A ‘Catch 22’ for states looking for infrastructure finance

Joe Heller would appreciate this situation.

 

Today’s New York Times runs with a story which includes one pundit’s recognition of a classic Catch 22 now facing states looking to find kick start money for  infrastructure work. 

 

In the article  Matt Fabian, director of Municipal Market Advisors  an independent consulting firm, addresses a problem confronting states trying to finance infrastructure projects and publicly wailing about their woes.  That strategy, he suggests, might get you the ear of someone in Washington, but on the other hand it might also scare off potential investors.

 

“We have seen over the last three months that every bridge is about to collapse, every highway is a danger and every hospital is full of anthrax,” Mr. Fabian said. “By putting out a lot of headlines about those issues, local governments are undermining the only base we have left. There is no institutional demand for municipal bonds, so we are relying completely on individuals, and individuals get scared by those headlines.”

 

 

In the meantime, check out the Times’ collection of material on what President Obama might do.

 

 

John Latta