Bond on the Run: Some Observations on Ten Town Hall Meetings

Over the past forty days, Mayor Mike Johnston and Denver City Councilmembers hosted a series of town hall meetings across Denver to promote a request for new debt that could arrive on the ballot this November.

Starting with Chris Hinds, Council District 10, and ending with Diana Romero, Council District 4, the town hall meetings were not to discuss whether new debt for the city makes sense. Rather, the meetings were to discuss how to spend the new debt.

After attending all ten meetings, several observations stand out. The word “debt” was never mentioned by the politicians. Debt, apparently, is a four-letter word. “Bonds,” on the other hand, are worthy of high praise. This praise was repeated endlessly.

Bonds buy things for the city was the overarching message heard at all ten meetings. Bonds are money, bonds are good, bonds make us happy, bonds pay for things.

Really, do bonds pay for things? Isn’t this like saying, “Credit cards pay for things?” Nothing is paid for by a credit card; a credit card is only a tool, a piece of plastic. Everything is paid for by us, the consumer.

Nothing is paid for by a bond, a bond is only a tool, a financial note. Everything is paid for by us, the taxpayer, every single penny. And when we use bonds, we waste enormous amounts of taxpayer money – city budget money (same thing).

When our politicians give credit to bonds for paying for things, they are doing two things. First, by not giving credit to the taxpayers, they are disrespecting the taxpayers. Second, they are giving the credit to the banks — bonds and banking are the same bucket. Banks pay for nothing.

Bonds are debt; to praise bonds is to praise debt. Bonds are a liability for the city, additional expense for the city.

Over ten meetings, Mayor Johnston gave zero credit to the taxpayers. He did, on the other hand, give credit again and again to the “investors” (takers) who buy the bonds.

The idea that our government relies on investors (takers) makes no sense to begin with, considering that our government is for the common good, not private profit.

Too many business terms are being used when talking about government budgets. Government debt and business debt are two very different forms of debt. Business debt is about leverage and financial return. Government debt is not leverage, it’s just additional expense for the city and the financial return goes to the investors (takers) – private profit, social cost.

We should see our governments’ budgets similar to the budget of a homeowner’s association. This simplistic, but relevant comparison works to illustrate the difference between government debt and business debt. This microcosm of government, the HOA, shines light on the realities of revenue – the money comes from the people who live there, and any money given to the banks is wasted money.

Another observation was the number of times Mayor Johnston and councilmembers mentioned that “the voters will decide,” as though new debt for the city is driven by democracy. It’s not.

Additional debt for our city has been driven by our politicians who thought it up, planned it out, and promote it endlessly, all the while taking no responsibility for the genesis, as though that’s irrelevant. Blame the person holding the bag — or should I say, holding the debt.

Our politicians are responsible for government debt and they shrug off this responsibility as they blame the voters. Politicians putting debt on the ballot and telling the people what they’re going to buy with this debt is a bit like putting chocolate cake in front of friends and family.
Government debt is an unholy alliance between our politicians and our financial systems. This shortsighted nonsense is causing long-term problems as we take our budget money and give it to the Wall Street banks.

It’s greedy to think the city should buy new things using debt, while leaving the next generation of young adults paying the bill. Greed is good: This is what I saw at ten town hall meetings.

Operating without debt is, by far, a better financial strategy for our city.

The very idea that we “finance” our government is like saying, “I think I’ll finance my life so that I can travel and do yoga.” This make no sense to begin with; my life is not a business to be “financed.” Our government is not a business to be “financed.”

Running a city without forever debt will give us more of everything (except for banking expense, attorney expense, accounting expense, financial staffing expense, financial insurance expense, etc). Basic math.

Do new parks always get funded? No. Do new recreation centers always get funded? No. Does the bank always get paid? Yes.

When we use debt, we’re actually shifting the budget further away from funding parks and recreational centers as we shift the budget towards paying the bank – because the bank always gets paid.

We’ll have more money for new parks and recreation centers when we say NO to the banks, NO to new debt. Basic math.

Jason Bailey is the founder of Citizens for NO New Debt, an independent, nonpartisan public service campaign working to reduce government debt.

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