We should beware of building more debt

Published 7:00 am Wednesday, July 9, 2014

My objective in writing this column is to point out that our county leaders should cautiously consider America’s depressed economy before increasing debt of any amount for the county.

Since 2008, the Federal Government has done everything possible to jumpstart the economy to its pre-2008 performance levels, and it hasn’t been successful.

America’s weak economy and unprecedented level of debt render her vulnerable to future events that are sure to come.

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Case in point, who would have thought that presidents and 535 members of congress from both major political parties, since the 1960’s, would have consciously “painted America into a corner” with uncontrolled deficit spending and borrowing.

Every federal dollar coming to the county consists of 40 – 50 cents on the dollar-borrowed  from domestic and foreign investors.

The results of those actions have left America with a national debt of $17 trillion as of today. I can’t believe those men and women would have intentionally done that.

But, I do believe they fell victim to the Inertia Of Normalcy (Normalcy Bias).

This is the mindset that America is strong enough to withstand any problem, financially or militarily, because we have always prevailed in the past.

James Rickards, author of the book, “Currency Wars, The Making Of The Next Global Crisis”, says that America’s economy is resting on the edge of a knife between a depression and hyperinflation.

His advice on global finance is sought by the Department of Defense, the U.S. Intelligence community, and major hedge funds. He served as a facilitator of the first ever financial war games conducted by the Pentagon.

His thinking considers the numerous threats to the dollar at home with inflation and globally to dump the dollar as the world’s reserve currency.

The 2012 Mississippi State Auditor’s report for Pearl River County, the last one posted on his website, shows the county had $19 million (Exhibit 3-1, Pg. 9) in long term debt.

The Debt Analysis Schedule on Pg. 23 shows a total General and Limited Obligation Bonds of  $13 Million maturing in 2032.

Adding proposed new long-term debt of $15 million will give a long-term debt of some $28 million.

The county’s economy doesn’t operate in a vacuum, and decision makers must consider the current national economy, which is very dismal, disappointing and unfriendly to debt.

Sound financial management in today’s economy requires debt reduction and constraints on discretionary spending to give our county needed resilience in dealing with a potential global crash.

Going forward, our governments at all levels will have to reduce their budget sizes and raise taxes to support themselves, expecting little or no funding from the federal government.  The age of excessive spending is basically over.

Thus, the idiom, “Discretion Is The Better Part Of Valor”, says please give serious thought to any decision that affects the county’s wealth before bravely charging forward.

If you believe as I do, contact your county supervisor to voice your opinion.

And Christians take heed of 2 Chronicles 7:14.




Russell Sr.