Thursday, September 28, 2006

Beebe Makes The Big Mistake

As a young Ensign in the Navy I made the case to my instructor that my answers on an essay question deserved more points than he had given. He looked my answers over closely. "Well, you didn't make the "big mistake". By that I mean the kind that sends up a red flag that you really don't know what you are talking about."

"For example" he amplified, "If I had asked you a question about the civil war and you had said something about Robert E. Lee fighting on the side of the Union, that would be a clear sign that you really don't get it."

In the end, I earned a few more points. After all, I avoided the "big mistake" that would have showed that I lacked a fundamental grasp of the issues involved.

Attorney General Mike Beebe has made the "big mistake" on bonds. A mistake that shows he really lacks a fundamental grasp of what he is talking about.

(continued- click THURSDAY below and scroll down for rest of article, or if sent straight here just scroll down)


Blogger Mark Moore (Moderator) said...

Beebe has been quoted as saying he wants to apply $250-300 million from the surplus to Arkansas' bond debt. This is one reason he gives for delaying a tax cut, like on groceries for example.

Beebe has argued that paying off the bonds early frees up the money we'd otherwise use on monthly payments.

Bzzzt! Wrong answer. As the ArkFam blog notes, "The trouble is that unlike credit cards whose interest charges stop when the balance is paid, with bonds the state is obligated to pay all of the interest that would accumulate over the life of the note, even if its paid off early.

See, Beebe's plan wouldn't save the state a dime, as the interest charges are the same whether the bonds are paid now or carried to term. Beebe's plan actually would be a huge windfall for the bond-daddies."

Many have asked, including ArkFam, if Beebe is for or against the new higher ed bond issue. He was all for it last December, but what kind of sense does it make to pay off a loan with interest early when you could use that same money to avoid taking out a new loan that would have more interest charges tacked on?

Indeed, what kind of sense does it make to pay off a bond early if you are already obligated to pay interest charges whether you keep the money for the full length of time or not?

Some of you hard eyed business types who don't care about social issues and only want someone who is good at making business decisions better take note. Beebe has made the Big Mistake that shows he does not know what he is talking about. Either that, or he has so many markers out to so many people= like whoever is going to be running the money on the escrow account that the college bonds will set up, that he is forced into decisions he knows are irrational.

Either way, forget the killing babies and stuff, this ought to bother you.

2:20 PM, September 29, 2006  

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