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Monday, July 1, 2013

Magical or stupid

Magical or stupid

“If you borrow money to make money, you've done something magical. On the other hand, if you go into debt to pay your bills or buy something you want but don't need, you've done something stupid.”

Seth Godin

Mr. Godin was talking to business owners and private individuals. His wisdom can be applied to cities, school districts and all public agencies with a little rewording:

If you borrow money to build the city (or district or school) you’ve done something magical.” The second phrase applies without change.

It’s magical because borrowed money becomes improvement in infrastructure that attracts more (productive) people and grows the city. Borrowed money builds computer labs and provides funds for materials that help students learn and excel, which makes their parents proud. People move in because they want their children to learn and excel.


Borrowing to pay off operational debt or to buy beautiful new District Offices is stupid. Borrowing when the payback is fifteen times the amount borrowed is really stupid.

Buying things that may be nice is stupid. Buying things with public money to help the current decision-makers get re-elected is immoral as well as stupid.

And silly 

There’s a kerfuffle in the paper about the results of an in-depth investigation into Mesa Water. The gist of it is, some of the directors ordered salmon when they should have had hamburgers. Beyond that, some expenses on the district credit cards may have been excessive to the need. About a third of a percent of the total expenditures by the district was questioned.

As a Board, they made good decisions concerning millions of dollars. They achieved an independent water supply for Costa Mesa. Their financial decisions make us highly bond worthy (for pipe repair and to cover emergencies). There may be waste in the expenses that total less than one percent of the overall expenditures. If that’s the case, hand slapping and better oversight are in order.

A billion to make him feel good

Self-serving decisions about spending other peoples’ money is endemic. One estimate of the cost so far for our President’s and his family’s personal entertainment and relaxation exceeds a billion dollars.

If the opportunities of public office include stealing (legally, for the most part) from constituents, we have a problem. If we let it pass, or worse, condone it, or worst of all, try to join in at the feeding trough, we get the representation we deserve.

Boot 'em or watch TV and go to bed? 

In Costa Mesa, it’s up to us. We have to decide, do we want people who borrow money at outrageous rates in office? Will we re-elect politicians who spend our money buying our votes?

Monitoring politicians, writing letters, and attending meetings are all time consuming. We have to watch for overpriced bonds and vote-getting eye candy. Or we can gossip over the fence about some schmuck who probably overspent on dinners, and go back to watching TV. And accept the stupidity.

We get what we are willing to work for – and what we deserve. 

Including stupidity.

What do you think?

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