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Wednesday, June 16, 2010

Have You Ever Heard of "Build America Bonds"?

Neither have I. It turns out that somewhere in one of the stimulus programs was an idea to help states and cities get cash to build roads, schools, bridges, and to repair other infrastructure. (We wanted to use TARP funds to accomplish exactly this goal and described why in our book, The Great Recession Conspiracy. And we would not lend the money since the repairs have to be paid for by the government sooner or later).

The idea behind Building America Bonds was that states and cities would sell these bonds and the U.S. government would pay one-third of the interest (1/3). This weak effort is completely effete, but I suppose it is better than nothing. Like starving and then ordering a steak dinner, and getting only a little serving of mashed potatoes, with no gravy.

You will love this. Wall Street banks have already collected over $700 Million selling these bonds. This is a minimum figure since many fees are not reported.

And here is the best part. Citibank is already advising its clients to sell these bonds short since they are a really bad deal. The State of Florida has already bailed out of the program.

If you want to understand just how badly our economic policies are organized, just say the words, "Larry Summers". And then say them over and over again until he disappears.

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