Upon announcing earlier this week that Harford County government had retained its AAA bond rating, County Executive David R. Craig made a wry comment to the effect that the federal government could take a lesson from Harford County when it comes to fiscal policies.
Most years, it's pretty unusual for government bond ratings to be the stuff to lead the broadcast or be on the front pages of popular news outlets. Such reporting generally is confined to the business pages and the financial news programs. This year, however, has been different. The federal government, which backs the monetary system with its full faith and credit, saw its bond rating down-graded, thanks to an unreasonable bit of political squabbling.
This was important because a government's bond rating is akin to a family's credit rating. A good credit rating (or bond rating) means it's cheaper to borrow money, either for revolving credit card accounts and home mortgages or bond issues for major public works projects.
Just as a family can see its credit rating take a hit by doing things like paying bills late even if it has substantial financial resources, so a government can take a hit because of financial mismanagement.
Harford County's government had been relegated for many years to a second place rating in the world of bonds, largely because a substantial portion of the local economy is tied to Aberdeen Proving Ground. In recent years, a succession of county administrations has sought to diversify the county's economic base, and met with enough success to grow beyond that second tier status. Lately, the county's bond rating has been AAA, which means it qualifies for the lowest interest rates being offered by the companies that issue and sell municipal bonds. In other words, good management has allowed the county to grow beyond its junior varsity status, financially speaking.
By contrast, the federal government never has been in a position of being second string. The United States is rich in natural resources, has a strong industrial base and a vibrant, diverse and hardworking labor force. These qualities have made this country an international leader economically, militarily and culturally since the late 1800s. Given this background, the federal government should probably have something a notch or two above the highest credit rating, but for the political follies of our national leadership. From a political standpoint, both Republicans and Democrats share substantially in the blame. Both have legitimate agendas, but those agendas overlap in places. Rather than focusing on accomplishing things they agree on, they instead choose to squabble about their differences. It's as though the parents of a household had both decided it is the other's responsibility to pay the bills. As a result, our collective credit rating has taken a hit.
Harford County's good credit rating and competent fiscal management means there will be money available for several public works projects at a time when employment resulting from such projects is sorely needed.
Just think how much better off we would be as a nation if the federal government could do the same thing.