Showing posts with label bad debt. Show all posts
Showing posts with label bad debt. Show all posts

Thursday, November 9, 2023

Shaken, Not Stirred

Bond. Trails Bond. Apparently the any-debt-at-any-cost crowd are crying in their martinis. But no worry, if you can afford to live in Dunwoody you can afford a top shelf martini. Or so went the logic.

Problem is, that kind of logic did not resonate with the crowd who, almost 15 years ago, voted to create a city they thought would be characterized by fiscal responsibility, limited government and local control. As it turns out, the city charter minimizes voter input and local control except in those instances where a referendum is required for city bureaucrats to "grow the city." Such was the case with the rather deceptively named "parks bond" referendum. 

The postmortems have already begun and the do-over committees are probably forming so, well, let's pile on. 

Start with the name. It is deceptive on many levels. First it was to cover parks, which almost everyone favored and highway lanes (even more deceptively) branded as "trails." Worse yet, there was not a list of specific projects with pricing, just a bucket of items like a list a four year old child hands to Santa but no where near as specific as "I want an official Red Ryder, carbine action, two-hundred shot range model air rifle!" More like "I'll have the whole bag and I'll take what I want when the mood strikes me." There is enough confidence in what goes on at city hall and how they operate to make some folks wonder if what would come out of the bag would be PATH's choices over the community choices. 

And city hall knew that PATH's choices were not popular amongst the populace which is why they bundled it with parks and refused to allow an up-down vote on each independently. Separation would also have required they expose exactly how much they intended to allocate to parks and how much they would direct to PATH. So they chose to piggyback something bad on something good as if they were the US congress or something. Works when voters aren't directly involved. Not so much this time. 

There was mischaracterization on both sides. The debt-averse crowd characterized the bond as a "blank check" which the mayor curtly dismissed by remarking, correctly, that it is not a blank check. Left unsaid was that it is better characterized as a slush fund (see previous observation that no concrete prioritized list was provided). The pro-debt crowd characterized the debt-averse as being "anti parks" without recognizing that the referendum included "trails" without constraint on parks vs "trail" priority or expenditures with no protection against PATH running away with all the money. 

Then it got personal with the debt-lovers characterizing the debt-haters as olde fartes who were frozen in the 1970s and against any change. This kind of attack is not noteworthy other than it invoked the Dunwoody version of Godwin's law. This degenerated to invitations to move if you don't like debt-funded changes or a Dunwoody that is nothing more than a cookie-cutter copy of neighboring cities. A bit like watching the folks with all the shiny objects trying to convince the millionaire next door to keep up with the Jones'. Entertaining to watch for the first couple of rounds but quickly turns painful. 

One can never have a contentious political debate without yard signs and one cannot have yard signs without someone removing the opponents' signs. When some debt-averse signagers pointed out that their signs went missing the retort from across the chasm was "the city did this." Not clear if that is true but everyone should certainly hope that it isn't. A city that shows disdain for their own responsibility to police signs in the Village should probably not be pulling down political signs advocating against the city's wishes. Not a good look. 

The pro-debt crowd used a common tactic to dismiss the 53% tax increase that the bond payoff represents by claiming you have to compare that increase to your total property tax bill. Actually, no you don't. You see, the only taxes that the city can directly affect is, well, the city tax. Kinda obvious if you think about it. So when they propose to add more than 50% to their bill they are just looking for a way around the charter restriction on millage rate, which turns out to have been a very good idea to prevent runaway spending. It got funny when the pro-debtors started insulting the other side because some of them weren't aware of what services were provided by the city vs the county when they argued for better priorities. See, you can compare taxes to school and county taxes but you must be oh so clear about the services. 

One thing neither side mentioned was that the bond tax is regressive. Apartment owners do not get a property assessment freeze (homeowners do) and they do not get a homestead exemption (homeowners do) so they are going to pass the increased cost directly to renters, driving up rents. And this is when the city is promoting more and more apartments as "affordable housing" while at the same time proposing a tax that will make rents less affordable. It is really amusing when blue fiscal policy runs counter to the blue agenda. 

Monday, November 6, 2023

Infrastructure?

Dunwoody debt advocates have promoted their passionate desire by suggesting they want to "invest" in "infrastructure" as odd as that may sound. And what will become of this investment, this infrastructure? Well, let's look at some of the previous infrastructure investments, namely Dunwoody Village Parkway. 

If you've been paying attention you'll have noticed that the eco-warriors at city hall were all eliminated having only just foisted those garish LED streetlights on us. For the Parkway? Well they get the warm glow of old school technology. When it works. If you happen to stroll the parkway after dark you'll notice that between one in five to one in four work only intermittently. At best. At least one has sustained obvious, visible damage and never works. 

This is how Dunwoody maintains their "infrastructure investments." Apparently there is no grant money available for upkeep.

Monday, October 16, 2023

They Were Lied To

Who? All those "students" who took out loans for what turned out to be mostly a four to six year party and a worthless credential. 

The first lie has been a long term, systemic practice of grade inflation casually laughed off as the Lake Wobegone effect. It is particularly frightening that this is most prevalent in math. Parents should know more and demand better.

The lie affecting society as a whole is the myth that a college education is necessary and implicitly sufficient for someone to make a whole lot more money than they would otherwise. And yet what we have now are stories of folks carrying $44K (or more) who struggle to pay $138/month to nibble away at the debt. Why? Because this borrower had a job making $28/hour ($56K/yr), got laid off and found a new job making $18.50/hour ($37K/yr). Not exactly the pot of gold they were told was at the end of the college debt rainbow. 

And these two lies are not disjoint. Throughout high school students are being told they are much better educated than they are, particularly in math. This innumeracy manifests itself in students, told they are college material, who cannot fire up a spreadsheet or an online calculator and find out whether that mountain of debt can be bought off by the mirage of a pot of gold. Forget the spreadsheet, back-of-the-envelope ciphering shows that it would take almost 27 years to retire that debt at zero percent (0%) interest. At a measly 3% interest rate this payment would take almost 53 years to retire the debt at a total cost (principal and interest) of almost $88K. This debtor would be on track to pay as much in interest as they borrowed in the first place. Should they live so long. 

Yes, they were lied to. Yet, they, college material, made a choice and now they want that choice, a bad one, to have no consequences, at least for themselves. If they are to get debt amnesty a couple of things must happen first: they must explain to those who've paid their loan or never had one exactly why these debtors get off the hook; and the CFPB must realign towards preventing bad loans rather than facilitating them.