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IF YOU BORROWED MONEY LIKE THE STATE – YOU’D BE BANKRUPT...SO WHAT ELSE IS NEW?
This is not an article against borrowing money. Small business loans are the life blood of our economy and are essential for the continued thriving of the largest sector of our economy. Small business owners need the flexibility to be able to borrow in times of need or in times of expansion. Did you know that the state has had an orgy of borrowing money through bonded indebtedness for decades? California voters, indeed, have been asked by the legislature to approve bonds almost every year. Voters have approved bonds for stem cell research, to cover budget deficits, to build highways and to build the bullet train. Take schools, for instance – statewide bond issues are approved to fund expansion and rehab for local schools, colleges and state universities. Voters have, in fact, approved 21 of 24 state school bond issues since 1949. Bond issues for all sorts of projects have given California one of the nation's highest ratios of indebtedness – twice the national average. Debt service – repaying principal and interest on outstanding bonds – will cost the state's general fund $5.25 billion during the current fiscal year. This is money that the state just cannot afford...and yet borrowing continues. When will reality hit? What does it take for the political will to stop borrowing to rise up? If you or I were to ignore our financial situation like the state is doing, where would be? Bankrupt, is the answer. |
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