Not-so-spiffy buildings

Posted: Wednesday, October 16, 2002

A more detailed view of the various ballot issues facing Alaska voters in November can be found at:

Thinking about bonds, some seem to believe that a "bond" is either a close relationship or a gift from the "government." Yeah, I wish!

A "bond" might be thought of as spending now and paying later. Paying for it plus interest, plus generous legal and investment banking costs. Clearly, it's a very large debt. A financial "bond" is an interest bearing certificate issued by government (taxpayers) to pay the holders a specified sum of money on a specified date. It's like a super, one shot, Master or Visa card charge. Contrary to popular belief, the money to repay the debt, plus interest, does not come from another planet. It comes, mostly, from taxpayers one way or another, and often we taxpayers will repay almost two times the amount of the original bond principal, depending on market interest rates when the bonds are issued and duration of the loan. Think of it as the opposite of "pay as you go."

Propositions A, B and C on the ballot this November total $963.5 million, principal sum. That's about $1,500 debt for every person in Alaska, including your kids. For young adults age 20, it's a state government payment obligation, every year, until they are age 40. For seniors age 65 or older, it's a near life sentence of state government debt repayment.

Additionally, beyond the A, B, and C of bonds, we have Ballot Measures, "1,2 and 3." Nobody knows what Measures 1, 2 and 3 will cost. Some, I believe, would rather we did not ask or think about it.

Finally, I have never seen a spiffy school building teach a child a thing. Have you? Children all over this world learn in not-so-spiffy buildings and many become remarkably well educated. My daughter, a doctor, and Abraham Lincoln come to mind.

Bud Palmer


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