ShmoopTube

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Principles of finance a la shmoop why do muni bonds exist anyway well

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their purpose in life is to build and maintain the infrastructure of cities [Construction workers building]

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parking lots, sewage systems, dams they all have to be maintained or people die

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yeah dam is right so by giving cheap money in the form of the federal

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government "waiving taxes" that would otherwise be do the national [Uncle Sam holding football outside government building]

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government is giving over management control to the local government remember

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the bureaucrats in Washington have no idea whether the parking structure

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should be four storeys or three but the local merchants do in making muni bonds

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an attractive investment the government gets investors who are local who have a [Investors discussing matters]

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stake in the game and who have a vested interest in the investment working over

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long periods of time so if there are exogenous crazy events like an [House with part of the wall missing]

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earthquake or a stampede or an outbreak of plague or free-love then the local

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power players quickly figure out how to fix it if everything had to be routed [People in a meeting discuss how to fix issues]

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through Washington... Well, scant few things would ever get done quickly so treat

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your bonds like your USDA organic 100% biodynamic avocado toast and free-range

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eggs and you know keep them local

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