Economics And The Board Of Education

To the Editor:

School board member Tom Gissen, in last week’s Newtown Bee, was quoted as saying, “without school improvements, taxpayers could lose tens of millions of dollars in value from their homes.” The skyrocketing rise in home values nationwide during the past several years is due to low interest rates and federal tax cuts in combination with innovative (reckless?) mortgages offered by lending institutions allowing people to buy houses beyond their means with little or no down payment. The rise and fall in home values has little or nothing to do with the Newtown school system.

This year, there has been more deficit spending with an increasingly negative trade account balance. During the last three months, Americans have had a negative savings rate. We are borrowing money from foreign nations and using as collateral the overinflated value of our homes. If foreign governments lose their appetites for US Treasuries, interest rates will rise and home values will immediately begin to fall regardless of the infrastructure of the Newtown school system.

Herb Rosenthal has consistently called for fiscal responsibility, but this has gone largely unheeded by many, especially the Board of Education, as taxes and debt continue to rise at an alarming rate. We are writing checks we cannot cash and should the ten-year note continue to rise, many are going to have trouble making the payments on their leased cars, variable rate mortgages, property taxes, and credit card debt, not to mention college costs and did I mention “retirement?”  I think the Board of Education needs a refresher course in economics. 

Sincerely,

Mark Dennen

Old Green Road, Sandy Hook                                  November 2, 2005