Credit where credit is due

In the next 1,000 words, I’m going to try to convince you that America’s addiction to easy credit—especially in the form of aggressively-marketed credit cards—is directly responsible for the Sparks electorate’s failure in June to pass a modest tax override that would have provided essential funding for a new fire station and additional firefighters in a growing area of their city.

I realize that’s a tall order, but I think I can pull it off, so I ask that you bear with me until the end. Please don’t turn to the Spicy Personals just yet.

Some 55 percent of Sparks voters defeated a ballot measure this summer that would have cost most of them little or nothing, and would have cost a few of them something like 30 bucks annually. The additional tax revenue would have funded a new fire station and several new firefighters for the city. The thing is, despite the ballot measure’s failure, the fire station is going to be built anyway because it has to be; additional firefighters are probably going to be hired as well.

What the tax override would have done is raise new money to pay for them, rather than siphoning money away from existing city services. Amazingly, though, many voters didn’t seem to think their fiscal choices were really limited to those two scenarios. As one resident, who was quoted in a June 4 story in the Reno Gazette-Journal, put it, “Most people were just sick and tired of paying higher taxes. They were shoving it down our throats without really looking into it. There were other ways to finance those firemen [than] by just putting it on the ballot and saying ‘Either you pass it or we’re going to cut your services.’ I think a lot of people resented that.”

At the risk of making my fellow Sparks residents feel resentful, I’d like to offer a quick lesson in basic municipal economics. Given a relatively fixed pool of funding (current tax revenues) that is fully engaged in supporting a given set of city services, you can’t add to those services without either increasing taxes or taking away from existing services. It’s just like balancing your own budget: if you upgrade your cable service and add the increased cost to your monthly expenses before you get a raise, you’re going to have to spend less on something else in your budget if you want it to balance at the end of the month.

Herein lies the issue and the part you’ve all been waiting for. This is where I try to prove that America’s romance with the credit card has led directly to the rejection of a perfectly reasonable (and arguably necessary) tax override in Sparks. Ready? OK, here goes:

One of the beautiful and insidious things about credit cards is that they actually eliminate the necessity of balancing your personal budget. Easy credit—and believe me, getting credit cards has never been easier, whatever your bank balance or credit history—allows us to pretend that we have money when we don’t. Suppose you have $50 in your checking account and nothing in savings, and your car suddenly breaks down in the middle of McCarran Boulevard. You need a tow, you need a repair, and you need them now—without the car, you can’t get to work. The problem is that you have no money. But luckily, you have a credit card. This means your lack of money is not a brick wall against which you have to bang your head; rather, it’s a permeable barrier through which a helpful lending agency will usher you, with minimal effort on your part and at a modest 11 or 12 percent annual interest rate.

I picked the broken-down-car analogy on purpose. No one, myself included, would argue that using your credit card to cover an emergency car repair is an unwise use of credit. But all actions, even legitimate and justifiable ones, have consequences, and when you use a credit card to pretend you have money when you do not, one consequence is that you start to lose your hold on fiscal reality and cross over into a sort of fiscal dream world.

It’s kind of intoxicating, really, kind of like learning to smoke—once you get over your initial resistance to the idea of accruing high-interest debt, that $3,000 credit limit suddenly looks less like fiscal quicksand and more like money in the bank. “I’ve got to get my car fixed” eventually becomes “Why should I cook tonight? I’m tired, and there’s still $2,000 left on my Visa.” A barrier that used to be solid (your bank account balance) has become elastic, and before you know it, you’re thinking in terms of what you deserve instead of what you can afford.

I know I sound like a self-righteous jerk here. Why should I make a big deal out of other people’s debt habits? As long as I’m keeping myself on sound financial footing, why can’t I just live and let live?

The problem is that I’d kind of like to have a sufficiently-funded fire department. The more we all get used to buying stuff without money—the more we come to think of money as something other than a zero-sum resource—the more "resentful" we’re going to be when our city and state governments refuse to do the same. And refuse they will, because they’re prohibited by statute from spending money they don’t have. They have to balance their budgets, and that means that, for them, the barrier of depleted funds is an actual, solid one, not a theoretical, elastic one. We can stamp our feet and cry about it all we want, but when we decide we’re serious about having more firefighters, we’re going to have to pay for them. Telling the city to "really look into it" and find something other than money to pay them with is not going to work.