Tightened credit locks up city projects everywhere

[dkf]

http://www.dailykos.com/storyonly/2008/10/1/121356/072/716/616621

The New York Times did an article this weekend about how cities all over the country, big cities, small cities, any kind of cities, can't get the credit they are normally able to get to proceed with vital infrastructure projects, which incidentally, provide employment to many, many working class Americans.

In New York, a real estate boom has suddenly gone bust. Washington has shelved a planned bond offering to pay for terminal expansion and parking garages already under construction at Dulles and Reagan National Airports.

Billings, Mont., is struggling to come up with $70 million more for a new emergency room. And Maine has been unable to raise $50 million for highway repairs.

How many construction workers would have a job today if work on that Reagan National Airport parking lot were going forward? 1? 2? 50? 200?

What will the consequences be: fewer services, less employments or compensation, higher taxes:

Municipalities will probably be able to function, but may not expand services, said John V. Miller, chief investment officer at Nuveen Asset Management, a municipal bond investment firm. "For some, the level of service they provide will decline."

Some governments, already straining to balance their budgets, will have to cut payrolls, he said, and others may decide to raise taxes.

[napi21]

1. This AM I heard that Massachesetts has been cut off all credit.

I didn't realize Mass. had a $$ problem.

[dkf]

2. Lehman used to do muni sales to help fund this stuff.

Ever since they went down its been a mess.

[phantom power]

3. Two things...

For one, almost all states are running huge deficits. At the individual, city, state and national level, we are a nation in major debt.

Second, there's the issue of how business gets done these days. Consider two basic schemes: If you want to spend some money, you can (a) save up, then spend it, or (b), borrow it, then pay it off.

Now, for better or worse, almost all businesses run on approach (b) these days. It does not necessarily mean you are having major problems. However, this credit crunch has at least temporarily fucked up approach (b), and since everybody is used to doing things that way, it's putting a monkey wrench in our economy at many levels.

[Cessna Invesco Palin]

6. Actually...

Almost every state and most local gov't entities are prohibited from running defecits.

[phantom power]

8. I can only say that flies in the face of everything I've ever read.

[Cessna Invesco Palin]

10. They can issue bonds, but they can't run a deficit the way the federal gov't can. n/t

[phantom power]

12. Oh, right.

But in the big picture, it's still essentially deficit spending, right?

[ThomWV]

4. Locally construction sites are deserted - and there are a lot of them.

[Eric J in MN]

5. The tightness of credit swings back-and-forth on its own...

...without Congressional intervention.

[TreasonousBastard]

7. I read that, and the Times has been on the case of...

credit drying up all over the place.

The thing is, most people don't see it flying in their faces until they apply for a mortgage or try to buy a car. Or find their credit card interest rate zooming. Even most small businesses can still find credit out there, but at a severe cost and often at lower limits.

But, little by little, those lines are closing down or at least retreating. Even GM and Ford are now looking at their credit getting squashed just as sales are tanking. (Toyota's sales aren't doing too good either, BTW, with an expected 17% drop, but they're partnered with the Japanese government and their banks in ways we call either illegal or socialist)

The Times today talked of Mindik, seller of shirts, who commented on the crash of '29 as good riddance to Wall Street rubbish. A couple of years later, Mindik found himself out of business and his grandchildren now would never repeat that-- they learned very well how the ripples from that crash eventually affected everyone.

[dkf]

9. The American people can't recognize and fix a problem before it happens.

They need to see pain pain pain, then then still won't want to do it. Eventually when it gets excruciating, they act.

[ddeclue]

11. BWAAA HAA!!! GOOOD!!! HALLELUJAH!!!

Here in Orlando in classic example of welfare for billionaires our city council and county commission ignored the will of the people and agreed to fund a 2 BILLION dollar (+ interest) project to replace the 18 year old TD Waterhouse center (I know people who drive older cars), renovate an empty Citrus Bowl for which there is no longer a football team and replace the performing arts center with a much larger one which the tenants can't afford to operate.

The centerpiece is the replacement of the TD Waterhouse Center (I refuse to call it the Amway Arena) for the benefit of Amway Mogul and Republican arch-conservative Michigan (out of state) billionare Rich DeVos.

DeVos doesn't believe in welfare, unless of course it is for him and his Orlando Magic.

If this kills his welfare from the Orlando and Orange County taxpayers and stops this boon-doggle then well something good has come from this after all!

The Wall Street bailout is just a larger scale version of ripping off the taxpayers of these welfare for billionaires projects everywhere by local and state governments.

We all spoke out about how this boondoggle venues project would cripple the city's credit for decades and that there were much more worthy projects in town but we were ignored in favor of the Chamber of Commerce fat cats and the billionaire and the Orlando Slantinel when out of its way to spin the story the Chamber's way for fear of lost ad revenues both in their news and opinion page and totally froze out opposing views.

We must take our country back from these weasels both on Wall Street and Orange Avenue - if this kills off the Orange Avenue weaseling then GOOD!

Disgusted in Orlando,

Doug D.

[Telly Savalas]

13. So what you're saying is that if municipalities across the country

can't fund basic infrastructure projects like roads, sewers, and water projects, it's all worth it because it might throw a monkey wrench in your stupid fucking arena.