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Title: "Back-Door Taxes Hit Americans With Public Financing in the Dark" Post by: WhiskeyGirl on October 26, 2009, 12:14:54 PM A good article - why does it seem that Americans in government positions, making financial decisions are so clueless?
Quote Oct. 26 (Bloomberg) -- Salvatore Calvanese, the treasurer of Springfield, Massachusetts, for four years, had a ready defense for why he risked $14 million of taxpayer money on collateralized-debt obligations laden with subprime mortgages in 2007. He didn’t know what he was buying, he says, and trusted the financial professionals who sold them and told him they were safe. “I thought they were money markets that were just paying more,” Calvanese said in an interview. “Nobody ever used the term ‘CDO,’ and I am not sure I would have known what that was anyway.” 'Freddie and Fannie are sound...you just don't want poor people to have houses...' Quote New Jersey taxpayers are sending almost $1 million a month to a partnership run by Goldman Sachs Group Inc. for protection against rising interest costs on bonds the state redeemed more than a year ago, Bloomberg News reported Friday. Are there government bailouts for states like NJ in the porkulus? Money not being spent on stimulus, used to fill OTHER BUDGET GAPS? Government bailouts for Harvard? Quote Build America Bonds State and local governments that sold $43.8 billion of taxable Build America Bonds this year will pay $385 million a year more in interest than similarly rated corporate borrowers, based on data compiled by Bloomberg. The bonds, for which the federal government subsidizes 35 percent of interest costs, pay an average yield that’s 0.8 percentage points more, relative to benchmark rates, than yields for corporate securities with the same credit ratings, the data show. As a result, it costs New Jersey road authorities, Georgia sewer districts and other agencies more to borrow, even though they, unlike corporations, can raise fees or taxes to make up for deficits. Corporations are at least 90 times more likely to default than local governments, according to Moody’s Investors Service. Discounted to their present value, those additional payments by municipal borrowers add up to $6.1 billion over the life of the debt. ‘It’s Horrendous’ “I think it’s horrendous, but it’s very hard to get anybody to pay much attention to it,” said Stanley Langbein, a law professor at the University of Miami and a former tax counsel at the U.S. Treasury in Washington. Taxpayers pay more? All this Obama borrowing and debt...another bonus paid for by taxpayers? Why isn't the Obama administration worried about all these overpayments? Windfall profits? Generational debt being created? Who's looking out for Americans on Main Street? read the rest here (a good long read) - http://www.bloomberg.com/apps/news?pid=20601109&sid=aBarSkIcch2k (http://www.bloomberg.com/apps/news?pid=20601109&sid=aBarSkIcch2k) |