This story here, as much as any I have ever read, perfectly exemplifies the complete parasitic, ponzi and entirely unsustainably criminal carcass of an economy that remains in the United States today. This is devastatingly frightening reading. The state of California is completely finished. From NPR:
Collectively, the districts have borrowed billions in loans that defer payments for years — leaving many districts owing far more than they borrowed.
“We’d be foolish not to take advantage of getting $25 million” when the district had to spend just $2.5 million to get it, Ramsey says. “The only way we could do it was with a [capital appreciation bond].”
Those bonds, known as CABs, are unlike typical bonds, where a school district is required to make immediate and regular payments. Instead, CABs allow districts to defer payments well into the future — by which time lots of interest has accrued.
In the West Contra Costa Schools’ case, that $2.5 million bond will cost the district a whopping $34 million to repay.
Perhaps the best example of the CAB issue is suburban San Diego’s Poway Unified School District, which borrowed a little more than $100 million. But “debt service will be almost $1 billion,” Lockyer says. “So, over nine times amount of the borrowing. There are worse ones, but that’s pretty bad.”
In some cases, districts are on the hook to pay back anywhere between 10 and even 20 times the amount they borrowed.
Merry Christmas from the Banksters. Thanks for the bailout!
Full article here.