Obama's Infrastructure Bank--a new way to create "rents"
and funnel profits to private businesses who do work on public infrastructure. The devils are in the details....
Susie at Suburban Guerrilla posts an article from Reuter's Muniland blog which looks at the details, and it looks like tolls and other user fees will be a requirement for getting money to undertake infrastructure improvements made through Obama's American Infrastructure Financing Authority. (AIFA? I'll use Infrastructure Bank.)
A photo of a half or three-quarters destroyed covered bridge in Vermont heads the Muniland post. Tolls for a historic covered bridge if Obama's Infrastructure Bank is used? Wow.
A bridge gets repaired with Obama's planned "bank"? Tolls will be required to pay off the loan. Same for a highway.
City park? Entry fee?
Schools get built? Well...kids pay a toll to get in????
The essence of the American Infrastructure Financing Authority is to use the full faith and credit of the U.S. government to loan funds at below-market rates to public-private partnerships — in other words, to privatize the cash flows from public assets. (My emphasis)
One of the Republican ideas Obama prides himself on including? Or one of the Big Money crowd's ideas?
Whoa, this guy never misses a beat in privatizing and shoveling profits to private industry.
Say it ain't so, Barry*!
While at Muniland, read through the newer posts, where Obama's plans seem to be get the money to the private side, keep the cost on the public side. Gee, lemon socialism all over again: Privatize gains, socialize losses.
Why that "loan" may be a "bond," but without the oversight and protections of bonds.
Treasury's overseas tax plan, in which corporations would not be taxed on profits brought back to the US.
The strangest part of the President’s proposal for muniland though was the provision to exempt “private activity” bonds from the alternative minimum tax. From the Bond Buyer:
The legislation also would exempt from the alternative minimum tax all private activity bonds issued in 2011 and 2012 [My emphasis]. The American Recovery and Reinvestment Act enacted in February 2009 exempted tax-exempt bonds issued in 2009 and 2010, but the provision expired on Dec. 31.
Why the President would want to favor “private activity bonds” is unclear. Private activity bonds are a type of municipal bond issued to finance various types of facilities owned or used by private entities [emphasis in original], including airports, docks and certain other transportation-related facilities; water, sewer and certain other local utility facilities; solid and hazardous waste disposal facilities; certain residential rental projects (including multi-family housing revenue bonds).
Overall the President’s proposal seems like a mixed bag of politically untenable proposals. We will be watching for more reaction from various interest groups.
Reading Muniland gives me a sinking feeling in the pit of my stomach. When Obama plays a Democrat on TV, he's working to achieve Corporatist goals of Big Money...and Republicans. (Note that Dodd played the same game, but who noticed all the little in's and out's of economic writing prior the The Big $hit Pile Meltdown?)
As I am so little versed in the area of bonds I would appreciate others with more knowledge taking a look at what Reuter's Muniland blog is reporting. Is it as bad as my sinking stomach says it is?
(Note: I read a diary over at DKos, and it appears there's been a cleansing of members who were accused of "racism" against Barack Obama. The use of "Barry" is considered racist, since it implies treating a grown black man as an immature boy. Use of the color "black" is possibly racist and should be avoided. I can't recall the others, nor the name of the diary. But, crikey!)