Debt and disaster

The legendary football coach turned TV analyst turned digital game icon, John Madden, is the author of one of my favorite quotes:

“Don’t worry about the horse being blind just load the wagon.”

That’s what the 99% do, you know. They load the wagon. The horse is blind. The driver followed a herd of sheep jumping off the cliff over a narrow gap in the Grand Canyon and the darn wagon is stuck straddling both sides. The bottom of the wagon fell out but the loyal 99% keep on loading it. No one has noticed the hole but the 99’ers are starting to wonder if that old wagon is ever going to fill up.

Debt. Each and every man, woman and child, owes around $45,939 for our federal debt. Every man, woman and child in Illinois owes an additional $26,800 for combined total state debt, including pension and retiree health care obligations. According to Internet Research Commander, Lynn Fazekas, the city of DeKalb’s per capita debt (for bond indebtedness only) is $564.31 per person, but an overlapping debt from the other local governmental units adds another $1,428.29 for a total of $1,992.60 per man, woman and child. That figure doesn’t include local pension and retiree health care obligations. Cook County Treasurer, Maria Pappas, filed a June 2011 report that indicated local governments in Cook County collectively owe $108 billion — averaging out to $63,525 for every Chicago household and $32,901 for every suburban household.

To bring it all home, if you live in DeKalb, Illinois, USA, you are closing in on being $100,000 in debt. That’s not counting your personal and/or business debt.

Our forefathers seemed wary of public debt. In his Farewell Address, George Washington urged his countrymen to avoid “the accumulation of debt,” and asked them not to throw “upon posterity the [debt] burden, which we ourselves ought to bear.”

“To preserve [the] independence [of the people,] we must not let our rulers load us with perpetual debt. We must make our election between economy and liberty, or profusion and servitude. If we run into such debts as that we must be taxed in our meat and in our drink, in our necessaries and our comforts, in our labors and our amusements, for our callings and our creeds, as the people of England are, our people, like them, must come to labor sixteen hours in the twenty-four, give the earnings of fifteen of these to the government for their debts and daily expenses, and the sixteenth being insufficient to afford us bread, we must live, as they now do, on oatmeal and potatoes, have no time to think, no means of calling the mismanagers to account, but be glad to obtain subsistence by hiring ourselves to rivet their chains on the necks of our fellow-sufferers.” –Thomas Jefferson to Samuel Kercheval, 1816.

Modern day ‘movers and shakers’ think differently, of course. Locally, Ray Bockman, County Administrator, told me that as low as interest rates were (the Build America bonds were then offering a 35% rebate) the County should borrow every dollar they could, even for operating. He made a similar statement to the finance committee. A board member asked what impact such borrowing might have a few years down the road from then. Bockman replied that he would be retired by then and it wouldn’t matter much to him.

DeKalb city manager, Mark Biernacki, told the city council that his standards would not allow laying off employees without fair separation compensation. On his recommendation the city council borrowed some $1.5 million to layoff or early retire staff to balance the budget.

Gov. Pat Quinn is once again asking the Legislature for permission to borrow more, to “refinance” more state debt but also to allow him to continue spending more than the state takes in.

History will decide if the founding fathers or the modern day geniuses were correct. Call me old fashioned but Washington and Jefferson were not far removed from the circumstances that created the exodus from Europe to America. Washington endured Valley Forge and through that perseverance a new army was born. Jefferson signed the Declaration of Independence. Both seemed to know how difficult, if not impossible, it is to be independent and free with the servitude debt requires.