Editorial: Borrow wisely

POSTED: 07/11/11 1:06 PM

It is not difficult to understand that anyone who is handed a credit limit of let’s say 119 million guilders would be the equivalent of the proverbial child in a candy shop who’s told they can have all the candy they like up to a maximum. But like a loving parent, who warns their child of the danger of diabetes and cavities caused by sweets, we – the tax payer – caution those who have just been handed that enormous credit limit that they must set priorities.

Like the loving parent we understand the desire to run through the store quickly, grab your favorite sweets and some that you’d just like to try and then head for the cashier. Like that loving parent we’ll dutifully pay so you can have the candy and we’ll even offer to store some up for you, so you can enjoy it over time.

The fact is that while we can admit that the candy will give some joy to both parent and child, we believe that getting carried away endangers both parties. Because today it’s this bit of candy and tomorrow the demand might be bigger.

Outside of the analogy though one will realize that the wisdom of borrowing all that money now is not a good idea as some of the projects may not necessarily need to happen now. Therefore it is with clear minds that those who’ve been handed the 119 million guilder credit prioritize those things that need to be finished the soonest and will lead to some savings. Holding off borrowing now, and generating some savings may also open up some bigger borrowing possibilities later that will allow for the really huge projects we need to take place.

Back in the analogy; all the parent – the tax payer – is asking for is a little prudence and that there is some wisdom to the borrowing.

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