Category Archives: Debt and deficits

Arkansas’ credit can’t escape Uncle Sam’s ills

By Steve Brawner, © 2025 by Steve Brawner Communications, Inc.

Governments want good credit ratings just like individuals and businesses do. In that respect, the U.S. government is moving in the wrong direction, and Arkansas is moving in the right one – for now.

S&P Global Ratings recently raised its long-term rating on the state of Arkansas’ general obligation bonds to AA+. It’s the state’s highest rating since 1966 and the second highest on S&P’s scale after AAA.

Meanwhile, Moody’s Ratings kept the state at Aa1, also its second highest rating, and said its outlook was “stable,” meaning it doesn’t think things will change. On May 16, it wrote, “The Aa1 issuer rating reflects the state’s strong governance practices, high reserves and low leverage. The state’s proactive and conservative budget management has driven a material increase in reserve levels while lowering tax rates.”

Sounds good to me.

Gov. Sarah Huckabee Sanders touted the state’s ratings in a press release, saying they could attract potential investors. Department of Finance and Administration Secretary Jim Hudson pointed to the $1 billion Arkansas Reserve Fund. 

The news was not so good at the national level. That’s where Moody’s downgraded the federal government’s credit rating from Aaa, the highest possible, to Aa1. Continue reading →

When will we pay back all this newly borrowed money?

By Steve Brawner
© 2021 by Steve Brawner Communications, Inc.

As Congress and President Biden debate yet again how much to spend in response to the COVID-19 pandemic, one detail is missing: How are we going to pay all this borrowed money back?

Since the pandemic began, the federal government has provided $3.4 trillion in COVID-19 relief, which is equal to $10,300 for every American, according to the New York Times.

Biden has proposed another $1.9 trillion that, among other provisions, would send $1,400 to adults making $75,000 or less. This would follow the $600 checks many of us received in December. The package also includes unemployment benefits, rental assistance, money for state and local governments, and $170 billion for schools, colleges and universities.

Whatever the final amount is, Arkansas will get a piece of the pie. Its previous pieces, in fact, are why the state is running a budget surplus this year. Continue reading →

Time not on side of just-in-time nation

March 19, 2020

By Steve Brawner
© 2020 by Steve Brawner Communications, Inc.

You know how personal financial planners are always telling us to save six months of living expenses in case we face hard times?

Turns out that’s good advice for a nation as well.

No one knows what the future will hold, but a Department of Health and Human Services plan, as reported by the New York Times, anticipates an 18-month coronavirus pandemic that “could include multiple waves of illness” with “significant shortages for government, private sector, and individual U.S. consumers.” Meanwhile, Treasury Secretary Steven Mnuchin told Republican senators the unemployment rate could reach 20%.

To cushion the blow, Congress and the Trump administration are hatching plans that would exceed the bailouts of a decade ago. The number $2 trillion is being reported. Both of Arkansas’ senators, Sens. John Boozman and Tom Cotton, are willing to go big. Cotton on Jan. 30 called for a “Manhattan Project-level effort” to develop a vaccine – the Manhattan Project being the World War II effort to develop the atomic bomb. He gave a chilling speech Monday urging “extraordinary measures,” saying, “(O)ur hour of great national testing has arrived.” He’s introduced four bills that would provide money to individuals and businesses, including $1,000 checks to individuals making less than $100,000 annually plus $500 for dependents.

That would pay the mortgage. Meanwhile, utilities in Arkansas are saying they won’t shut off power and water for those who can’t pay their bills. Continue reading →

Dear 36%: We’re on the wrong track

By Steve Brawner, © 2019 by Steve Brawner Communications, Inc.

A November poll by the Financial Times and the Peter G. Peterson Foundation found 64% of likely voters believe the country is on the wrong track in managing the national debt.

Which begs the question: What could the other 36% be thinking, if they are?

The poll found that 35% say the country is strongly on the wrong track while 30% say it’s somewhat wrong, which equals 65, not 64, because of rounding. Meanwhile, 24% say it’s somewhat on the right track, while 12% say it’s strongly on the right track.

It appears my columns on this subject have failed to reach all 330 million Americans.

So for the 36% who think we’re doing just fine, here are the numbers, according to the Treasury Department’s website. Continue reading →

Be more like former UA Trustee David Pryor

By Steve Brawner
© 2019 by Steve Brawner Communications, Inc.

We should think less about which tribe political candidates belong to, or where they fall on the left-right spectrum, and more about whether they govern responsibly – like, for example, former University of Arkansas System Trustee David Pryor.

Pryor is best known for being a former governor and senator. He’s a Democrat, for what that’s worth.

This column isn’t about any of that. Instead, it was Pryor who, along with current board member Cliff Gibson, voted in 2016 against a $160 million expansion of Donald W. Reynolds Razorback Stadium to 76,412 seats, including 3,200 new premium seats for rich people. The other eight board members voted yes.

Pryor opposed the project for several reasons. He argued that the university had higher priorities and that it wasn’t the right time to expand the football stadium. A big concern was the fact that the expansion was financed largely by a $120 million bond issue, ultimately backed by the state.

“A bond issue is a debt of the University of Arkansas,” he said in 2016. “It is a debt of the people of Arkansas, and ultimately if something goes wrong, who’s responsible? And that’s the people.”

So what could go wrong? Continue reading →