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Home Page  News and Society Economics “neither a Borrower Nor a Lender Be.” |
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“neither a Borrower Nor a Lender Be.”
In Shakespeare’s play, Hamlet, Polonius counsels his hotheaded son, Laertes: “Neither a borrow nor a lender be, for loan oft loses both itself and friend, And borrowing dulls the edge of husbandry.” (In this context, “husbandry” means careful or thrifty management; frugality, or thrift.)
It’s interesting to note that “in the days when Hamlet was first staged (around 1600) borrowing was epidemic among the gentry, who sometimes neglected husbandry to the point where they were selling off their estates piece by piece to maintain an ostentatious lifestyle in London.” (Shakespeare Quotes, enotes.com).
So, here we are, over 400 years later, dealing with the same issue here in America, that is, excessive borrowing. When it comes to husbandry, it’s pretty obvious that little has changed. We have a profligate government and a spendthrift society, with growing numbers of people, businesses and government entities going broke.
Several recent articles illustrate the situation:
A Wall Street Journal article about the state of New Jersey noted, “In 1990 the state was $3 billion in debt. Borrowing has since grown at a compound annual rate of about 13%, and now the state is $32 billion in the red. Throw in unfunded pensions and health benefits for retirees, and that number swells to $113 billion, or $3,400 for every man, woman and child in the state. That’s three times per capita higher than the national average, making New Jersey the nation’s fourth-most indebted state.” (Wall Street Journal, February 23, 2008, page A8)
In California, during a Senate Floor debate on the day the state budget was sent to the governor (August 27, 2007), State Senator Tom McClintock said, “Today we set in motion events that will require far more difficult and painful decisions starting just five months from now in what is likely to be a much worse economy. I am afraid that with this vote, for the second time in a decade, this state is being driven to another Gray Davis-sized fiscal crisis that this vote makes inevitable for exactly the same reasons: Lack of restraint in good times combined with a lack of discipline in bad times.” (NOTE: California’s proposed 2008-09 fiscal year budget was recently reported to be $16 billion in the red.)
On the local level, the City of Vallejo, California, is on the verge of filing bankruptcy, the first city in the state’s history to do so. The City of San Diego is has approximately $1.9 billion in unfunded liability for its employee pension plan; Santa Barbara County has an estimated $200 million unfunded obligation for its employee retirement program; and the cities of Santa Barbara and Solvang have both been reported to be using reserves to pay current operating costs.
Commenting on federal debt, Terrence Jeffrey observed, “Thanks to the compounded negligence of four successive generations of politicians in Washington, D.C., however, every family in America is now on the hook for $455,000 over and above what they owe on their own mortgage, or student loans, or credit cards or can expect to pay in taxes under the current tax system.” (“Your generous $455,000 loan to Uncle Sam,” Conservative Chronicle, February 7, 2008).
The proposed 2008-09 federal budget of approximately $3 trillion amounts to around ten-thousand dollars for every man, woman and child in America, 300 million strong. In addition to the annual budgets that presumably are funded with the money the federal government extracts from taxpayers, there is also the nation’s little recognized obligation of some $9 trillion dollars that our esteemed political leaders have incurred without voters’ consent.
David M. Walker, Controller General of the United States, has been speaking around the country for over two years, delivering the message that the U.S. is rapidly going bankrupt. He believes we have only about 10 years before that happens. But, even with the nation’s chief accountant openly warning everyone who will listen, no one is paying attention.
Mr. Walker is not some “Chicken Little” crying, “The sky is falling,” he’s the real deal, perhaps the most qualified person in America, telling it like it is. As “the nation’s chief accountability officer and head of the U.S. Government Accountability Office (GAO),” his mission is to help “… improve the performance and assure the accountability of the federal government for the benefit of the American people.” (Wikipedia)
Everywhere we look throughout the nation, we see people, businesses and government entities that are upside down financially, seemingly with no way out other than bankruptcy. But, so far, that doesn’t seem to be slowing anyone down, individuals and politicians alike, in their race to the poorhouse.
What happens when we get there, you may wonder?
It won’t be pretty.
© 2008 Harris R. Sherline, All Rights Reserved
NOTE: Read more of Harris Sherline’s commentaries on his blog at “opinionfest.com.”
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Article Tags: Debt, Borrowing, Hamlet, Shakespeare, Wall Street Journal, Gao, Husbandry, Tom Mcclintock, Gray Davis, Vallejo, Santa Barbara County, Federal Debt, Terrence Jeffrey, Conservative Chronicle, David M. Walker, Controller General Article Source: http://www.articlesbase.com/economics-articles/neither-a-borrower-nor-a-lender-be-434704.html About the Author:
Harris Sherline is a retired Certified Public Accountant and executive. His diverse business background includes experience as a partner in a public accounting firm, as a principal in a number of business ventures and as CEO of a hospital. His conservative commentaries appear weekly in two Santa Barbara newspapers. In addition, his op-ed articles currently appear regularly on three widely read web sites and his own weblog,
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