A TIME WHEN WE WOULD SAY - WE CAN’T AFFORD IT! WIPE THE TEARS AWAY AND STEP-UP THE FUNDRAISING - OR AGREE TO WAIT UNTIL WE HAVE MONEY

Very few people, these days, seem to worry about the burden of debt. The “live-for-the-moment” era has put so many folks in economically vulnerable situations. The credit they’ve received from lenders, and credit card issuers, has, for many customers, been irresponsible and entirely reckless. We look at the United States and the credit crunch there, and heave a sigh of relief that Canadian banks have never acted in this fashion......to give money to those who are at high risk of not being able to pay back what they owe. BUT! It’s also the fact that many borrowers are simply not admitting all the debt they have, or revealing the suspected insecurities of their employment, when applying for lines of credit, car loans and mortgages. They take out mortgages without really understanding all the implications, and the risk they’re assuming. Today, paying off the mortgage is something beyond reach anyway.....so most just consider it renting from the lending institution......and exercise their credit cards to buy themselves frills. Frills that, by the way, devaluate faster that they’ll ever be paid off.

The kicker here, is that real estate values drop periodically. If you’ve borrowed on the froth of an over-heated market valuation, then you most certainly don’t want to hear about any bursting of the bubble. Real estate can’t continue its ridiculous climb. Wage increases and employment doesn’t warrant the valuations, and sooner or later, there will have to be a settling period. Young people are getting priced out of the market, and first time home buyers have been a huge reason behind the most recent market surge. Still there is an urge to buy what we can’t afford, and deal with the consequences at a later date. I’ve been up close and personal to that “later date,” and let me tell you.....it’s a bastard!

I’ve lived it folks, so I’m pretty much an expert on the pitfalls of being over-extended. My boys have grown-up appreciating what the fluctuations of the economy can do to those who don’t pay attention to debt management. Suzanne and I got caught up in the house-flip bonanza of the late 1980's and early 1990's. We had sold two houses and were about to sell the third, when the recession hit like a real estate tsunami. To get the house prepared for re-sale, we spent quite a bit of money re-decorating and sprucing up the grounds. At the same time, I went from having four means of income down to one in a matter of months, due to recessionary fears and downsizing. Suzanne was in a car accident.....not her fault, and the automobile that should have been written-off wasn’t, and we had to live with a car that developed every expensive problem there-after. It cost us a fortune but we still had a car loan, and no dealership on earth wanted an accident-car.

We had our antique business as a remnant, and I’ve got to tell you, it was the most stressful period of our lives. Two kids, a huge mortgage, car loan, credit card debt and a wonky car and both workplaces ten miles down the road. The most common site on the roadways of Muskoka, back then, was our red Oldsmobile on the side of the road.....and the driver smacking his head repeatedly on the steering wheel. The real horror for us, was that, for about five years, we lived in fear of the very next tag on the front door when we got home after work. We had all the colors of the rainbow in “last notice” warnings. We had grave concerns about our ability to hang onto our house, which had devalued to about $120,000 from the $140,000 or so we had paid only a few years earlier. Our grace here, was that we had put twenty-five percent of the purchase price as a down-payment. If not, I’m pretty sure the bank would have asked for a re-assessment. If that had been the case, it would have been a walk-away situation without question. We didn’t have a prayer of paying any more as downpayment. From the real estate gambler to the pauper in such a short span of time. There were thousands upon thousands of folks in similar situations. Many did lose their homes. One of the ways I made money, with some tragic irony, was operating our antique shop, selling off consignment collectibles, from folks who were struggling to make ends meet......and those who had lost their homes but had a few pieces of furniture to sell for travelling money. It was a sad yet remarkable period. A learning curve that stretched for miles and years. There were a lot of grasping-at-anything folks back then, and it kept us in the black throughout this period. I went from having a small inventory and no money to re-purchase, to having an over-flowing inventory of great stuff, that belonged to some really stressed-out people. We had buyers and they got money. I guess we helped one another through some dark days.

This may seem like a convoluted way to enter a discussion about municipal over-spending and government debt-load. I got thinking about it over the Easter weekend. I reminisce frequently, as important lessons learned, how we nearly experienced financial calamity, because we forgot some very simple fiscal rules and realities. We had some lean holiday weekends, let me tell you, and none of it was the result of anyone else having influenced us.....to do stupid things. We just got cocky. So much so, that we forgot all about who and what was controlling the world economy. And it wasn’t us. I imagine there are many millions of Americans feeling the same way. Of course it was too good to be true. Fantasy is compelling.

When we feel empowered, sometimes it’s a positive, but it can be a negative, and an expensive one. Municipalities in our region have definitely felt empowered, and have thought less about the negative potential of their actions. I see in them a recklessness to enter extreme debt, abandoning sage advisories from those who understand risk management.....who appreciate the need for frugality and rainy-day funds.

