A strange deluge came cascading down Capital Hill. It’s called "debts" and "deficit" spending. We have more than our share of the former while we begin regrouping to pile up more debts shortly via pension obligation bond and the "surprise" Delaware sole source contract.
In the interim, we’ve emailed the Golden State to make room for the NMI to join the choir sing, "California Dreamin’ on such a debt-filled day."
It’s demagoguery, not leadership, a perfect package of evasive quick fix set to rein-in explosive debts that will annihilate the future of our children. We’d be drowning them in the sea of financial catastrophe, fiscal calamity, and paralysis. What legacy!
Unfortunately, the issue is muddled and laced in abstraction. In other words, it won’t be perceived clearly by ordinary citizens as fiscally disastrous unless translated into simple and insightful layman’s term. But for now it’s an initiative that falls short of lasting solution to an insolvent fund.
The guys had to do something: Would saddle posterity with immense debts shortly. Interesting though how politicians always tell us to do the wrong things for what they say are the right reasons. But isn’t this an issue equally of conscience and values? Are we not supposed to guard against bankrupting our children?
Legislators should have reviewed whether "discretionary" policy is better than a "set of rules" governing the parameters how the NMI should approach this issue. They didn’t and end up embracing a bad decision that would only prolong and intensify mounting debts.
Now, voters would be asked to consider a mechanism that would enable the local government to use pension obligation bond (loan) to pay off the current debt of some $332 million. The mounting sorry fiscal episode reveals an historical lesson: Career politicians weaken government accountability and breed hubris. It’s difficult changing their ways stuck in political rigor mortis.
In boom times we splurged raising pay and assorted benefits mindless of future costs. In a heavy economic downturn (meltdown), funds for the central government collapsed just as the bills came due. It now owes the Fund $332 million!
Simultaneously, its fiscal calamity is such that it isn’t equipped with the revenue streams to pay what it owes, what it will continue to incur in debts while fanning the fire of total financial calamity. But legislators aren’t helping any. It’s a dystopia-meaning, where nothing works-and who knows what lies ahead as more folks are forced into the miserable life of "Life in NAP" and other humiliating and debilitating conditions.
Dissecting the debt
For the sake of discussion, let’s assume that leadership succeeded in securing some $300 million in pension obligation bond to pay off debts with the Fund of some $320 million. Let’s also assume that under the debt service agreement we must pay some $30 million annually for the next 20 years.
It means paying the combined interest and principal on the loan of about $600 million in addition to the original loan of $300 million for a total of $900 million over a 20-year period. You divide the total against a population of 56,000 people and it pans out to fees for every child, man, and woman of not less than $16,071 per year on this loan alone for, yes, 20 years. This fee doesn’t include taxes under the current system.
Pension firms would demand something like 20 percent in interest given the volatility of our financial posture-as crispy as our marshland reed'snapping and crumbling to pieces when it’s dry. What would the interest be?
Now, does the NMI have the financial wherewithal to pay off its debt service over a twenty-year period? Have we taken an ocular review of losses in revenue in recent past, its concurrent impact versus mounting obligations, and contraction of the local population against who have fled a listless economy? What do you have on our radar that says otherwise over issues we’ve failed to critically review as listed above?
What if some 20-30 years from now the Fund goes belly up once more? Would our debt-strapped children have the financial wherewithal to cover for a mess committed by their elders who exited the issue under the quiet umbrella of convenience? This doesn’t go too far in ascertaining a future for them, right?
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Caveat: The current debts, deficit spending plus a newly signed secretive contract on diesel-powered generation plant of $190.8 million would result in the following: 1. Consumers would forcibly carry the burden of the new CUC debt; 2. More of private industries would put on shutters given the prohibitive cost of doing business in the NMI. It would effectively clip the NMI’s ability to pay for current and future debts of over a billion dollars. Mind-boggling the audacity to impose more hardship right smack in the midst of a fiscal ship that just turned belly up.
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Partial shutdown at CHC
Per chance, I happened upon a news flash of Outpatient Department at CHC shutting down until further notice. It’s the victim of fiscal calamity engulfing the entire archipelago.
It’s mind-boggling how this administration knowingly denied CHC sufficient seed funding for operations. Experience has it that it needed some $40 million. It basically gave CHC a piece of bone of some $5 million. It’s a tale how it ruthlessly places the health and well being of our people at Death Cliff. The Legislature alluded to the dire need to cut expenses at the hospital trying to wash off its hands. No worries! We can read, listen, comprehend, and analyze without hooked on phonics you guys failed from the outset.
If both branches purposely shirked their fiduciary responsibility on healthcare by shoving off the basic seed funds the hospital needs for purposes of transition, it (CHC) begins to sputter and you can’t blame the CEO, doctors and nurses for a monstrosity, a creature of failed leadership. Is the use of common sense or principle-based reasoning that difficult for people at the helm? Do any of you have any sense of Christian values? Why beat down against the innocent you’ve failed to represent in straightforward fashion in our governmental institutions?
What gall trashing the needs even of critical patients. Would you do that if the critical patient were your spouse, children, mother, and father? Appalling! Isn’t healthcare one of three essential services in the NMI other than education and public safety? That you’re suffering from political rigor mortis isn’t a reason to trash the health of the general public.
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John DelRosario Jr. is a former publisher of Saipan Tribune and a former secretary of Department of Public Lands.