Time To Pay Off Our Debt By: Anthony Pellegrino, Part I

As the new millennium opens, the CNMI’s accumulated debt as of September 30, 1998, stands at $80,600,000 and growing! Add another $20,000,000 plus or minus for the fiscal year 1999 and it will top over $100,000,000. With little hope of a dramatic increase in government revenue, this astronomical debt cannot be repaid in the near future. Even worse, the debt is increasing daily further shattering any hope of repayment. No matter how hard the administration shrieks to practice austerity, the debt continues escalating. We must retire it.

This past year the government borrowed $16,000,000 for the PSS, repayable in ten years at $2,000,000 per annum. The government is about to borrow another $50,000,000 for matching funds for CIP projects. This loan too will have to be repaid in about ten years. Add this new debt of $66,000 to the already existing $80,600,000 for a grand total of today’s known debt at $146,600,000! How long can we keep borrowing without repaying? Someday we will have to face the inevitable–bankruptcy!

We have borrowed money from our children and grandchildren without conscience. We have stolen their future and over $146,600,000 debt and growing! Bluntly put, we are living off the future inheritance of our children! If we have the courage to take it, there is a solution.

By implementing drastic measures this astronomical burden can be wiped out. Currently there is about $35,000,000 in individual rebate tax money and about $15,000,000 in corporation rebate money for a total of $50,000,000. Consider the following.

Place a moratorium for at least two to three years on rebating that money and instead use it to pay off the debt that is slowly strangling us! Think about it–$150,000,000 will wipe out the entire debt!

Consider the following points:

A. We must not pass on this debt to our children who did nothing to create it. It is our moral obligation to wipe it out.

B. If we are honest with ourselves, all of us have enjoyed the benefits of this wildcat spending. During the years the debt was accumulating, government workers enjoyed pay increases, infrastructure and new roads were built, more people were hired; the list continues.

C. In two to three years we can be solvent again. We will regain the creditability that we have lost. Government will be able to rehire people.

D. We caused the debt and we must repay it from our pocket. Had we borrowed the money from a bank, wouldn’t we have to repay it?

E. Using tax rebate money is the easiest and fastest way to rid ourselves of debt and get on with rebuilding our economy.

F. No other State in the world has such a generous real estate tax system. Time for a free lunch is over. We cannot afford tax rebates when we are wallowing in debt.

G. The disastrous effects of trying to repay ever larger sums will surely overtake us. This is sheer fiscal madness.

H. New investors are not knocking on our door. They have shied away for reasons discussed previously. We are alone in our miserable debt.

If truthful, we will realize we are clinging to a dreamthe revitalization of our economy without any pains from us. Face it. We have spend all our money neglecting to save any of it when we had it. There can be no justification for incurring such a huge deficit and not repaying it. By paying the debt from our rebate tax money rather than from increased taxes, the pain is durable. (continued)