Does anyone care about public debt?
Equifax, Experian and Transunion all do credit reports on individuals not corporations. This is supposed to be such a big deal that we are constantly bombarded on e-mail offering free reports so that we may check them for errors and see if our borrowing future is being unnecessarily curtailed. Say what you will about running up debt. But, if on an individual basis this is so important, then why, on a macro scale, or collectively, through our domestic government(s), shouldn't we worry about it too?
Is your city or your federal government free to borrow without limits, with no worry about the consequences? Do these governments have an Equifax, Experian, or Transunion credit score chasing them? Or is it all just a matter of income statement, balance sheet and bond ratings? Aren't these governments an extension of ourselves? They are the sum of their parts, and we comprise them? So, when I go to a mayoral debate last week and notice that the only one talking about Waukegan's $55 million dollar debt is the challenger, that the incumbents steer clear of this theme, it smells like something fishy. What's there to be hiding from? What's the game? The city next door, North Chicago, runs a balanced budget. In fact, that's part of their mayor's re-election campaign publicity. Who's the smartest city manager amongst this close-knit group? I wonder. Let's plug in some numbers.
If the 90,000 inhabitants of Waukegan amount to 18,000 families, then the $55 million dollar debt works out to $3,056 per family. If you're doing this on a credit card you might be paying 17% interest, which comes out to $519 per year or $43 per month "debt service." Under this scenario, a monthly principal payment of $31 would be typical. So, the total yearly expense for the Waukegan family to pay off the debt the city fathers incurred is $888. In North Chicago, they're paying zero.
Where would you rather be? I suppose it depends upon what you are getting in exchange for the added headache.
At the federal level, the Clintons left us with a budget surplus. Bush II then ran it into the ground making it the largest deficit in U.S. history. Financial analyst Malcolm Berko says that this raid on the treasury was pre-planned to make the top-half of society the winner in a game with changed rules, where the patsy would be the U.S. government, making up the difference of lost money. So, there was coming to pass, if you will, a "redistribution of wealth," which the conservatives never talked about. Rather they would have your attention focused on the new equilibrium coming about now, and call these times a "re-distribution of wealth."
Well, let's face it. A rose is a rose is a rose. It just depends upon who's smelling it. Should we be worried about the debt that we and our grandchildren are having to pay? I asked Congressman Mark Kirk in October; also, which president(s) had the smarter approach, Reagan and Bush II who ran up super deficits, or the Clintons who balanced the budget? His reply: "Would you rather be taking care of yourself or have the government take care of you?"
Now they say Bush II really increased the size of the federal bureaucracy. So, I wonder what Kirk was trying to tell me. Translation anyone?
Mark Drobnick
Lake Forest