Moody’s issued a negative outlook on municipal bonds and this is how Barney Frank responds…
“I am troubled by the action of Moody’s Investors Service to issue a
negative outlook across the board on America’s municipalities, which
could raise the interest rates on cities and towns making it more
expensive to borrow funds for infrastructure improvements. Today’s
action could result in an unjustifiable burden on local governments, and
this may have the unintended consequence of undercutting the stimulative
effect of the economic recovery package. Interest rates on full faith
and credit general obligation bonds are already too high and there is
not a demonstrated record of default. The House Financial Services
Committee will be holding a hearing in early May to explore the unfair
treatment of full faith and credit general obligation bonds.”
If my memory serves me correctly, weren’t the rating agencies hammered by Barney Frank and Co. because of the ratings they gave to the mortgage-backed securities?
I guess Moody’s should just ignore the fact that every municipality in America is going to be collecting less tax revenue this year. It is kind of similar to the way the government encouraged lenders to consider unemployment benefits and food stamps as income in determining credit-worthiness for a mortgage.
Last 3 posts by Taylor
- Obama's Second Act - Very Very Scary - July 16th, 2010
- No Politics in the Goldman Sachs Enforcement Action? - April 20th, 2010
- Moral Relativity Reigns...except - April 9th, 2010
Why are the people who produce everything we use every single day always blamed for all our problems? And the people who produce nothing and only exist because of our tax dollars are always shown as the victims? It’s backwards.