There’s a motivational quote that says, “If you’re not the lead dog on a sledding team the view never changes!”

Once you get that view your out of your mind let’s take a look at the biggest advantage the lead dog (federal government) has over the other dogs in the taxing team (state, county and local governments).

When it comes to getting money to run the government the feds have the ultimate power:  They can print money after issuing bonds or slipping IOUs into the Social Security Trust Fund.  Need more money after all the taxes are collected—increase the money supply.

State, county and local governments are barred, for good reasons, from having their own currency.  One monetary system just makes things a whole lot easier.

So what’s a government that can’t print money to do when it has a cash flow problem because property owners have a cash flow problem?

It does a few things:
1.    Raise taxes to make up for the short fall
2.    Sells bonds to pay for public projects
3.    Issue tax free municipal bonds to raise funds

All are used and all are popular and hated in their own way.  Either way, more government debt is more and more unpopular in this economy.

So, instead of increasing taxes and selling long term financial instruments why not get “investors” to pay them guaranteed.  Great idea it turns out.  The largest institutional investors and wealthiest people know how and where to get them.

Tax Lien Certificate buyers are the lead dogs.

All the other dogs are either a tax or have to be paid for with higher taxes.  There’s nothing pretty about that view.