bond question?

Can a municipality issue tax-exempt bonds and use the proceeds to invest in treasuries thus capturing the premium that investors normally pay for municipal bonds over treasuries? Seems like it’d be like printing money.

Google “orange county” and check out what happened.

You can issue tax-exempt bonds and invest in Treasuries, but any interest beyod what you get on the muni debt goes back to the US Treasury. Of course, that creates an opportunity for people to do illegal stuff and go to jail…

Like some of those JPM Bankers?