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As stimulus dollars flow, will we learn any financial lessons?

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By The Staff

Perry County stands to gain hundreds of thousands - perhaps  even millions - of dollars in federal stimulus spending. That's good news. We welcome needed local investments in roads, streets, sewers and other infrastructure projects that will help our community prosper in the future.

What shouldn't be forgotten, however, as all the recovery money begins flowing, are the mistakes that got us into this mess. Let's hope the economic recovery everyone hopes for includes reforms in personal responsibility. Those lessons need to be learned at every level of decision-making, from Wall Street boardrooms to our own kitchen tables.

First, the positive. Word came late last week that the Tell City Housing Authority will receive $318,829 in federal funds, money that will be put to good use helping residents at Twilight Towers.

An omnibus bill that passed the U.S. House of Representatives last week includes money for the Perry County Port Authority and Lincoln Hills Development Corp. That bill is now before U.S. senators, who could make changes.

Local leaders, eyeing help in paying for costly investments, have presented lists of hoped-for projects. Tell City would like help in paying for an $11 million project to control its combined sanitary-storm sewers and a pump station that could reduce flooding during periods of heavy rain, such as Friday's deluge. County leaders are also proposing projects but haven't been quite as public about their projects. Cannelton leaders, too, have proposed ideas for projects in that city.

Money spent on important infrastructure projects that will help keep Perry Countians working makes sense, but amid the surge in federal spending, we would like to see responsible aid to help families stay on their feet, especially those now out of work, or who can't pay for insurance coverage for their children. Also encouraging to us are plans to help families stay in their homes, especially those who have been paying their mortgages on time, but who are at risk of defaulting due to job losses or mortgages resetting at higher rates.  

We have reservations about the government forcing banks to lower principal balances for those who owe more than their homes are worth. That punishes those of us who have been paying our mortgages on time.  

Our enthusiasm for federal spending is also tempered, however, by growing deficits. The more than $1 trillion being spent over the next couple of years is swelling a budget deficit that will have to be repaid by our children and grandchildren.

President Obama wants to cut the budget deficit dramatically in his first term, but we wonder how that can happen when the recession shows no real signs of reaching its bottom and wars in Iraq and Afghanistan continue to demand billions of dollars of our money.

Our biggest fear is that once the recession lifts, too many Americans will repeat the mistakes that have hurt our economy: spending too much, saving far too little and overextending ourselves.

There's plenty of blame to go around for the economic mess we're in: bank CEOs who put billions of other people's money at risk by betting everything on the assumption home prices would keep rising forever. Government leaders should have provided more supervision but some of the fault lies with those who wanted things they couldn't afford.

We remember seeing ads for home loans requiring little or no down payment or - even worse - lenders willing to loan more money than the home was even worth or loans in which people paid only the interest on loans.

The result: loans were made to people without the means or financial discipline to repay them. That's hurt home values for everyone.

Polls show the vast majority of Americans want Obama's plan to succeed. We have no doubt the United States will emerge from the financial gloom we seem so stuck in. Our hope is that Americans, Perry Countians included, accept federal spending with the understanding that it's going to have to be repaid and the expectation that more of us need to be responsible for making better financial decisions in the future. If not, Uncle Sam may not have the means to battle the next economic downturn and a future recession may become, as this one is beginning to be described, as America's second Great Depression.

Our view: Editorials reflect the opinions of the newspaper.

Your view: Tell us what you think. E-mail us at editor@perrycountynews.com or mail your comments to P.O. Box 309, Tell City, IN 47586.