BCT Editorial – 11/14/06

This page was last updated on November 14, 2006.

Debt divide; Editorial; Beaver County Times; November 14, 2006.

Below is a detailed critique of the subject editorial.

“The ways governments use borrowed money makes a crucial difference

“Under Gov. Ed Rendell, Pennsylvania is on a course to borrow more money than at any point in at least 45 years.

“As a result, Pennsylvania is approaching a record $10 billion in outstanding debt.

“According to an Associated Press analysis of post-1960 figures provided by the Democratic governor’s budget office, the state expects to issue nearly $4 billion in taxpayer-supported debt by the end of the four fiscal years whose budgets were set by Rendell.”

[RWC] We can’t let the Republican-majority General Assembly off the hook. Without Republican support, Mr. Rendell could not have increased spending, raised taxes, and incurred more debt.

“Typical tax-borrow-and-spend politician, right?”

[RWC] Hmm, liberal newspaper and a Democrat governor. Can you guess the answer?

“Actually, no. There are two types of government borrowing. The one borrows money to make investments in the future. The other mooches money to cover current expenditures.

“Pennsylvania is doing the former, while the federal government is doing the latter.”

[RWC] I really wish liberals would stop referring to government spending as making “investments.” When I get a dividend or interest check from one of these “investments,” I may change my mind.

“In Pennsylvania’s case, the commonwealth is borrowing money to support major economic and environmental initiatives that should pay off in the future.

“The AP reported that in addition to providing financing for businesses, Rendell’s economic initiatives are aimed at cleaning up eyesore properties, funding civic improvement projects and paying for water and sewer system upgrades. The environmental program focused on land cleanups and preservation.”

[RWC] “[P]roviding financing for business?” Here we have it, incurring debt to fund business welfare is a good use of taxpayer dollars.

Other than possibly “preservation” of state parks, there’s absolutely nothing on that list that is remotely a proper use of state taxpayer dollars.

“Other portions of the borrowing went to pay for improvements to state facilities, such as office buildings and state parks.

“The state’s borrowing isn’t the result of profligacy and mismanagement. It’s serving a well-defined purpose. That’s one reason credit-rating agencies like Standard & Poor’s and Fitch Ratings continue to give the state strong credit ratings. Others are the state’s overall solid fiscal management and strong economic performance.”

[RWC] Using this logic, there’s nothing wrong with the federal debt either. After all, U.S. treasury bonds are the most sought in the world.

“Here’s a way to compare the difference between the way the state is using its borrowed money and the federal government is frittering away its money.

“Pennsylvania is like a homeowner who takes out a home equity loan to upgrade the kitchen, add a second full bathroom, re-shingle the roof and pave the driveway. Meanwhile, the federal government is like the homeowner next door who uses his home equity loan to go on an expensive cruise and European vacation, buy a fancy new car and build an in-ground pool.”

[RWC] Oh I get it, it’s like building baseball and football stadiums that voters opposed. Oh wait, the state did that.

“Pennsylvania is using its borrowed money to build up equity. The only ones who will benefit from the federal government’s profligacy are those who have lent it money. Many of them are foreign central banks that will have no qualms about foreclosing on our nation’s mortgaged future.”

[RWC] “[B]uild up equity?” Yeah, right.

“[F]oreign central banks that will have no qualms about foreclosing on our nation’s mortgaged future?” Geez, talk about fear mongering. I won’t hold my breath waiting for an editorial to describe how “foreign central banks” can foreclose on us. Are they going to put a lien on the White House?

Please don’t get the above wrong. I believe all this debt – whether federal or state – is wrong. My goal was to point out the ridiculous extent the Times went to in order to provide cover for fellow liberal Ed Rendell.