Here is a great illustration that simplifies how raising the debt limit works and what the long term repercussions can be. The example explains it in relation to a small home owners association, but the same general principles can be applied to both small and large government. What Polk City is proposing by going forward with this new bond, on top of all the other mounting debt that had previously been accumulated, is clearly right along the same lines as demonstrated in this example. The proper way to clean up the debt problem is to reduce expenses and sell off assets that have gotten the city into this financial hole, not to dig the financial hole even deeper.
The Debt Limit: Made Simple
the question is what can we do to stop this??? Is there anyone working on a recall??? If I were there I would , but am away. I will do anything I can . Please someone step up.
ReplyDeletethanks
Senior Polk City resident
did I miss something in this post. can't seem to access the example. please re post. thanks
ReplyDeleteThe problem with the link has been fixed. Sorry about the confusion.
ReplyDeleteIf you drive a vehicle for 30,000 miles a year would you finance it for seven years? The same thing is being done with the anticipated bond issuance. Let me explain:
ReplyDeletePlease keep in mind the equipment that was purchased for the plant on Steven Drive was USED when it was purchased. The average service life of a WWT plant is 20 to 25 years when built with NEW equipment. So the questions we must ask is how much service life is left in the used equipment? How will upgrades and repairs be funded, and most of all the bond money is financed how many years after the expected service life of the facility.