How the Government Loots (and How to Loot Them Back)

This recent post generated a lot of, let's say, discussion 

Mainly that discussion centered around people wanting to know how to actually do this. Including this comment.

This made me think of a point that I was going to elaborate on further, but I decided that the long form of that should go here, rather than dropping an essay on someone's comment. 

"One of the reasons big cities are swimming in debt is that they are a target for "scams" like this. I put quotes around scam because when you are dealing with large enough amounts of money, you usually find some way to justify the looting. This process has been given a name, privatization.

Private prisons, private road tolls, private-public transit. By making them private, it allows the private sector to reap profits while the public sector carries all the risk.

Sometimes it's that grand a scale, sometimes it's as small as invoices for work that never gets done or was never asked for, and this is what I oh so satirically proposed above (please don't sue me)

I live in Chicago. I own a car. I must own a city sticker, which costs $87.82, if I don't have one (I didn't when I moved here) the ticket is $200. If you cannot pay that ticket, it doubles after 25 days. 

Why do I mention this? Because 7.7% of the cities budget comes from this mechanism. 
12.5% comes from Sales tax, which is also a regressive tax, or a tax whose relative tax rate is lower the higher your income is. 

I have used this chart to make a point so many times that it might as well be my desktop wallpaper.

So, with this much revenue, what sort of investments are being made into the communities? After all, in 2020 the city had $9.89 billion dollars to play around with. How did they spend it?

This one is the lock screen on my phone.

They gave it to the police. 

If you look at the very bottom of the image, you will see that City Development makes up for 0.6% of the budget.

Less than 1%

Of a budget of $9.89 billion.

Infrastructure, community service, elections, and development (Things that make life better) total less than 10% of the city's budget. The majority goes to the police, and the rest goes into two categories: Finance and Administration (Basically overhead) and something called General Financing Requirements. 

What the fuck does that mean?
 
Well, according to the budget, it is a broad category that includes information technology systems, employee benefits, contributions to employee pension funds, and long-term debt service payments. And it's that last part that I wanna talk about because debt service just means what is owed on the city's debt. The city pays $1.9 billion each year to service its debts (Page 168 of the overview) 

Why do I mention all of this? Because now we get to the looting. With this much public debt, it's easy to just add to the pile, and people often do. Chicago is the most corrupt city in America, and I imagine that this is a contributing factor to the size of the protests which have taken place here. 

A simple google search will bring up cases with some staggering numbers. Often articles will focus on something like the size of bribes, but its harder to find the amounts of public money that got spent in return for those bribes. Here is one case where $200,000 in bribes resulted in over $5,000,000 in public money going to a private company. The problem is more widespread. This article talks about how public corruption in Illinois costs taxpayer $550 million every year, and that honestly just the stuff we know about.

While corrupt individuals may lose their positions or go to jail, the money that gets wasted stays wasted, it goes into the Debt Services Fund, it accrues interest, and it continues to haunt the taxpayer.

So the public coffers are being raided, and what does that do to us? It slows economic growth. Our communities go uninvested in, which leads to crime, which leads to more of our money going to institutions like the police, which is an entirely different article unto itself.

Finally, I wanna go back to my city sticker and my parking ticket. This is a form of looting. Regressive taxes which pay for debt accrued through fraud is a form of wholesale looting of our communities. There is research to show that, in Chicago, parking violations disproportionately affect lower-income communities and communities of color.

So our tax dollars are coming from poorer communities, and are being spent for the profit and advancement of those in power, and the bill for their corruption is sent to the people. 

This is just one example in one city, but it's prevalent in most major cities. The original comment at the start though sorta sums it up. If you want to scam a city, don't target the cities with budget surpluses, they are likely looking out for the public good, which means being good stewards of the public fund. Look at the big cities where corruption is rampant, and see if you can get them to cover a car payment or two.

After all, it's your money. May as well use it.