Start Self liquidating debt

Self liquidating debt

Everyone knows Federal debt has skyrocketed, but so has the debt of state and local governments: state and local government debt has risen by 250% just since 2002.

(August 5, 2014) Paying for unproductive friction with borrowed money has generated the illusion that free to me is actually free--it isn't.

We all understand how friction slows our progress: flatten the tires on a bicycle and it becomes much harder to maintain speed.

La Confrence gnrale a galement autoris l'avance de sommes ne dpassant aucun moment 500.000 dollars en vue de financer les dpenses recouvrables, y compris celles qui concernent les fonds de dpt et les comptes spciaux, condition que les sommes ainsi avances soient rembourses ds que possible.

(c) Such sums as may be necessary to continue the revolving fund to finance miscellaneous self-liquidating purchases and activities which, together with net sums outstanding for the same purpose, do not exceed 200,000 dollars; advances in excess of 200,000 dollars may be made with the prior concurrence of the Advisory Committee on Administrative and Budgetary Questions c) Les sommes qui pourront tre ncessaires pour continuer d'alimenter le fonds d'avances remboursables destin financer divers achats et oprations autoamortissables, tant entendu que, jointes aux montants nets avancs pour le mme objet, elles ne pourront dpasser 200 000 dollars mais que des avances en sus de ce total pourront tre accordes avec l'assentiment pralable du Comit consultatif pour les questions administratives et budgtaires The Working Capital Fund (WCF) is set up to provide finance for budgetary appropriations pending the receipt of contributions and to provide finance for self-liquidating expenditures, including those arising in connection with trust funds and special accounts, with limits determined by the General Conference.

It's also generated the illusion that piling up debt is risk-free as long as interest rates are low and the government backstops all the debt.

The final illusion is that there is no mechanism to brake the expansion of debt: that the "solution" to rising interest costs is to borrow more money.

These structures are best suited for situations involving both strong investment grade credits and very favorable real estate characteristics.

They are designed to provide you with optimal execution, including enhanced leverage, enhanced cash flow and tax risk mitigation strategies.

If a brake pad is rubbing against one wheel, it gets even harder.

If we pile on additional sources of friction, eventually forward motion stops. Weapons systems that cost four times as much as the system they replace while being less effective and more costly to maintain/repair.

In effect, we've paid for all this systemic friction by borrowing vast sums of money--money that has been squandered paying for unproductive friction under the guise of "investing in education, healthcare and national defense." But since there is no systemic mechanism for discovering the price of this friction or disciplining unproductive spending on friction, there is no structural restraint on this Status Quo "solution" other than the debt itself.