WJBC Forum: Government needs to pay as it goes

Mayor Steve Stockton, center, speaks during a Bloomington City Council meeting. (Photo by Ryan Denham/WJBC)

There are two sides to every transaction.

For everybody who pays for a product, someone receives the money and gives up the product. In order to see the whole picture of any economic transaction you must add the inflow and the outflow. Accountants call that double entry accounting.

It is impossible to have one side without the other, although we often prefer to ignore what we don’t want to see.  Government accounting is no different. For every program and for every payout there has to be money coming in.

That means taxes. If there are no tax revenues, there can be no spending by government. Even when Washington prints money, there is a balancing transaction they don’t want you to see. That hidden entry into the national ledger is a promise of taxes to be taken up at a later date. That is what we mean by debt-backed currency.

Just like the deficit spending in Congress, Bloomington also spends money it doesn’t have. Usually cities borrow the money in the stock market by selling bonds. Bonds are simply the promise to pay back investors tomorrow for what we spend today.

Bloomington has over $70 Million in outstanding bonds, and that doesn’t count all of the interest. Our city has also taken out additional loans, such as last year’s $10 Million loan from the Illinois EPA to fix sewers that are old and out of compliance.

When we extend payback of our debt for several decades, we are basically saying we want the next city council and the next generation of citizens to deal with today’s overspending. With some of our debt stretching out 30 years, current and past councils can brag about what they bought and hand the bill to our grandchildren.

I don’t think that is the correct way to approach government. I think that programs should be paid for during the generation in which the money is spent, and during the time in office of the aldermen and women who spent it.

If you can’t pay as you go, then borrowing should be strictly limited to avoid the situation we are in today as a city, a state and a nation. When you look at both sides of the ledger you will see that the good things we want to do come at a cost. Let’s pay for those things ourselves so our children won’t be left holding the bag.

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Lex Green was born in Bloomington, Illinois and graduated from Bloomington High School. He is married to Karen and has 3 grown children. His family has roots in McLean County going back to the 1820’s. He ran for Governor of Illinois in 2010 as a Libertarian. He is the Political Director of the Libertarian Party of Illinois, the Chairman of the McLean County Libertarian Party, and Coordinator of the Illinois Tenth Amendment Center.

The opinions expressed within WJBC’s Forum are solely those of the Forum’s author, and are not necessarily those of WJBC or Townsquare Media.