Professor Elam

Tuesday Sept 14 2010

THe Governor of PA has promised to ail out its capital city, Harrisburg. 

Please read this article as we are studying bonds in Intermediate II and the state of the economy in Adv Cost. This reflects the mentality of local governments.  Consider this quote

"I see this as Wall Street versus Main Street," said city councilman Brad Koplinski. "The bondholders are not willing to budge and they expect us to completely take care of this on the backs of our city's taxpayers."

This of course reflects the mentality of not just small cities like Harrisburg, but of entire states like CA IL NY, the Federal Govt, or someone will backstop all their bad decisions. This of course is fiscally impossible. I will be showing you graphs of past eras of economic stagnation in class, this is what typifies those eras, an indifference towards financial responsibility. 1976 saw the default of NYC, at the time, then as now, Mayor Abe Beam could not believe President Ford said no to requests for money. Now we have entire states in the same predicament and sporting the same What Me Worry attitude.  See our post a few days back on the Bexar Met fiscal mess, there is much more anger in municipals than the public imagines.