Mortgaging the future

I think most taxpayers, certainly all homeowners know how a mortgage works. You get money from the bank which you use to buy a house. The security for the money you borrowed is the house itself. The idea is that in thirty years or less, you have paid off the debt you owe, with interest, but the house is worth more so you come out ahead on the deal. On the other hand, if you don't make the payments, the bank takes your house away.

Well, your state legislature "took out a mortgage" last week. We borrowed $410 million from the bank to cover our obligations for this year and "balance" the budget. We will use tobacco settlement dollars to pay it back. It will take us twenty years at about $45 million per year to pay off the bank. That means we start each year with a budget hole. Great deal, eh? Oh yeah, there is the problem of what we put up for security. I guess we will just let our kids and grandchildren pick up the tab.

By the way, the word mortgage come from the Old French, it means "dead pledge."