Page "Privatization" Paragraph 11

Some privatization transactions can be interpreted as a form of a secured loan and are criticized as a " particularly noxious form of governmental debt ".

In this interpretation, the upfront payment from the privatization sale corresponds to the principal amount of the loan, while the proceeds from the underlying asset correspond to secured interest payments – the transaction can be considered substantively the same as a secured loan, though it is structured as a sale.

This interpretation is particularly argued to apply to recent municipal transactions in the United States, particularly for fixed term, such as the 2008 sale of the proceeds from Chicago parking meters for 75 years.

It is argued that this is motivated by " politicians ' desires to borrow money surreptitiously ", due to legal restrictions on and political resistance to alternative sources of revenue, viz, raising taxes or issuing debt.