Cash-strapped public school districts and other local governments are increasingly making bets on arcane financial derivatives, often in hopes of quickly raising needed funds. But sometimes, as Bloomberg News recounts, those bets go awry. The schools suffer, but the financial firms clean up.
Such transactions are becoming common across the country, according to Bloomberg. “Most of the $400 billion of private agreements sold to municipalities escape taxpayers’ notice and are little understood by the public officials and administrators who approve them.”