Again with the “interest-free” nonsense. The new middle school is going to be built with interest-free bonds funded with Federal stimulus dollars.

IF THE DISTRICT HAD USED A TRADITIONAL BOND PROGRAM TO FINANCE THE NEW SCHOOL, THE FINAL BILL WOULD HAVE BEEN ROUGHLY 41-MILLION DOLLARS, BUT WITH THE 14-MILLION DOLLARS SAVED FROM NOT PAYING INTEREST AND THE 7-MILLION DOLLARS EARNED IN INTEREST FROM THE ESCROW FUND, THE NEW MIDDLE SCHOOL WILL BE BUILT AT A COST OF 20-MILLION DOLLARS TO THE TAXPAYERS OF CHRISTIAN COUNTY.

The money being spent here doesn’t magically appear because somebody chased down a leprechaun and stole his pot of gold. The money is generated via three methods all of which are very bad for us. The first is through selling U.S. Treasuries that earn interest to the investor. We already have a crushing level of debt; we can’t afford to borrow another penny period! The second is through the printing of paper currency. The unregulated printing of paper demeans the value of all dollars in circulation. The third and final method is through direct taxation. Which will be the number one topic on April 15th.

WKDZ normally provides excellent news coverage but this story is really no better than if the station had reported unicorns flying through the streets of Hopkinsville. The concept of an interest-free loan does not stand up to any kind of smell test at all. To borrow money is never free unless someone else agrees to eat the cost of not charging interest.