The New York Times summed it up wonderfully yesterday:
Suppose the federal government gave you and your neighbor $500 each to buy a new bike, but what you really wanted was a $250 shopping spree for running gear instead. So you offered to sell your $500 federal check to your neighbor for $250 in cash so everyone's dreams could be realized.
That is essentially what several cities in Los Angeles County planned to do with federal stimulus money, until the local transportation authority, its face slightly reddened, pulled the plug on the plans. A spokeswoman in Washington for the House Committee on Transportation and Infrastructure said Wednesday that the swaps would be illegal.
It is hard not to find some irony here. A Credit Surplus Swap? Nope. Forbidden. Stimulus money is a different kind of money. Spending it is a different kind of spending. We would have thought you'd understand that by now.
Cities' Plans to Swap Cash for Stimulus Are Stopped [The New York Times]