Public Finance, Not Wall Street Profit : To the "Pawn Broker" Go State and Local Governments

June 2011

State and Local Governments are struggling to balance their budgets. These struggles are not new... they are an annual thing now. The struggles have worsened because things are more serious now... as in worse serious. If a State or County or City does balance their budget, the government officials may publicize and celebrate.
But there may be little to celebrate.
You should ask how did they balance? ...
What did they sell?

State and Local Governments have assets...public assets. A public asset is anything that makes money via taxes, fees, and so on,
or has cash/revenue flow,
or has value,
or could make money.
State and Local Governments are selling these public assets.
Government officials sell public assets to balance budgets. It could be a bridge, a current toll road, or a road that could be converted to toll, or an airport, or all the parking meters. It is a long list.

Long ago I utilized the analogy that it's "like going to the pawn broker." When you break down all the funky Wall Street public finance stuff, this is still the best way to describe the condition and actions of U.S. Local Governments and public officials; they are going to the pawn broker with public assets to sell. And it is just the beginning.