DEBT - October 29, 2010

The present brouhaha about debt makes me think about what happens when you switch one kind of debt for another. In this case we are being urged to exchange a naïve debt for a subtle one: the debt inherent in prolonging the maintenance and repair of a valuable asset, like a house, car or bridge. An extreme example is the neglect of the condition of the I 90 bridge in Minneapolis, whose cost in lives, wounds and money far exceeds the cost that would have been involved in repairing it as soon as its failings were uncovered. A less obvious example would be the slacking of the educational effort in the early 1950s, until the launch of Sputnik occasioned a crash effort to beat the USSR to the Moon. Even subtler is the increasing loss involved in slipping from the top of the table of countries’ elementary education to nearly the bottom of industrial nations (in spite of the oft-repeated canard that we are the best in the world). That rot has now reached the high schools and is nibbling at undergraduate universities. A similar invisible debt is found in delayed repairing of roads, hospitals, water and sewage facilities, and other essential civic services. Waiting until the neglect reaches crisis levels, as in the water supply system in London or the potholes in Madison often means urgent repair, in a short time and at an advanced cost. As real estate and automotive dealers know, such urgent repairs come at frequently at many times the cost of doing them when there is time to plan and negotiate. The cost of neglecting maintenance and repair needs are often many times the costs of interest upon debt to fix them properly, when the needs of those repairs are driven by urgency, although the costs of negligence are overlooked in what is seen as a temporary gain. That is true of the austerity budgets in education, health, fire, police, water, sanitation and other civic needs in UK today and in the crisis budgets that the GOP want to impose upon us all in the coming years.