{"product_id":"2940015135442","title":"Cutting up the Credit Cards: Seven Ideas to Reform the Culture of Debt","description":"Arizona’s constitutional drafters early in the 20th century were averse to public debt and to the tendency of\u003cbr\u003egovernment to use subsidies favor certain private interests. As a result, Arizona has a constitutional debt limit that limits\u003cbr\u003estate debt to $350,000—roughly $8 million in today’s dollars. But that limit is not effective at actually limiting debt.\u003cbr\u003eToday, state-level bonded indebtedness equals $13.7 billion. All levels of government in Arizona have outstanding debt\u003cbr\u003ein one form or another in the combined amount of at least $44 billion and possibly as high as $51 billion.\u003cbr\u003e\u003cbr\u003eThe courts have interpreted the debt limit to apply only to a specific type of debt: the “full, faith, and credit” debt\u003cbr\u003e(also known as “guaranteed” debt, or general obligation debt). As a result, politicians are able to commit current and\u003cbr\u003efuture taxpayers to paying off a number of debt instruments—usually called “nonguaranteed” debt—that are not\u003cbr\u003esubject to the constitutional limit and do not require voter approval.\u003cbr\u003e\u003cbr\u003eArizona ranks 25th in the nation with around $7,500 in per person debt load, above the national median of around\u003cbr\u003e$6,800. Debt-service payments were the fastest growing category in Arizona’s noncapital budget for state general expenditures\u003cbr\u003ebetween 2002 and 2009, growing by 170 percent in less than a decade. For Arizona’s local governments, debt service was\u003cbr\u003ethe fifth largest expenditure category behind spending on schools, police, electricity systems, and road maintenance. In\u003cbr\u003eArizona, roughly 23 percent of all state and local debts are for projects that primarily benefit private interests.\u003cbr\u003e\u003cbr\u003eArizona policymakers need to pay down debt and all future debt should be forced under a strict cap. After giving the\u003cbr\u003estate a reasonable period of time to pay off existing debt, a new debt cap of no more than 6 percent of net assessed value\u003cbr\u003eof private property in a state would limit all future debt. The same sort of cap should apply to cities and counties as well.\u003cbr\u003e\u003cbr\u003eAdditional reforms to get debt under control include:\u003cbr\u003e·· Require voter approval of all debt at the local level.\u003cbr\u003e·· Forbid issuance of government-grade, tax-exempt bonds by non-elected bodies.\u003cbr\u003e·· Require that the maturity schedule of a bond be equal to or shorter than the life of the asset being purchased\u003cbr\u003eor financed with the bond.\u003cbr\u003e·· Require transparency of all state and local debt.\u003cbr\u003e·· Encourage municipalities to save for future projects that can be paid for with cash instead of debt.\u003cbr\u003e\u003cbr\u003eArizona can reclaim its historic title as a state forged in the understanding that excessive public debt can trap\u003cbr\u003efuture generations. Overcoming the political culture of debt may take some time, but it is possible, and present and\u003cbr\u003efuture taxpayers will benefit both fiscally and economically.","brand":"Goldwater Institute","offers":[{"title":"Default Title","offer_id":47080575664368,"sku":"2940015135442","price":0.99,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0737\/7593\/9824\/files\/2940015135442_p0.jpg?v=1763619487","url":"https:\/\/shop-qa.barnesandnoble.com\/products\/2940015135442","provider":"Barnes \u0026 Noble (DEV)","version":"1.0","type":"link"}