California town pioneers in fiscal irresponsibility

A loan shark wants to lend your town a hundred million dollars. And since this loan shark is such a swell guy he says, "Look folks, don't you worry about nuthin'. In fact you don't have to pay any interest or principal until the year 2033, almost 20 years from now! Ain't that a really sweet deal?" Of course it's a rotten deal.  We all know that the money comes from a loan shark and there must be few gottcha's buried in the fine print. So, what are the catches? Starting in 2033, the first of the town's twenty annual payments will be $50 million dollars a year. And even if everyone who signed the original note has died, there children and their children children's will still have to pay off the entire marker in full.  Plus, the interest and principal payments on that initial $100 million dollar loan will run almost a billion dollars, nearly ten times the amount of the original loan! No one person or government entity could be that stunning stupid...except we're talking about...(Read Full Post)