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Dem Congresswoman’s Chief of Staff Resigns Amid Sexual Harassment Allegations

Brenda Lawrence / Getty Images BY: Jack Heretik /  the Washington Free Beacon. Democratic Rep. Brenda Lawrence's (Mich.) chief of staff has resigned following allegations ...

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Democrat Congressman Accused By 10 Women Of Sexual Harassment Claims He’s The Victim

"(He began) describing different sexual acts that we could do, and I turned him down. And the more I turned ...

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Congresswoman Just Revealed That 2 Current Reps Sexually Harassed Women in Their Office

VICTORIA TAFT |  IJR   Rep. Jackie Speier (D-CA) dropped a Harvey Weinstein-like bomb on Congress on Tuesday. The congresswoman recently started the Twitter hashtag #MeTooCongress to get information ...

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Mitch McConnell Calls for Ethics Investigation of Senator Bob Menendez

By Jim E |  The Political Insider Today is not a good day for Senate Democrats. First, allegations of sexual misconduct were lodged against Minnesota senator ...

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As Sexual Assault Gains Attention, the Left’s Silence on Bob Menendez Is Deafening

Michelle Malkin / @michellemalkin /The Daily Signal  Sen. Bob Menendez, D-N.J., is on trial for 18 counts of bribery. (Photo: Bill Clark/CQ Roll ...

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Alabama GOP stands behind Moore: 'Alabamians will be the ultimate jury'

© Getty Images BY MALLORY SHELBOURNE/The Hill The Alabama Republican Party said Thursday that it is standing with GOP Senate nominee Roy Moore, despite mounting ...

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ROY MOORE: ‘THEY’RE TRYING TO SILENCE CHRISTIAN CONSERVATIVES LIKE ME’

KEELY SHARP/Godfather Politics GOP Senate candidate Roy Moore has been accused of sexual harassment. However, it’s extremely coincidental, and Moore denies ...

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80 MINUTES V. 2 MINUTES OF MEDIA COVERAGE

D JOLLY/ GREATAMERICANPOLITICS.COM I recently mentioned the difference in media coverage concerning mass shootings in Texas over the same weekend. For a ...

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Analysis: Senate Tax Plan Would Create 925,000 New Jobs, Increase GDP By 3.7%

Sen. Orrin Hatch says proposal would give a family of four a tax cut of $1,400 Getty Images BY: Ali Meyer / the Washington Free ...

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Done the right way, tax reform is a game-changer

Thank you for subscribing to my E-Newsletter! I wanted to reach out to you today to share my column in ...

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How Wall Street ‘Innovations’ Cost Taxpayers Millions

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By /THE FISCAL TIMES

Marc Joffe, Director of Policy Research for the California Policy Center, has written for the Mercatus Center at George Mason University, the Reason Foundation and the Haas Institute at UC Berkeley.

 

What do the City of Chicago and Jefferson County, Alabama, have in common with Riverside, California, and a school district north of San Diego? These local governments have lost millions of dollars by using creative municipal finance. And if citizens around the country aren’t vigilant and outspoken, their city, county or school district may become the next victim of an unnecessarily complex bond deal.

Perhaps the worst victim of municipal financial “innovation” was Jefferson County, Alabama, which filed for bankruptcy after its financing arrangements known as interest rate swaps blew up. With an interest rate swap, a borrower can issue variable rate bonds while still paying a fixed rate of interest — a transformation achieved through an arrangement with a bank. After suffering a series of rating downgrades, the City of Chicago paid $270 million to close out swaps and convert its variable rate debt to fixed.

Why bother with such complicated deals in the first place? Bankers who promoted interest rate swaps argued that municipal issuers would have lower interest costs overall by borrowing at variable rates. But fees banks collected for arranging the swaps offset these savings. Also, because bankers are more knowledgeable about swaps than politicians and government finance staffers, the terms and conditions of these deals often protected banks at the expense of borrowers.

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LV Commentator Editor’s Note:

Pennsylvania’s Auditor General, Jack Wagner, on December 17, 2009, sent a letter to every school district in PA, urging them to refrain from using interest-rate swaps and to terminate any swaps agreements they may have.  He followed-up with a letter to the General Assembly, recommending they repeal Act 23 of 2003, which permitted school districts and local governments to enter into interest-rate swaps.  To date, this has not been repealed, at a cost to taxpayers of over two-billion dollars a year.

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