The right way vs. the Council way

An EDITORIAL

     What if you get home from work today and find that your refrigerator or central air unit has gone kaput.
Scenario One:
♦ You start shopping around for a good price on a new refrigerator or you call your reliable HVAC man and start looking at price options.
♦ You don’t have enough money in your checking account to make the repairs.
♦ Fortunately, you have a contingency fund – a “rainy day” fund with a little money.
♦ If you take the rainy day fund, and cut your regular checking account balance to the bone, you can make it through the emergency and all ends fairly well.
♦ You’ll have to build back your rainy day fund.
Scenario Two:
♦ You start shopping around for a good price on a new refrigerator or you call your reliable HVAC man and start looking at price options.
♦ You don’t have enough money in your checking account to make the repairs.
♦ You don’t have a contingency fund – a “rainy day” fund.
♦ You have to finance with the store, finance with a bank, or – worst of all – you have to finance with your credit card at a ridiculously high interest rate.
♦ You promise yourself that when you get this paid off, you will put aside a small amount each payday for a “rainy day” fund.
Different approach
How about your hypothetical neighbor?
♦ He gets his credit card bill one day and discovers he has a borrowing limit of $20,000 (at a ridiculously high interest rate).
♦ He immediately starts figuring what he can buy with the money.
♦ He spends it all, and then some.
♦ He comes home the next day and his refrigerator has died.
The Grenada Mayor/Council
♦ The Mayor/City Council finds out that there is still $6 million left in the city’s borrowing power. (The borrowing power of a city is determined by the total assessed property valuation: the value of your house and mine.)
♦ The Mayor/City Council immediately takes steps to borrow up to the city’s entire borrowing capacity. No “rainy day” cushion is left.
♦ The Mayor/City Council then starts looking for places to spend the money to impress voters before the politicians face re-election in May. (The Mayor/Council still has not released a final list of how they intend to spend the money they borrowed from you.)
♦ The Mayor/City Council are not really concerned about the payback – the principle and interest on the loan will have to be paid by the taxpayers – not the politicians.
Voters can change this
     Whoever heard of going out and borrowing a bunch of money, and then looking for ways to spend it?
     How long would your household function if you ran it like the Grenada Mayor/Council runs the city?
     You can do something about the problem when the mayor and the council are up for re-election in May.


(Note: The $6 million bond discussed in this article has absolutely nothing to do with the sports complex bond. That is a separate loan that will have to be paid back by taxpayers who eat at local restaurants and visitors to local motels.)