Absent from this analysis is even the slightest understanding of the MTA’s operations, basic freshman political science, or any knowledge or analysis of the history of MTA spending patterns.

The only spending pattern the MTA has is that they spend every dollar they can get, plus one more and leverage every dollar they get for debt to expand their income and then leave the state and riders with their financial ruin, plunging the city into crisis after crisis.

There is no evidence that they do anything else or that they will ever do anything else.

“The MTA is going to use the mobility tax to generate $6.8 billion in Bonds.”

Meaning that the FUTURE mobility tax revenues will be spent in the next two years under the current plan. Best case, they would have been spent in the next five. At this point, the MTA would be better off not paying off most of its existing debts and pension liabilities than incurring more.

In the end, what’s good for General Motors may be the only hope for our mass transit too. What were those shares of ownership for GM’s unions, the bondholders and the government? I’ll take it! Are we going to pay more taxes while slashing public services like transit for working and middle class people, and benefits for poor old people, in order to pay tax-free interest to rich old people, and tax-free pensions to early retired ex-public employees?

Want to buy municipal bonds? Read this.

http://www.bloomberg.com/apps/news?pid=20601039&sid=ayC51TwbH6_8&refer=home

California is heading for a default on its bonds, New Jersey for a default on its public employee pensions. Some people will pay taxes for public services for themselves and benefits for the needy. Who is going to see those services and benefits erode and pay taxes for the past? The next Black Swan.