Is Wall Street Making a Killing off of Cities' debt?

[Skwmom]

https://nextcity.org/features/view/pension-obligation-bonds-is-wall-street-making-a-killing-on-cities-debt

Make sure you look at the amount of the banks fees highlighted at the bottom.

[Octafish]

1. Banksters shafted Detroit Public Schools, too.

State officials, Wall Street target Detroit schools for bankruptcy restructuring

By Nancy Hanover
World Socialist Web Site, 8 January 2016

The Detroit News revealed this week that Detroit Public Schools (DPS) debt payments will balloon from $6.6 million to $26.8 million a month this year, essentially bankrupting the largest public school district in Michigan. These new payment levels, to begin in February, will cause the district to run out of money by April 2016.

Debt payments will rise from $1,111 per pupil to an absolutely unsustainable $3,094 per pupil. With each student’s state foundation grant set at $7,296, this means over 40 percent of state-allocated money will be diverted to the banks and wealthy bondholders.

CONTINUED...

https://www.wsws.org/en/articles/2016/01/08/det2-j08.html

[HooptieWagon]

2. They're bankrupting whole countries.

Cities are just pocket change to them.

[Yupster]

3. Who would be stupid enough to sell bonds to pay pensions?

You issue bonds to pay for a large obligation like a bridge or a school or a hospital. You borrow the money and then build the bridge and pay it off over 30 years, pretty much like a mortgage.

You can't borrow money to pay ongoing expenses like pension obligations.

That's like borrowing money every month to pay your ongoing living expenses. Everyone knows that ends up in a disaster, although that's how we've ended up with a $ 19 trillion national debt.