I am a believer in government. It is important to have safe streets, a justice system and a democratically elected institution to insure the health and welfare of the population. These functions add value to our way of life and create an environment for many citizens to pursue loftier endeavors such as education, commerce and the arts.
My ideals are not everyone's obviously, this is America after all. And in the red states of our country, government is disrespected and even attacked, in spite of its undeniable requirement for civilization. So when I see teabaggers trashing government via government action, it pisses me off.
In today's New York Times, Jefferson County Alabama issued municipal bonds to capture revenue for immediate needs. But, they may not be willing to repay the bondholders.
Issuing bonds is a common occurrence in administrating government at most levels. By issuing these "muni-bonds" bondholders would be repaid with the full faith and credit of Jefferson County. It is understood in the marketplace that muni bonds, being government backed, run little risk of defaulting. As a result, the interest rates charged to municipalities are quite low compared to private sector bonds. This makes borrowing relatively cheap for government allowing it to do its important work.
Of course in Redstateistan, not so fast. Apparently, Alabama would need to raise taxes to service their debt. So which will it be, personal responsibility or raise taxes? I think the bankruptcy attorney for Jefferson County answered that question in the NYT here:
“The issue of full faith and credit,” Mr. Klee said, “is whose full faith and credit?”
That statement seems to suggest paying back their obligations isn't their responsibility. The other municipalities that have filed bankruptcy,
only about 141 since 1980, have made good on their bond obligations.
I realize I have not delved into all the nuances of this case. I recommend everyone read the Times article. But the reality is, Jefferson County Alabama doesn't care of they shit all over a government financing system that has been painstakingly cared for by others before it. And the state of Alabama didn't seem to be terribly concerned about taking ARRA money for Jefferson County to the tune of 594+ million. So they need to be required to honor the full faith and credit of their debt obligations rather than acting like common private sector cheats.