Bond Trader Wisdom

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Bond Trader Wisdom

On Ray's show this morning one of the guests whose name escapes me said that the 2/3 rds majority will not apply to raising taxes if Maines ability to service it's debt obligations is in peril. He explained that this mechanism is necessary because the bond houses would look unfavorably on the ability of Maine to raise funds should an emergency arise, but quickly added that this almost assuredly irrelevant because the first dollars that come in to the State every fiscal years are always used to service the State's debt.

Well that may be true, or might not be true, but the Bond brokers are assuming that in the future if this tax package passes that the State's debt obligations will be paid with the very last dollars and dimes that are trickling into the State's coffers, and they want to make sure that these instruments are honored.

I agree that this a loophole you can drive the Space Shuttle through.