Cities Offer To Sell Stimulus Funds They Can't Use

Amazing. Cities in California that don’t have “shovel ready” projects are trying their alloted stimulus cash to other cities at a big discount. For example, the city of La Habra Heights was allocated $500,000, but they offered it to Westlake Village for $310,000 in cold hard cash.

This is a natural response the government’s desire to spend money urgently — screw long-term planning — and the threat to take back funds from cities that don’t spend the money fast enough.

Alas, the swaps have been canceled by the Los Angeles Metropolitan Transit Authority, though we’re really not sure what the problem is. It seems like a win-win to us. La Habra Heights gets to pad its coffers a little, and Westlake Village gets some free money, or money at a 40% discount. Plus, the cash gets allocate optimally, to a city that can actually use it to, you know, dig stuff with shovels and employ people.

The only loser is the taxpayer, but then if we’re going to start worrying about the taxpayer getting screwed, why start now?

(via Marginal Revolution and Mother Jones)

NOW WATCH: Money & Markets videos

Want to read a more in-depth view on the trends influencing Australian business and the global economy? BI / Research is designed to help executives and industry leaders understand the major challenges and opportunities for industry, technology, strategy and the economy in the future. Sign up for free at research.businessinsider.com.au.