5 Facts About the Wealthiest One Percent of Americans

[luckytxn 2,264]

Privately owned and operated state and federal prisons were built using public bonds. While the bond holders maybe investors, the ones footing the cost in the end are the taxpayers, which was the point I was making. Without that public funding, these private prisons would not be able to build, unless they found private investors willing to risk without any government backed guarantee and there aren't any. So the fact is that private enterprise often relies on public funds in the form of bonds in order to build.

http://en.wikipedia....obligation_bond

A general obligation bond of this sort is a public bond. They are usually issued to build public use facilities. Some muni bonds are non taxable. They generally pay a lower interest rate but since the earnings are not taxed they are usually very attractive to investors.

[mawilson 2,133]

Privately owned and operated state and federal prisons were built using public bonds. While the bond holders maybe investors, the ones footing the cost in the end are the taxpayers, which was the point I was making. Without that public funding, these private prisons would not be able to build, unless they found private investors willing to risk without any government backed guarantee and there aren't any. So the fact is that private enterprise often relies on public funds in the form of bonds in order to build.

What public funding? When the government borrows money by issuing bonds, the taxpayers end up paying interest on those bonds - that's what BORROWING means.

When you buy Treasury notes, the taxpayers pay you interest and the bonds are backed by the full faith and credit of the US government. I don't get the outrage. Don't borrow money if you don't want to pay it back.

Also, why wouldn't there be investors willing to invest in a viable business, such as a prison?

Seems you are still confused. Now show a link to where the private prisons issue public bonds. Now if it is a state prison they do issue public bonds and tax payers have to pay for the bonds. Now the private prisons in Texas issue corporate bonds. They are paid back by tax payers in that the private prisons get a certain amount per day for each prisoner in revenue from the state and they use this revenue to pay their corporate bonds. (taxpayers) Now the costs has been shown that the private prisons can do cheaper than what it costs the state to do and even get a profit.

You are correct.

[one...two...tree 2,762]

Now show a link to where the private prisons issue public bonds.

....sigh - from the previous post link:

Pivate prison companies also received millions of dollars in government subsidies. These included various kinds of tax abatements and infrastructure assistance in addition to low-cost financing through several types of bonds .⁵

^{http://www.publicbonds.org/prison_fin/prison_fin.htm}

[I AM NOT THAT GUY 5,715]

Steven doesn't want any public funds to be used to hire private contractors, or to pay private vendors. He wants public funds to go directly to union workers. He wants to cut out the middle men.

[one...two...tree 2,762]

What public funding? When the government borrows money by issuing bonds, the taxpayers end up paying interest on those bonds - that's what BORROWING means.

You are arguing semantics. Those private prisons charge their operational costs to the tax payer. The tax payer, in the form of government backed bonds, secured the deal for investors to front the money. I'm not arguing whether such public/private endeavors have merit, but pointing out that such endeavors would not exist without the tax payer. These private prisons are for profit and provide jobs for the local economies. That is counter to the argument that only the private sector creates jobs as if it does so autonomously. The Libertarian mantra is to say government just needs to step aside, yet the prison industry is a prime example of how private enterprise relies on public funds to exist.

[luckytxn 2,264]

....sigh - from the previous post link:

^{http://www.publicbon.../prison_fin.htm}

I understand what the article said but using IRB's is the same as private bonds. The municipals use their value to issue bonds that the private company pays back. The reason some municipals do this is so they can persuade the private company to build their facilities in their jurisdiction and thus have jobs for residents and suppliers locally get business and thus raise taxes on the influx of wages and services rendered. They are still private bonds in that a private entity is using the bonds and paying the loan off. The municipal is not paying the loan off at all. It is incestuous but in the end the municipal comes out ahead by increasing their tax base.

[luckytxn 2,264]

You are arguing semantics. Those private prisons charge their operational costs to the tax payer. The tax payer, in the form of government backed bonds, secured the deal for investors to front the money. I'm not arguing whether such public/private endeavors have merit, but pointing out that such endeavors would not exist without the tax payer. These private prisons are for profit and provide jobs for the local economies. That is counter to the argument that only the private sector creates jobs as if it does so autonomously. The Libertarian mantra is to say government just needs to step aside, yet the prison industry is a prime example of how private enterprise relies on public funds to exist.

and even

The tax payer can issue the bonds and pay it back to build the facilities but sometimes it is cheaper to just contract out the service. In the state I live in the prisons were full and under court order to reduce the population. Texas had a pay as you go at the time and couldn't issue bonds because they had to pay as you go. In order to not just release violent criminals they contracted out to private corporations to build prisons in Texas and house them. Some municipals wanted these facilities for the tax base so some made deals to issue IRB's to entice them to do so in their cities or towns. It is not the private entities relied on the municipals to do this but the municipals wanted the facilities so enticed the companies in various ways. The companies were also offered tax abatements and other ways. It is a win win for both sides if done right. The private companies receive a certain amount for each prisoner and this is usually cheaper than it would be if the state did it on their own. In Texas it is usually a little more than half what it would cost the state to house the same prisoner.

