A reality based independent journal of observation & analysis, serving the Flathead Valley & Montana since 2006. © James Conner.

7 May 2015

Carl Glimm’s glum view of public debt

glimm_carl_100

Republican State Representative Carl Glimm (HD-6, map) voted against HB-416, the modest infrastructure improvement bill that failed to secure the constitutionally required two-thirds majority for issuing bonds. In today’s Flathead Beacon, he explains why he voted to let roofs continue leaking, and potholes continue growing: “I am not for bonding, especially when we have the money in the bank to do the work.”

His conclusion:

In the end, I voted against the bill SB 416. Not because I am against infrastructure, quite the opposite, but because I am unwilling to put our kids and grandkids on the hook for spending that we have the money to pay for right now. The federal government has went down that road to a place I’m not sure if we will ever return from. I refuse to put Montana on a course that would follow.

I hope you understand my position.

I do understand your position, Rep. Glimm, but I don’t agree with it. Neither did two-thirds of the MT Senate. Neither did almost two-thirds of your colleagues in the MT House. Neither did virtually all of the financial experts who testified before the legislature that with interest rates very low, now is an especially good time to borrow.

Keeping money in the bank to deal with unexpected contingencies, for a rainy day, and judiciously borrowing when advantageous, is prudent for both citizens and their governments. Spending down a comfortable bank balance to a dangerously low level is not.

Glimm’s rationale for his vote evinces a deep, and I think unreasonable, fear of debt that works against an individual’s enlightened self interest as well as against a state or nation’s enlightened self-interest. Taken to a logical extreme, it would lead to raiding a retirement account to pay for a house instead of taking out a mortgage to spread the payments out over time in order to preserve the retirement account or, say, money set aside for a child’s college education.

His comment on the national debt, “The federal government has went down that road to a place I’m not sure if we will ever return from,” does not square with history. Expressed as a percentage of the gross domestic product, our current level of debt is lower than it was at the end of World War II and the Korean War:

John F. Kennedy, citing folk wisdom, once said, “The time to fix the roof is when the sun is shining.” Bond rates are low, the economy is improving, unemployment is falling. The sun is shining. So I’m not buying Rep. Glimm’s argument that it’s a good day to stay inside and leave the roofing tools in the box. I think he and his naysaying on infrastructure colleagues simply thought it was a good day to subordinate fixing roofs and filling potholes to poking Gov. Bullock in the eye. Revenge before responsibility, poisonous partisanship über alles.