MSNBC's Ratigan: Austerity or No Austerity, US Bank Debt Will Not Get Paid

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Privatization of assets is becoming the go-to solution for city and state officials with budget holes to fill. A deal between the city of Chicago and Middle Eastern financiers backed by Morgan-Stanley has made parking in the Windy City a nightmare, and a similar privatization scheme for the Indiana Toll Road has resulted in burgeoning tolls.

Dylan Ratigan of MSNBC's The Dylan Ratigan Show discusses the causes of this alarming trend and its lack of viability as a solution to city and state debt.”Politicians are totally dependent on the flow of campaign funds from the banks and other associated entities,” says Ratigan. This ensures that they are always willing to do business with the banks, even when only a fool would take the deal: Chicago leased its entire parking meter system for 75 years, an asset valued by Morgan-Stanley at over $5 billion, for just over $1 billion.

One-off sums like the one paid in the Chicago deal are usually only sufficient to keep cities in the black for short periods. Worse, the contractual terms often limit city and state rights to expand or update technology. Ratigan:

In exchange for getting a few billion dollars today to fill a budget hole that was created by political corruption and a disfunctional banking system, the states are the forfeiting the rights to do things like develop high speed rail, develop new roads, the ability to have street fairs, and the ability to have street cleaning when they want it.

These are problems that are already becoming major hindrances to citizens in Chicago and Indiana.

What's the solution? “Cancel the bank debt,” Ratigan says. It takes the power out of the hands of the banks, and no amount of austerity or privatization will allow us to pay it off fair-and-square anyway. Listen to the full conversation for the details.

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