
SOP for Chicago
Richard J. Daley (1955-76)
45.Richard M. Daley 1989 til Emanuel
Totally corrupt Chicago Machine family.
Puttin the Chicago taxpayer on the hook for even more billions making them slaves to the city. Next thing you know they’ll make it illegal to move out.
EXACTLY!! If we want to get money out of politics, we need to get politics out of the money.
Your argument is a circular one: you can’t use gold, because politicians are crooked
Are they more, or less crooked with completely printed money?
So for you, the ideal monetary system depends on having honest politicians.
Again, good luck with that.
.
How can borrowing reduce debt???
.
.
They used to call it “debt consolidation.”
The clown that consolidated the debts gor a nice fee, and your debt level increased.
Next?
“””How can borrowing reduce debt???”””
Because the smart politicians who created this huge pension debt think they can borrow money at 5% and then invest the money in stocks and other investments and make 10%.
That is why they are smart politicians because a whole lot of Chicago people will believe they can do it. Plus these smart politicians do not care if they eventually go bankrupt and screw the bond holders.
<><>(1) using long-term financing to cover day-to-day expenses,
<><>(2) using bond proceeds to pay pension obligations, and,
<><> (3) misappropriating returns from the interest rate swap portfolio (a sub rosa ATM for paying the citys day to day expenses).
The stench from Chicago's poplitical sleaze is permeating the putrid city hall air... starting w/ Obama's ex-COS Chi/Mayor Rahm Emanuel. ....and remember, these kingpins of Chicago criminal politics moved into DC with Chicago kingpin Barack Obama.
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ANALYSIS Bonding is eternal taxation----the insider deals bonding companies made w/ shady pols to get bonding business would tell a tale of greedy pols accumulating riches through massive govt corruption.If these bonding deals were effectuated by way of referendum at the ballot box----and misled investors into buying tax-fee muni bonds----the SEC would be interested.
EMAIL enforcement@sec.gov
Massive govt corruption might include forgery, falsification of official records, fraudulent state budget entries, tax evasion, illegal wire-transfers, misuse of public office.
Tax-exempt municipal bond investors (including public education bond investors)-- have legal grounds to sue if they were deceived about deceptive bond offerings. In many cases, bond issues are approved by voters---at the ballot box--so that voters may have also been misled WRT uses of fraudulent bond offerings.
Also culpable are:
<><> bonding companies underwriting possible fraudulent bond issues;
<><> banks holding possibly fraudulent bond proceeds;
<><> State/city's modus operandi in allocating tax-exempt bond proceeds,
<><> the sub rosa acceptance of bond proceeds.
<><> state/city vendors accepting possible fraudulent bond proceeds.
<><> publicly-funded state/city agencies advocating the uses of fraudulent bond proceeds.
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The SEC, FBI, banking overight agencies, and the IRS, would be interested in the activities of state/city entities WRT bonding.
EMAIL---FBI TIPS PAGE https://tips.fbi.gov
EMAIL--enforcement@SEC.gov
Contact the IRS Fraud Unit
EMAIL Banking oversight agencies
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Taxpayers should find out which Chicago banks are facilitating this.
<><> Which banks are designated the official repositories of municipal tax dollars.
<><> Which banks are dispensing the ill-gotten proceeds....and to whom.
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