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Big Players Promote Water Privatization

August 2, 2014

By Ellen Dannin : Truthout – excerpt

Americans used to take water for granted, but the water shutoff in Detroit has taught us all-important lessons. We now know that the private sector is willing to be ruthless in denying access to the most basic needs of living beings, and we also know that even those who have the least resources can also have power – if they are organized.

Knowing these facts can prepare us all for the current fight over the privatization of water. Here are the basic facts as to the players and the events that are leading us to this water war.

On May 21, as the Senate prepared to vote on the Water Resources Reform and Development Act of 2014 (WRRDA), Senator Boxer spoke on the critical roles the Water Infrastructure Finance and Innovation Act (WIFIA) section would play. Said Boxer,…

Water is necessary to the lives of all beings on this planet. The water privatization industry knows this and wants to take advantage of our dependence on water and on the economic weakness of our country’s finances.

The Campaign to Amend WIFIA – An Introduction to the Players

A must-read source in the finance sector is The Bond Buyer. It has been published five days a week since 1891 for an audience that includes municipal finance professionals, bond issuers, government officials and investors.

Bonds may seem similar to stocks because they are both reported in a newspaper’s business section and both have something to do with finance. However, they play very different roles. Here is Wikipedia’s description of how they operate:

Bonds and stocks are both securities, but the major difference between the two is that (capital) stockholders have an equity stake in the company (i.e. they are investors), whereas bondholders have a creditor stake in the company (i.e. they are lenders). Being a creditor, bondholders have absolute priority and will be repaid before stockholders (who are owners) in the event of bankruptcy. Another difference is that bonds usually have a defined term, or maturity, after which the bond is redeemed, whereas stocks are typically outstanding indefinitely…

“…experience has shown that the hidden costs of tax breaks can hit local governments hard. For example, the United States Conference of Mayors 2013 report on water reveals what may be an economically perilous trend. Since 2001, the amount of long-term debt being held by local governments has steadily increased. A large part of that debt comes from tax-exempt bond financing for public water infrastructure. Between 2003 and 2012, the $1.65 trillion in tax-exempt bonds that were issued for public purposes has led to debt of $258 billion….” (more)

Leaves your comments on the source and let your Federal Representatives know how your feel about the privatization of public water.

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