Bonds

So, our glorious system is set up in such a way that municipalities (counties, cities, townships, towns, hamlets, villages, etc.) don't have the financial wherewithal to be able to function on their own.

Officially, these governments have enough revenue (taxes and fees) to pay all of the dog-catchers, cops, et al, least nominally, but for special projects they have to create bonds.

For the cheap seats, a bond is a financial device that has a nominal value (let's say $100).  We sell them to people, at a discount and guarantee an interest rate over a time period.  When the time period is reached, it is known that the bond has matured. You can then go to the issuing organization and turn the bond in, for which they will pay you the face value plus the interest that is owed.

All well and good, right?  We have to have that new park, repave the sidewalk, plant some trees, build a stadium, provide all of our local workers with pensions and health care in perpetuity. All important instances of building for the collective good, right?

*Side note:  The Crazed American is not against pensions or perpetual health care, the employer (private, governmental) had just be damn sure they can pay for it - especially when times get bad.  If you can't pay for it, don't offer it.  NO MORE UNFUNDED LIABILITIES (evidence?  California, US Gov't)*

Problem is this:  most cities and towns cannot meet their payroll without lines of credit and bonds in perpetuity.

Municipalities are starting to go bankrupt because 1) our money is a sham (different topic) 2) our cities and towns and counties are living FAR beyond their means.

Who to blame?  The politicians?  Nope, they're slime and we all know it.

Us.  We did it.  We think that we're entitled to this fairy tale government that can do everything for us and everything to us.  The entire system is now gamed to vote us all as much from the (empty) treasury as possible.  Are we evil, are we super greedy?

No.

We had the best of intentions, the best ideas.  Then we handed it off to people who we now rail against accusing them of betraying some sacred trust.

Think I'm crazy?  Warren Buffett, the Oracle of Omaha himself, just reduced his exposure in the hopelessly over-leveraged municipal bond market by half.  He pulled $8,000,000,000 (eight billion) out of that mess.  Granted, he's still got another $8,000,000,000 in there, but c'mon.  The writing is on the wall.  He'll be pulling as much as he can out of it as fast as he can without cratering the market entirely.

Think this is just some financial mumbo jumbo?  What happens if it happens to your locality? How are you going to feel when the cops can't patrol, the street lights are out, no one landscapes the medians or parks, the libraries close and the utility services become unreliable?  No doom speaking here, it's happening in California and Michigan.

The federal debt cliff is coming.  The fools in charge and the fools in waiting aren't equipped, or capable of fixing the problems in front of us.  The system is broken, and will be broken until the everyday man and woman stands up and rebuilds their small corner of the country.  Once there are four rebuilt corners, that's a rebuilt room.  Enough rebuilt rooms, and you have a rebuilt house.

Get to know your neighbors, get involved with local organizations and charities.  Put down the goddamned electronic devices for a little while each day and plant a garden and share your bounty with your neighbors, with your fellow Americans. Rebuild community.

One Corner at a Time.

Crazed American, Out.