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Friday, April 18, 2014

Navigating major revenue decline

It’s painfully unsettling the disoriented financial posture of the NMI. It now spends more than it collects in taxes. A Department of the Interior-commissioned study confirms unbridled disposition of scarce public funds.

The administration fancy-footed to try discrediting Interior’s findings as inadequate. Hold it! The people who did the review aren’t local Republicans but are highly credentialed folk in their field. Therefore the administration’s lame snowballing doesn’t hold water.

Be that as it may, there’s a shade of personal optimism, though that misty provincial politics that have blurred our vision has cleared the playground. The thunderous mandate inherent in the Voice of Sanity is a tale that our people aren’t settling for more ill prioritized use of scarce funds for useless pet projects, including junkets. Otherwise, submit your applications to DCCA for sports jobs or a travel agency!

Coincidently, Rep. Ron Paul, a libertarian, said something that echoes the essence of freedom and liberty I associate myself with in his last remarks to the U.S. Congress: “It’s quite apparent that our people are seeking the truth and finding the answers in liberty and self-reliance promotes the optimism necessary for restoring trust in good governance and prosperity. The task is not that difficult if politics doesn’t get in the way.

“Is there any explanation for all the deception, the unhappiness, the fear of the future, and the loss of confidence in our leaders, the distrust, the anger and frustration? Yes there is, and there’s a way to reverse these attitudes. The negative perceptions are logical and a consequence of bad attitudes coupled by bad policies bringing about our problems. Identification of the problems and recognizing the cause allow the proper changes to come forthwith.

“Many of our people are unhappy with the government’s performance and it recognizes that government is merely a reflection of a growing immorality that has rejected a moral government of constitutional limitations of power and love of freedom.” This is what it did in loud and clear repudiation in the last midterm election.

“Too many people have for too long placed too much confidence and trust in government and not enough in the self. Fortunately, many are now becoming aware of the seriousness of the gross mistakes of recent past. A majority of voters demand to hear the plain truth of things and want demagoguery stopped. Without this first step, solutions are impossible.” How true!

Options in listless economy

The combined lack of socio-economic plan, the resulting self-inflicted disorientation, fully honed complacency and ear-to-ear smiling celebration of apathy has piled up into economic cataclysm (disaster). Wary of its failure, GOP leadership tries to change the conversation, spouting the victim syndrome. Nice try!

But weren’t you elected to bring your people to higher, safer, and level prosperous ground? Did you fulfill your fiduciary duty, critically guarding the deepening economic mess from complete dystopia—where nothing works—by turning your heads the other way? Why try to rearrange the chairs on the deck when our “Canoe of Tears” has turned belly up?

Over recent past, leadership has had the opportunity to revisit the arcane tax system to see if its intended goal still works. If not, would another system be a better alternative like sales tax widely embraced by various states in the union? Did leadership take a retreat to revamp punitive and stifling policies that have chased foreign capital from the islands?

Did leadership lift a finger to revamp the pension program ensuring corresponding contribution so it is sustainable over the long haul? Were funds seriously earmarked for CHC? What did it do proactively to lower the horrendous and destructive cost of utilities with private industry expansion in mind? Did it work on a set of plans to revive reinvestment or revenue generation? Why the reticence? Were there significantly divergent views you find unpalatable?

The one thing leadership failed to do, though these issues are right below its nose, is the fact that none of these issues would move anywhere on their own. It needs someone with leadership to move in and take the beast by the horn and bring it to the appropriate venue for insightful organization, articulation, and implementation. These issues aren’t rocket scientist stuff, though some require technical expertise. Does leadership have principle-based explanation for its long snooze on the job? Humiliating!

In spite of all the odds, products of “do-nothing” leadership, I’m guardedly convinced this mess could still be fixed, though it would be a very protracted process. Well, this is one time when the GOP found itself under its own bus trying to figure out if its self-induced coma really worked or otherwise.


On pension obligation bond

Jefferson Country, Alabama, is saddled with an historic bankruptcy case where the city tries to ward off Wall Street banks from the $3.2 billion it invested in a sewer system. The struggle is in the fact that the city has defaulted and finds it hard meeting its debt service.

As such, it begins seriously considering more jobs cut, a shutdown of a hospital designed for the poor, among others. Turn this around and consider what if the NMI fails to meet its debt service when it floats POB to pay off liabilities owed the Fund for a cumulative debt of at least $2.6 billion (inclusive of power plant deal).

It may mean a huge cut on the pension and health insurance of the Fund, hospital service, cost of PSS’ operations, other services from the various agencies. It’s good, though, that the POB law isn’t an automatic carte blanche authority for the administration to dispose unilaterally. It requires a study to justify whether the NMI could borrow and how much.

Lest we forget, the NMI has a very fragile economy, tourism being fickle; spiraling upward then nosediving when financial conditions shift downwards in nearby countries. Would there be other industries established here in the near term? Not with federal minimum wage and woefully poor business climate consistently stifled by punitive policies.

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