Bismarck Tribune - North Dakota News - State’s surplus is <br />just credit flipping

State’s surplus is
just credit flipping

Feb 11, 2007 - 03:58:22 CST

By DUSTIN GAWRYLOW
Mandan

In all the talk of how to spend the state surplus, one area has been mysteriously missing from the discussion — debt.

According to the State Office of Management and Budget’s management’s discussion and analysis for fiscal year ending June 30, 2006: “The state’s total debt (bonds and notes payable) increased during the fiscal year to $1.64 billion, an increase of $100 million, or 6.4 percent, which represents the net difference between new issuances and payments and refundings of outstanding debt. During the year the state issued $404 million in bonds and $637 million in notes.”

Now, you may say to yourself, “But I thought the state was running a surplus in excess of $500 million.” It doesn’t take a former accountant from Enron to figure out what is going on here. In fact, any recent college graduate with an average of $18,000 in debt can tell you exactly what is going on here — credit flipping.

Far too many Americans make the ends meet by paying off one credit card with another, so it is not a surprise that governments that are strapped for cash would do the same thing. Certainly our government — federal, state and local — should not get into the same practice.

Back to the surplus: If the state issued $100 million in new bonds and $304 million in bonds that renew old debt, how can anyone with a shred of intellectual honesty claim that there is really a surplus?

The only reason there is a surplus is because a large chunk of debt was rolled over and new debt was created. This is akin to someone taking a cash advance on one credit card, making the minimum payment on another card, and keeping the rest of the cash and claiming a surplus.

There is no surplus. It is all a numbers game played by accountants and politicians wanting to spin some political advantage.

It was wrong for Enron to play these number games. It left many employees jobless, and many investors broke. Our own state must not play these games with the future financial security of the state.

News > Opinion

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just credit flipping

Comments

Umbilical Cord wrote on Feb 11, 2007 6:27 PM:

" Our local nit wits (Republicans)can't seem to absorb the fact that the federal goverment is massively in dept. If you are a teenager living on your parnents dole, you are broke when your parents are broke. The United States has a massive bill owed to China. Unfortunately that means the whole family owes China. If you think you can buy cheap crap at Walmart and not pay for it you live in a dream world. China sends us junk, we don't sell them much of anything. China, being the nice communist they are say, "Just pay us when you get the cash". Now bean brain Bush refuses to raise taxes and pay for his fun little war, so we don't have the cash to pay our good Chinese friends. When our friends in China insist on being paid George is going to have a hard time coming up with the cash. Like the many home owners who are living on second morgatages, Bush is trying the same scheme. Who would have ever imagined that we would be in debt to China? At some point the world will wake up and realize the United States is living on welfare. When this happens people will look back and see what a wonderul man George Bush was who thought he could run a war on credit cards. Our children will celebrate George Bush day by going out and charging something they cannot pay for. God Bless W, the idiot that ran us into the ground with tax breaks for the rich and bombs for the wrong country. "

Agree wrote on Feb 11, 2007 6:18 PM:

" I am so proud to be a Democrat, we are the most honest and loyal people on the face of this Earth. Right William Jefferson Clinton? "

Barney wrote on Feb 11, 2007 2:55 PM:

" I agree there is corruption in the Republican party just by their non action in regards to allowing corruption to continue at WSI. I will strongly push to have Dems in control in 2009 so the WSI CEO is fired, the incompetent board is disbanded and the Republicans whine/cry. They will lose in 2009 in ND becuase they will DO NOTHING to change WSI. People are fed up and want a change at WSI but the Republicans won't. "

Republican Facade! wrote on Feb 11, 2007 12:09 PM:

" This is just another example of the "Smoke and Mirrors" that our 2007 N.D. Republican controlled Legislature has pulled over our eyes in North Dakota. The Republicans have shown how their corruption and dysfunction has affected not only the U.S. citizens but also the local citizens of North Dakota. They are the most corrupt, dishonest, and greedy Republicans this country has ever had to endure. They ONLY represent the rich and greedy people of the U.S. They do absolutely NOTHING for the poor, disabled, or middle class citizens who are stuck with the majority of the federal and state taxes. Who did you vote for? "

WHATEVER wrote on Feb 11, 2007 9:55 AM:

" Whether or not there is a surplus, Republicans attempted (but failed) to try to use it to win the election in 2006. I think people are finally "getting it". The Republican party, from the national level all the way down, is a corrupt outfit that will do anything to win. The tide is turning and 2008 will likely prove to be even worse for Republicans than 2006. "

Amen wrote on Feb 11, 2007 9:36 AM:

" You are exactly right. You cannot rely on money from a federal goverment that is massively in debt, when you are a welfare state. North Dakota lives at the grace of welfare for farmers. If the federal goverment cut off the welfare checks for farmers North Dakota would collapse. The fraud is created by people that pretend North Dakota has a self sustaining economy. When the Bush administration puts suffcient strain on the federal budget that cutbacks are mandatory, there is no question the welfare for North Dakota will be cut back, then the curtain will lift from the illusion that we are doing well. Anyone with the power of observation would know that North Dakota has a road system is cannot afford or sustain without federal help, and so it goes with every aspect of North Dakota. The phoney Republican sops we have elected have the audacity to present the picture that they are heros because they can scam the federal system. The game will soon end. "

Great Work wrote on Feb 11, 2007 8:38 AM:

" Thanks for doing the numbers. Bismarck seems to have a problem with raising taxes because they have have less taxable income in 2007 then 2006. How can that be? Many new box stores and new building should have brought in more money not less. Get Bismarck's city commission under control and their taxes and Mandan's will follow. It not surprising that cities can do great against every town except Bismrck as far as salaries go. "

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