Deficit spending atop piles of debts of about half-a-billion dollars is the issue to brave given the mounting obligations while leadership contends with the concurrent loss of revenue streams. The combination could very well turn out to be a bridge too far to traverse. It could easily snap and plunge right into the deep blue anytime soon, if not, already.
All the cheers of a new finding of additional resources is a mirage that doesn’t add up to such issues as the NMI’s inability to pay its share of funds for Medicaid, severe cuts in medical referral, the likelihood that PSS would overspend by $7 million; lack of nearly $40 million for CHC’s operations; hard to come by cash for CUC operations; and the inability of local government to pay its share of employer’s contribution with a total debt of more than $332 million. I need not beg the issue. You do the math and you’d see that it’s all a matter of time before we leap off fiscal cliff.
Debts and deficit spending plus accruing more debts via a planned flotation of pension obligation bond would only fast track our march into the nether land of debt crisis. Bond flotation has its own ugly requirement-loaning institutions would impose higher interest rates-when your grade is below par. This is exactly where we are today so broke you quiz with hopeful prayers how would the NMI be graded amidst a fiscally disastrous posture.
But may I respectfully withdraw from any further discussion so that our men of wisdom dispose of these issues forthwith in sober fashion. Did we hear somewhere the familiar lyrics, "Whisper words of wisdom?" Wasn’t this about a failed promise?
It’s a bridge too far to traverse, safely.
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Bankruptcy vs. taxpayers
When you hear debts like $332 million for the Fund coupled with plans to pile up more debts upon the local government, take a retreat and think once more what does it all mean to you as a taxpayer. You quiz what happened to the "experienced" team as the NMI heads to Fiscal Cliff.
It’ time to buckle down into the quiet corner of your mind to seriously assess how do you navigate your canoe amidst a huge super storm of bankruptcy most politicians would prefer snowballing rather than "telling it like it is".
1. You are hooked on to the unfunded liabilities the government owes the Fund on employer’s contribution of about $332 million.
2. You are hooked to millions of dollars more if the planned pension obligation bond is approved to pay off current debt. It literally boils down to a replacement of debts.
3. By the time this issue is settled temporarily, you are firmly hooked to the same pile of debt though in new debt service for fresh pension obligation bond loan.
4. You are also hooked to other obligations in the millions of dollars or the lack of money for CHC, PSS, DPS, medicaid, medical referral, and scholarship, among others. It’s an acquisition of more debts while revenues plummet as more businesses close their doors.
5.You are hooked to current family obligations to which your payment ability may be suspect or compromised.
The promise of restoration of 80 hours is struggling in the wobbly shifting sands of bankruptcy. It’s now 72 hours rather than the promised 80 hours. Is this indicative of the suspect projection of revenues that may fall way below what’s anticipated? Who knows, reduction in force may be the next step given the significant reduction in annual revenues.
Indeed, the huge contraction of revenue sources leaves a lot of difficult and significant questions upon politicians to wrestle with. Specifically, how does the NMI pay off mounting debts without compromising the future of our children in the midst of simultaneous losses in revenue streams? Isn’t it high time that we employ some sense of humble humility so we deal with the deepening mess in straightforward fashion? No worries. I am not running for office thus the freedom to take the villainous role in the interest of honesty in the conduct of state affairs.
Would approving pension obligation bond ensure the life of the Fund on a long-term basis or will it be a temporary solution? Yes, it may temporarily address issues with current retirees, but what about pension for the rest of their lives and pension for future retirees? The beast would still be around to tinker with like a two-headed corn snake, right? The NMI chops one head ignoring the other?
Where dystopia (meaning, where nothing works) has set in, the air of uncertainty is just about the only certainty that has settled uncomfortably in our minds. With fiscal trauma never before seen in our developmental history, would there be sunny days ahead so we replace the gloomy dark clouds hovering over these isles?
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Questions taxpayers must ask
Whichever sector you’re in-private or public-the pessimistic lean days ahead necessitates working for the best while preparing for the worse. Agonizing this may be, each taxpayer must diligently review the traumatic fiscal posture of the NMI. It helps to know what’s at stake in a setting where nothing works.
You must begin questioning the fate of your job in a woefully bad economic meltdown. It includes questions about income stability: will it remain the same, adversely affected by more work hour reduction below 64 hours biweekly or completely wiped out by the likely imposition of a reduction in force?
How would you deal with health issues, i.e., a family member being afflicted with catastrophic illness? Would your health insurance ably cover off-island health costs? How do you deal with the costly expense of a long-term illness that requires hospitalization in off-island medical facilities?
Would you ably help your children that are still working on their undergraduate degrees? Will it necessitate their amassing federal loans for their purposes or would taking up part time jobs (break from class) be the other option in these lean times?
Too, would your income remain stable to cover real estate loan for the first family home? What happens when both you and your spouse are no longer gainfully employed? How would you pay for the first family home and basic family obligations? Indeed, these are difficult issues to deal with in a listless economy.
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John DelRosario Jr. is a former publisher of Saipan Tribune and a former secretary of Department of Public Lands.