It’s something to see Republican Party officials in Pennsylvania turning their backs on free-market capitalism and supporting a government bailout of Harrisburg and its creditors.
The deal relies heavily on state subsidies involving the price of the incinerator, a ginned-up deal for parking spaces, lax environmental enforcement, and other ‘under-the-table’ payments to the capital city.
Today Harrisburg is at least $1.5 billion in debt, thanks to decades of wild spending and irresponsible bond underwriting by a former Democratic mayor.
The Republican controlled Dauphin County commissioners, and the bond insurer, Assured Guaranty Municipal (AGM) became part of the problem when they risked their money to profit from earlier irresponsible Harrisburg bond underwriting. AGM had guaranteed performance by most if not all of the bonds that were sold.
But never mind that.
With a pat on the back from the governor, the Lancaster County Solid Waste Management Authority has talked itself and others in Lancaster County GOP circles into floating more than $130 million in bonds for a notoriously bad Harrisburg incinerator valued under $50 million, and buried in toxic waste.
It’s not so clear why. Some speculate that it has to do with the overweening ambition of its CEO to become the ‘trash czar’ of Central Pennsylvania.
If this same bailout had been put forth by former Democratic Gov. Ed Rendell, these GOP officials would be spitting blood and nails in vehement opposition.
“A loan long continued usually confers ownership,” goes an old Irish proverb.
If it goes through, the GOP will own the Harrisburg bailout, and all the economic and environmental fall out to come.