Word is Bond - From Courtroom to Wall Street: The Bond Pipeline You Were Never Taught
Taxes vs. Bonds — Clearing the Misconception People think their tax dollars directly pay for roads. Reality: Municipal bonds finance roads, bridges, and sometimes prisons. Tax dollars only service the debt over time (repaying investors). Prisons and courts, operate on the same principle: bond financing, not direct “citizen tax” flow. 1) Core Thesis - Court cases are treated as commercial debt contracts (“assumpsit”). - A stack of bonds is created per case: Bid Bond (SF-24) → Performance Bond (SF-25) → Payment Bond (SF-25A). - These bonds are pooled, turned into securities (like MBS), and sold into the market. - Clearing happens through CUSIP numbers + DTCC (55 Water Street, NYC). - The book insists: “Everybody feeds off the prison system”—banks, brokerages, and private prison companies. 2) Who Does What? - Contractor/Corp → tenders a Bid Bond to court. - Reinsurer → backs it as surety. - Underwriter (investment bank/broker) → packages them into pools. - TBA (Bond Market Assoc.) → bonds are sold here. - Banks/Brokerages → resell as investment products. - Investors → mutual funds, pensions, insurance firms. Forms cited: SF-24, SF-25, SF-25A, SF-28, SF-1416/1418, SF-273–275. 3) How Prisons Prop Up Finance - Every conviction = a contract that spawns bonds. - Bonds = cashflow assets that investors buy. - Private prison REITs (like CoreCivic/CCA, GEO) double-dip: Bonds on the inmate’s case. Bonds/shares on the prison building (real estate trust). 4) Municipal Bonds & Roads (Parallel Context) - Cities issue municipal bonds to build infrastructure. - Two flavors: General-Obligation Bonds (GO) → backed by taxing power. Revenue Bonds → paid back from tolls, lease payments, or project income. - Same Wall Street plumbing (underwriters, broker-dealers, DTCC clearing). - Prisons too have been financed this way: revenue bonds backed by per-diem contracts for inmate housing.