You mean, could a mayor take surplus tax revenue and lend it out to earn interest (buy bonds)? I suppose that’s possible, assuming the city council approves.
Cities usually have the opposite problem, though. Voters didn’t like to pay taxes, so cities operate with very little surplus cash. They often need to borrow money (issue bonds) to pay for capital projects like new school buildings.
Bonds are loans the government takes out and repays through taxes.
They don’t really repay bonds, they pay the coupon
When the bond comes due, they pay that as well.
They actually normally roll it into a new bond and just renew it, updating the rate and term
Well not exactly. You can pay off the existing bond by issuing a new bond to someone else who is willing to buy it. You don’t get to arbitrarily change the terms of an existing bond. And that is considered repaying the bond, so your phrase “they don’t repay the bond” is sorry to say very wrong.
Yes, the key element is they need the money from someone else - they are not repaying it themselves
Many things here. First they can just pay off the bond. This happens. Second, they can issue a new bond. Third, doing that literally IS paying off the old bond. Fourth you can ditch the bonds and raise taxes. Ok this could go on all day with possibilities. What they do all depends on the situation at the time. What you said that they don’t pay off bonds is wrong on all accounts. Sorry to say you’ve picked up edgy phraseology and are resisting all attempts at explanation, so I’m gonna peace out.
Imagine having such an ego problem that someone agreeing with you cause such a reaction
What?
