The law adopted last month gives municipal bondholders a lien on taxes and general revenues collected by the cities and towns whose bonds they buy.I've got a better idea. Let's pass a law giving first priority to all bloggers whose screen names begin with "B." It would make about as much sense as prioritizing precisely those people most likely to have the motive, the opportunity and the wherewithal to estimate this risk and (this is important) to price it into their original loan? Assuming (as I should think we are permitted to assume) that they have already charged for this bankruptcy haircut, if we now let them stick it to the general fund, aren't we just paying them twice?
This means the bondholders would be repaid before other creditors such as workers, suppliers and pension fund beneficiaries if the municipalities went bankrupt.
I suppose I could be wrong if we find a document in the file that says "and besides, boss, if there ever arises a real risk of default, we just get our