Monday, June 8, 2009

The Future Perfect Storm

Jeff Abbott, Ph.D., J.D., an adjunct scholar with the Indiana Policy Review Foundation, who teaches in the education department at IPFW writes the following in the June 3, 2009 edition of the Decatur Daily Democrat.

If your family overspends its income this year by $628, and by $7,246 next year by $2,835 the third year, your family’s accumulated deficit will be $10,709 by the end of the third year. At the end of each year your family informs you that they just can’t suffer the pain of budget cuts. They ask you to borrow money to cover the deficits. Assuming you get an interest rate of seven percent, the $10,709 deficit will increase to $12,097 by the end of the third year.

If five zeroes are added to each of these samples deficits, they become $62,800,000 $724,600,000 and $283,500,000 – the amount of Indiana’s projected deficits for fiscal years 2009 through 2011 as set out in the state Web. site.

When the money needs to be repaid in 2012 where are we, the tax payers going to find the cash?

Stimulus monies can not last forever. That light we see at the end of the tunnel might be a train bearing down upon us. - Kyrie Eleison!

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