Sunday, September 18, 2011

Stupid, Irresponsible Government Story of the Afternoon

From Bloomberg:
Jefferson County, Alabama, which approved a deal with holders of $3.14 billion of its sewer debt, now needs action by state lawmakers to end a more than three- year saga that kept it on the brink of filing the biggest municipal bankruptcy in U.S. history.

The County Commission voted 4-1 yesterday to accept the terms of the agreement, which includes $1.1 billion in concessions from creditors. JPMorgan Chase & Co. (JPM), which arranged most of the debt, would take the biggest loss. The terms also call for three annual sewer-rate increases of as much as 8.2 percent, followed by annual boosts of no more than 3.25 percent

“It’s time for resolution of this lingering debacle,” said Commissioner Joe Knight, who voted for the settlement. “There is enough blame to go around.”
Well, that's for sure. Let's distill this down to the facts, m'am:
  • The County Commission agreed to pay somebody $3.14 billion - with a "b" - for a sewer system for a single county in Alabama. That's a lot of sewer! Well, turns out, there's a whole of, ah, waste down there.
  • Now that the contractors' kickbacks have all been spent, the Commission decides to stiff the banks that lent them the money to do it with.
  • Oh, and citizens of Jefferson County, Alabama will have their taxes raised anyway.


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