Back in the old days.....not ancient, but more recent history, citizens got the idea for something in their community, and held meetings to determine the level of support. What that support meant, ranged from volunteer representation on a committee overseeing the project, being ready to pitch-in as a builder, painter, interior decorator, roofer, or landscaper. It could mean manning fundraising booths at special events throughout the year. It meant a huge commitment of time and patience, drumming up donations to help offset costs. Although it didn’t mean money wouldn’t have to be borrowed, to get the project started, it was a manageable amount to repay.....and there was a strict schedule on how this was to be done. We are reading a lot about large, outstanding amounts left for fundraisers, in Muskoka generally, and the inability to meet pay-back obligations they took on, to forward the project. This didn’t happen a while back. The citizens wouldn’t allow a debt to remain unpaid.

Today we are too quick to borrow large sums of money, with very little conscience about how the hell it will ever be paid back. Oh, there might be a benefactor or a substantial bequeath from an estate. Or on the other hand, maybe there will be a lingering recession, and many folks will stop donating, in order to offset their own household debt instead. We borrow money as impulse, when in fact, we should insist on targets, like in my day, when we didn’t go begging without cash and commitment to match our enthusiasm. It is the reason we have recreation centres and arenas. Further back in time, it was even more weighted on the good-hearted generosity of the citizens, with less dependance on town hall to fund everything, all of the time. As one of the founders of the Herald-Gazette Rink Rat Hockey Club, and the still operating “Loveable Losers Hockey Tournament,” in Bracebridge, we helped raise money to buy the town a new ice-resurfacer. We were always helping out the community in this fashion.....if we didn’t like the way something was operating, we offered to contribute by holding a fundraiser. Of course the town kicked in money, as it should have, but many groups were quick to help their hometown acquire better equipment and facilities. It doesn’t matter what town it is.....the same goes on today. There are many generous folks and groups doing yeoman’s work helping us achieve goals.

The difference is, it might require a much greater commitment, for us to be able to save our communities now, some in nose-bleed level of prolonged debt. It’s bring fundraising to a whole new level. Yet when you add up the collateral damage of interest being charged on the debt....folks, this isn’t a good thing at all. We’d rather have the interest-money to use for other upgrades.

The citizens have stood back and watched, and read about, the over-spending of our own town council, here in Gravenhurst, for quite a few years now. Some of us have complained silently, or in bull sessions on various street corners or in coffee shops, without any organized attempt to protest our increasing debt-load. The still youthful Ratepayers Association had as its origin, this building dissatisfaction with the town’s free-wheeling and tax burdening. Yet even when the town was clearly aware citizens were deeply concerned, and angry about tax increases and borrowing extravagances, there seemed to be very fleeting regard for what we believed was sensible proportion. Unnecessarily nervous, is what councillors thought of us! We were just overly cautious folks. Not really in touch with the new age of borrow, borrow, and borrow! The accounting predictions might suggest we’re in pretty good shape despite all the doom-saying. Well, I for one don’t feel any compulsion to abandon my gut instincts.....earned by experience and so many years of trial and error, and......these instincts now tell me we’re in too much debt for our own good. Look at us provincially, nationally, globally! While the speculators continue to draw us in, with promises of better times coming, I think it’s time to fall back on that old standard.......of how much coin is jingling in your pockets.....and it’s what you’ve got to work with.

Over the next four years, the Town of Gravenhurst will be forced to wrestle with massive debt-load.......just as District Government needs to address crisis. Taxpayers generally, in this region, can not afford to carry the burden we have now. Businesses are closing. Jobs are disappearing. And clients for social assistance aren’t dwindling. Food bank visitors are increasing annually. As local government, sitting in their new town hall.....which we couldn’t afford, contemplates the new realities of over-spending......and what they may wish to finance in the future......they must familiarize themselves with the people they represent. They must take a few moments to talk to the Salvation Army about the critical importance of the food bank to many citizens of our community......and understand how many amongst us, are in financial crisis......and accept it as part of the new protocol of awareness they have clearly over-looked in the past two council terms.

We have a chance to put hometown values first. If the town continues to operate as it has, we will suffer greatly in the future. The world economy is in dire straights.....and it is not the time to be facing the massive debt we have been burdened with in this town, this region and this country. As individuals who got caught up in a recession once, and suffered greatly yet survived, there’s nothing as destructive to family, health and home, as the misery of poverty. We deserved our dance with fiscal disaster. Some get pulled in without having made a financial mistake. Others are carrying on the burdens of generations, not being able to escape their fetters. Maybe we are a small percentage of the population. I’m willing to bet, the percentage is rising. This may soon be reflected by more folks not being able to pay their taxes. Or buy groceries.

There is every reason now, not only cutting projects and dumping the tax burden onto property owners, to smarten up about the true costs of debt carrying......at a time of still-low interest rates. They will change. And so will our complexion trying to cope with it all!