[mawilson 2,133]

yet the prison industry is a prime example of how private enterprise relies on public funds to exist.

There are not financed by public funds, you @$#%^&*&. They still borrow money from private investors,

even if the loans are backed by the government.

[Misha & Ira 113]

Ah, my bad. Money grows on trees, which happen to be on unclaimed land. Businesses simply drive to the nearest money tree and take their bonds.

Actually, money grows on flax and cotton plants.... US currency at least...

[one...two...tree 2,762]

There are not financed by public funds, you @$#%^&*&. They still borrow money from private investors,

even if the loans are backed by the government.

There you go again with semantics. From the link I posted earlier:

While some private prisons have been financed using IRBs, a relatively larger number have used lease revenue bonds and certificates of participation (COPs). In fact, IRBs were almost completely replaced by lease-backed securities as the preferred mode of financing by private prison companies during the 1990s.

Traditional revenue bonds back repayment of interest and principal with revenue generated by a project, such as tolls, stadiums and parking garages. But projects financed with lease revenue bonds do not generate revenue in the same direct way.

Typically, the government enters into a lease purchase agreement with a non-profit corporation or authority that will build the project. The non-profit corporation or authority, called the lessor, will issue tax-exempt lease revenue bonds. The project or facility that is built or acquired with the bonds is leased to a municipality (in the case of prisons it is often a correctional agency), called the lessee, under a lease agreement. The lease payments by the lessee (i.e., correctional agency) to the lessor (i.e., the non-profit corporation) form the basis of the security of the repayment of the bonds. Funds for the lease payments made by the correctional agency come from state or local government appropriations. When both the interest and the principal on the bonds are fully repaid, the government obtains title to the facility. The terms of the debt are tied to the useful life of the project under this arrangement.

A lessee's source of funds for its lease payments, however, can vary from state to state. For example, in California, the source of funding for the lease payments is any legally available funds appropriated by the Legislature on an annual basis. In other states, the lessee can use its full taxing powers to raise the required revenues to fulfill its lease payment obligations.

http://www.publicbonds.org/prison_fin/prison_fin.htm

[Leatherneck 693]

You know, if a few more people actually spent some time figuring out how to make more money rather than how to limit others, they just might actually realize that making money is not that hard.

Correct! Have never understood the disdane for rich/wealthy people, it is not as if there is one giant 'wealth pie' and there is no pie left for those not in the 1%. Creating wealth is a matter of creating your own pie, an all together different slice of wealth.

A visit to Cuba, North Korea or Zimbawa might give those Alinskyites a dose of reality about poverty in a country void of rich people.

[one...two...tree 2,762]

Correct! Have never understood the disdane for rich/wealthy people, it is not as if there is one giant 'wealth pie' and there is no pie left for those not in the 1%. Creating wealth is a matter of creating your own pie, an all together different slice of wealth.

A visit to Cuba, North Korea or Zimbawa might give those Alinskyites a dose of reality about poverty in a country void of rich people.

If you believe that wealth is created in a vacuum then it's understandable why you think like that. However, wealth is not created in a vacuum - it is dependent upon many participants, from the workers to the consumers. The ever growing disparity between the wealthiest and poorest in this country is symptomatic of policies and economic forces that are destroying the American Dream. Too many American workers are being disenfranchised and that simply can't be remedied by telling them to find a new line of work. That's not only unrealistic, it's insulting to the very machine that produces wealth in this country.

[^_^ 5,021]

If you believe that wealth is created in a vacuum then it's understandable why you think like that. However, wealth is not created in a vacuum - it is dependent upon many participants, from the workers to the consumers. The ever growing disparity between the wealthiest and poorest in this country is symptomatic of policies and economic forces that are destroying the American Dream. Too many American workers are being disenfranchised and that simply can't be remedied by telling them to find a new line of work. That's not only unrealistic, it's insulting to the very machine that produces wealth in this country.

Telling people to find a new line of work is insulting?

If it were up to people like you we'd never have cash registers or computers or even modern factories.

[I AM NOT THAT GUY 5,715]

Telling people to find a new line of work is insulting?

If it were up to people like you we'd never have cash registers or computers or even modern factories.

Or soap.

[one...two...tree 2,762]

Telling people to find a new line of work is insulting?

If it were up to people like you we'd never have cash registers or computers or even modern factories.

Context. The solution cannot solely be that everyone just needs to find a new line of work, especially for those workers whose labor is still needed. For them, it's an insult to their contribution to our economy.