Sunday, February 6, 2011

Stadium Debt

This is only required in the sense that you should read the article and understand the general argument.

The February 3rd issue of The Wall Street Journal  contains a piece entitled "The Price of Football that Even Nonfans Pay". It's about funding, or lack thereof, for sports stadiums.
The dirty little secret of professional sports is that many cities are still paying for stadiums that have been torn down and replaced with new stadiums (that they're also paying for).

How does this happen? Here's an example from New York:
... The old Giants Stadium cost $78 million, yet the outstanding debt more than 30 years later is $110 million. How did this happen? Simple: The politicians spent the money that was originally intended to pay off the debt on other things. It's a common problem. Revenues get diverted to other programs and the stadium debt gets refinanced.

"If I buy a house with a 30-year-mortgage and 20 years later I refinance it so that I can buy a yacht, is that house debt or yacht debt?" asks Mr. deMause. "Cities are using these revenue streams to pay for all sorts of stuff, and playing bookkeeping games."
This sort of nonsense goes on at all levels of government, and then people have the b***s to say things like "the country is broke". It isn't. It's not close. It is overcommitted to nonsense that can be changed anytime we like.

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