Delusional + disingenuous + disinformation = disgraceful + disaster

This has been my reaction to the both the Senate President’s latest interview on the NMIRF’s imminent bankruptcy and Precinct 3 legislator Heinz Hofschneider’s proposed bill to induce senior government employees to take a buy-out to reduce the government payroll by just a possible 300 and seek a $250 million obligation bond for the Fund to remedy a minor part of the Fund’s total indebtedness.

These two have about 40 years of legislative experience between them and this is what we get? Eleven months to the next election. Some legislators are stirring from their slumber and shouting “havoc” and “raise taxes.” But this is just continuing to rearrange the Titanic’s deck chairs on its ever steepening deck as our governor conducts the ship’s orchestra in a soothing melody for the panicked residents. But the chair action and the orchestra is an effort to mask the looming reality of the inevitable fate in the frigid waters that awaits those not fortunate enough to be in or have a reserved seat in a CNMI government lifeboat.

Should we presume they have checked the CNMI’s current bond rating with Standard & Poor for a revenue bond based on government income? Or even the current fund managers?

My economic experience is very limited but I know these ratings are made on the basis of sustained fiscal and operational performance. And in today’s tight, tight credit market where even credit for cars/trucks is harder to come by…well, perhaps they might factor in our not having had a coup d’etat. And the PSS bond for school building was paid off recently and on time.

The revenue bond market lenders, however, don’t do kind little things for the lendees as the federal government has recently done for Freddie Mac, Fanny Mae, the major banks or the GM/Chyrsler loans bailout. When the potential market lenders are told the bond is to pay off NMIRF arrears, when they parse through the fiscal status of the government, then review its tax generating operations of the recent past and gauge its future revenue generating capability, they will give a simple but polite “No.” It comes, as I understand, in the form of a rating designated by a letter of the alphabet followed by a plus or minus sign.

GovGuam was elated recently after having received news from their brokerage to the effect that their bond rating went “up” from a BB+ to a BBB-. This can lower the interest rate charged for a future bond and represents interest savings.

With a bond market rejection within two months, there will be nine more to go before the election. What could be the next delaying step by these two legislators (if it must be another legislative attempt to fix the CNMI): try the junk bond market? These are the very “high risk” bond shopper category. Remember the Millikin story of the past decade or so?

I do sincerely admire Bill Stewart who has continued to be polite to a fault with his advice over the years to our self-styled experts, and, of course, he continues to be dismissed as some old Trust Territory coot still wandering around the Capital Hill offices at night with a candle.

I remember what a very wise, old Palauan women from the TT days once told me about our formative island government as we sat listening to the inaugural address of Carlos I: “You must not throw the jewels in front of the pigs when it is their feeding time.” Her studied opinion, of course, but we did go through more than a decade of “jewels” and we ate them all without knowing and preserving any of their real value.