Author(s): John H. Friar — Publication date: 2008-02-28 Category: Economic Opportunity Abstract: Policymakers have long grappled with the challenge of revitalizing cities whose economies have declined as manufacturing jobs moved elsewhere. Older industrial cities’ economic woes have compounded other problems, including municipal budget crises, struggling schools, high crime rates, and persistent poverty.
[wpdm_package id=79]
2008 Better Government Competition Compendium of Winning Entries – Education
Download Report: 2008 Better Government Competition
I attended the Finance Advisory Board meeting last week and one of the new appointees to the Board, Robert McConnaughey, (who replaced the previous incompetent), raised an interesting and insightful point — how will downgrades to bond insurers impact public sector debt?
To unpack his question a bit — much public sector (i.e. municipalities, authorities, states, etc.) debt is enhanced with bond insurance, which provides a higher bond rating and reduces borrowing costs. If these bond insurers themselves get downgraded (largely as a result of exposure to bad subprime debt that they insured), it flows through the market and affects the bonds that they insured.
Mr. McConnaughey’s question is already looking even more timely. S&P just downgraded a major bond insurer from “A” to “CCC”, cut outlooks to negative for two other insurers, and issued negative outlooks for two other insurers. The initial result:
S&P cut ratings on nearly 3,000 municipal bonds, affecting city and county programs around the country.
Keep an eye on this issue. It appears that public sector borrowing is going to get more expensive. Soon.
UPDATE — Enter the Warren!! A sharp-eyed reader points to today’s news that Warren Buffett is bringing the vast balance sheet of Berkshire Hathaway to the bond insurance business. Seeing a vulnerable field of competitors, this probably makes sense but, as the linked article suggests, this is not a charity effort.
“She’s a good girl. She helps me a lot. She has big, big dreams. I don’t have the money, but she has big dreams. I hope she’s going to get everything, but she works so hard. She works so hard in school.”
“Our family is needing to make some really big sacrifices because we believe this is important, and so, we’re basically going to do whatever it takes… Sometimes we look at each other and go ‘I don’t know if I can do it again another month…’”
“A lot of the families have to sacrifice and work multiple jobs… And just scraping together enough money to just make tuition, just the basics.”
“It is discriminatory, that parents who want to choose an alternative to public school for their children, would not in any way receive any compensation for that, whether it be tax credit, whether it be a voucher…”
In the 1840s, nativist movement leaders formed official political parties and local chapters of the national Native American Party (later the American Party), although they continued to be commonly known as the Know-Nothing Party. Politicians sought to insert provisions into state constitutions against Catholics who refused to renounce the pope. The Know-Nothing movement brought bigotry and hatred to a new level of violence and organization.
The party’s legacy endured in the post-Civil War era, with laws and constitutional amendments it supported, still today severely limiting parents’ educational choices. A federal constitutional amendment was proposed by Speaker of the House James Blaine prohibiting money raised by taxation in any State to be under the control of any religious sect; nor shall any money so raised or lands so devoted be divided between religious sects or denominations. These were then named the Blaine Amendments of 1875.
in recent decades, often in response to challenges to school choice programs, the U.S. Supreme Court has demonstrated great interest in examining the issues of educational alternatives and attempts limit parental options. Massachusetts plays a key role in this debate. The Bay State was a key center of the Know-Nothing movement and has the oldest version of Anti-Aid Amendments in the nation, as well as a second such amendment approved in 1917. Two-fifths of Massachusetts residents are Catholic, and its Catholic schools outperform the state’s public schools, which are the best in the nation.
Author(s): John H. Friar — Publication date: 2008-02-28 Category: Economic Opportunity Abstract: Policymakers have long grappled with the challenge of revitalizing cities whose economies have declined as manufacturing jobs moved elsewhere. Older industrial cities’ economic woes have compounded other problems, including municipal budget crises, struggling schools, high crime rates, and persistent poverty.
[wpdm_package id=79]
2008 Better Government Competition Compendium of Winning Entries – Education
Download Report: 2008 Better Government Competition
I attended the Finance Advisory Board meeting last week and one of the new appointees to the Board, Robert McConnaughey, (who replaced the previous incompetent), raised an interesting and insightful point — how will downgrades to bond insurers impact public sector debt?
To unpack his question a bit — much public sector (i.e. municipalities, authorities, states, etc.) debt is enhanced with bond insurance, which provides a higher bond rating and reduces borrowing costs. If these bond insurers themselves get downgraded (largely as a result of exposure to bad subprime debt that they insured), it flows through the market and affects the bonds that they insured.
Mr. McConnaughey’s question is already looking even more timely. S&P just downgraded a major bond insurer from “A” to “CCC”, cut outlooks to negative for two other insurers, and issued negative outlooks for two other insurers. The initial result:
S&P cut ratings on nearly 3,000 municipal bonds, affecting city and county programs around the country.
Keep an eye on this issue. It appears that public sector borrowing is going to get more expensive. Soon.
UPDATE — Enter the Warren!! A sharp-eyed reader points to today’s news that Warren Buffett is bringing the vast balance sheet of Berkshire Hathaway to the bond insurance business. Seeing a vulnerable field of competitors, this probably makes sense but, as the linked article suggests, this is not a charity effort.
New Business Creation and The Urban Economy
/0 Comments/in Economic Opportunity, News /by Editorial StaffAuthor(s): John H. Friar — Publication date: 2008-02-28 Category: Economic Opportunity Abstract: Policymakers have long grappled with the challenge of revitalizing cities whose economies have declined as manufacturing jobs moved elsewhere. Older industrial cities’ economic woes have compounded other problems, including municipal budget crises, struggling schools, high crime rates, and persistent poverty.
[wpdm_package id=79]
2008 Better Government Competition – Education
/0 Comments/in Better Government Competition Winning Entries /by Pioneer Institute2008 Better Government Competition Compendium of Winning Entries – Education
Download Report: 2008 Better Government Competition
The Knock-on Effect of the Subprime Mess
/2 Comments/in Better Government, Blog, Blog: Better Government, Economic Opportunity /byI attended the Finance Advisory Board meeting last week and one of the new appointees to the Board, Robert McConnaughey, (who replaced the previous incompetent), raised an interesting and insightful point — how will downgrades to bond insurers impact public sector debt?
To unpack his question a bit — much public sector (i.e. municipalities, authorities, states, etc.) debt is enhanced with bond insurance, which provides a higher bond rating and reduces borrowing costs. If these bond insurers themselves get downgraded (largely as a result of exposure to bad subprime debt that they insured), it flows through the market and affects the bonds that they insured.
Mr. McConnaughey’s question is already looking even more timely. S&P just downgraded a major bond insurer from “A” to “CCC”, cut outlooks to negative for two other insurers, and issued negative outlooks for two other insurers. The initial result:
Keep an eye on this issue. It appears that public sector borrowing is going to get more expensive. Soon.
UPDATE — Enter the Warren!! A sharp-eyed reader points to today’s news that Warren Buffett is bringing the vast balance sheet of Berkshire Hathaway to the bond insurance business. Seeing a vulnerable field of competitors, this probably makes sense but, as the linked article suggests, this is not a charity effort.