Official America says that we don’t save enough money. Then when we do, in the form of 401-Ks, the Yankee government threatens year in and year out to raid our piggy banks, because the poor dears can’t wait until we’re retired to collect the yearly income taxes on the 401-K payouts. They need to spend money now because another election is just around the corner. Raiding 401-Ks has been talked about in one form or another since the Clinton years. And the louder the politicians talk about doing so, the less likely it is that people will start 401-Ks. It’s why I never started one, because I fully expect either a Federal raid or to die if not both before I could collect from one.
Official America says that the finances of major cities are in bad shape. Then they start talking about pulling the rug out from under tax free muni bonds. Only one thing could happen in earnest — It makes it more expensive for urban governments to borrow money. Which is fine by me — All that will do is expose their houses of cards sooner than otherwise would happen. Feet don’t fail them now to bankruptcy court, one city after another after another. Why are the borrowing needs of a big city government more important than a corporation such that the former’s bonds’ interest are tax free for the recipients but the latter’s not? (The money market is already spooked as it is re corporate bonds because you’ll never know when you’ll buy debt equity into some politically favored TBTF corporation, and then if the corporation has to go into reorganization bankruptcy, and that threatens some goodie of some politically connected interest group, Congress will intervene and shove them into a special bankruptcy path and the bondholders will have to take a cold bath.) Maybe it’s because of the social/partisan politics: Cities = poor downtrodden non-whites = Democrats, while corporations = big evil heartless scrooges = Republicans, (though depending on the election cycle, corporate money tends to swag with the perceived winner or front-runner). The last thing our Federal government needs is for any outlet in the money market for higher interest rates, because everyone and their brother, sister and cousin will park money there, thereby making it more expensive for the Federal government to borrow money.