How To Rip Off the Taxpayer
by Rabbi David Eidensohn
One day your honorable local politician, state or city, announces that there is a huge debt to be paid. Either pay it, or lose services, less police, less subways, and less what you want. Where did this debt come from? Who ran it up? This honorable politician has been in office for the years the debts accrued, and didn't tell us to watch out for growing debt. All of a sudden...
Joe Mysak of Bloomberg.com has just tossed us all a hot one, a sizzling lifting of the veil, to let us see state debt in action. Mr. Mysak quotes a letter from a big player in the state bond market to the effect that there are two ways to create a bond issue, the state borrowing money. One, the taxpayer approves it, and two, the taxpayer doesn't approve it, and probably doesn't know about it. Now, which of these two ways do you think the honorable worthies who control our state government are going to choose? Think, think.
Right! They will save you, the voter, the aggravation of thinking, and are happy to leave the thinking to them, until it is time to repay the bond, which is your problem. But it is even worse than that. Here are the three reasons presented by this big player (top bond counsel working on 37 billion dollars worth of bonds in 2005) for the state to ignore the voter and his approval for bonding: 1) to circumvent competitive bidding, prevailing wage..2) to circumvent voter approval and/or debt limitation requirements that would otherwise apply to bonds...3) to circumvent competitive bond sale, maximum interest rate and/or other limitations that would otherwise apply."
Thus, bonds not subject to public approval are issued by the government in order to:
1) to avoid competitive bidding. Can our honorable politicians actually seek to make a bond of millions of dollars without competitive bidding that can possibly make things easier on the taxpayer, and maybe even do the job in a cheaper and more efficient manner? If we avoid competitive bidding, does that mean the politician gives his job to his uncle's bookie?
2) to circumvent prevailing wage. Is this fair? If the government has a standard of pay to support the labor force, do we, the taxpayer, feel right about having a bond that ignores these standards? (What happened to the labor unions when this was going on?)
3) to circumvent public approval. Now, why would our honorable politicians do a thing like that? Don't we taxpayers always respond positively to their wise decisions?
4) Hey, what's this about circumventing debt limits? Do they really declare debt limits, which threaten the state with bankruptcy, and then make huge bond issuances that circumvent debt limits? I can't bring myself to believe such a terrible thing. Mr. Mysak, say it isn't true!
5) to circumvent competitive bond sale. Oh my. A competitive bond sale may produce a better deal for the taxpayer. No wonder the politicians don't tell anyone what they are doing!
Okay, let's accept the facts as they are listed above. Thank you Mr. Mysak. But do you have to conclude your Bloomberg.com article that our government, our honorable leaders, are selling bonds that we have to repay "off the books"?
These bonds, sir, are on the books. They got their in an interesting manner, to be sure. In that you are right. However, we taxpayers are too involved with the latest sports event to worry about such things. People like you write about these things because you are paid to do it. But who in the world would care about these things otherwise?
Play ball! Pay it all!
Joe
Mysak concludes his article with "Public finance is going private. What
are we going to do about it?" Let me guess, Joe. They are going to do
exactly what they have always done, fume at the politicians and vote
them back into office.