I’ll gladly pay you Tuesday for a hamburger today.
Who coined that famous phrase? It was J. Wellington Wimpy, the intellectual hobo in the classic Depression era comic strip Popeye. Wimpy loved to consume hamburgers, but he was perpetually short of funds, and so he would incur debts (in exchange for meals) that would never be repaid.
Oddly enough, Wimpy was always a well dressed hobo. He often wore a blue suit, white shirt, and red tie, with brown leather shoes on his feet and a sturdy hat on his head. Although the authors of the strip never explicitly identified his original profession, his name and attire served as an effective parody of the banking industry.
After all, a well dressed man like Wimpy likely could have financed his own meals; the fact that he chose to borrow from others was simply a matter of priorities. And though his comic strip peaked in popularity during the 1930s, his strategy of debt financed consumption survives to the current day.
Desperately Seeking Shovels
Consider, for instance, the operating practices of the state of Connecticut. Last week, the Land of Steady Habits was buried in a blizzard. The city of Hamden led the region with 40 inches of snow fall, and the metropolis of Milford was right behind it with 38 inches.
Regrettably, for the residents of Milford, its municipal leaders had not invested in sufficient snow removal equipment to clear the roads on a timely basis. Thus, its citizens were stranded in their homes for days after the storm. Mayor Ben Blake was eventually forced to hire sixteen payloader vehicles from privately owned construction firms to free his own town residents.
So what is the town doing now? Is it establishing a fund to purchase additional snow removal equipment? Well, no … priorities being priorities, the city has issued a call for brigades of citizen volunteers to carry their own shovels to the next calamitous blizzard.
And what are the tax expenditure priorities of the State of Connecticut? If not directed towards snow removal, where are the funds being spent?
$2 Billion And Counting …
Connecticut Governor Dan Malloy answered that question last month with the unveiling of a new investment initiative entitled Next Generation Connecticut. Originally introduced as a $1.5 billion series of investments in the academic programs of the University of Connecticut, the total tab for the initiative was revalued at more than $2.0 billion after its full scope was released to the public.
Ironically, State House Republican leader Larry Cafero predicts that $2.0 billion will also represent the size of the government’s annual budget deficit during the next two years. “We’ve got other problems, too,” protested Cafero when he learned about the initiative. “We have roads, we have bridges.”
Of course, they also have snow. Lots of snow. And an insufficient number of snow removal vehicles to clear it all away. That’s why Mayor Blake issued his call for a volunteer snow shovel brigade.
Investments vs. Expenditures
The Governor characterizes the Next Generation initiative as an investment in the future of the state, and not as a series of expenditures. The bioscience, digital media, and engineering programs at the University are all expected to receive significant funding increases.
The initiative is also expected to increase the size of the student body at the institution. The University’s total enrollment is expected to grow by 30%, or by 6,580 students, with many joining an expanding engineering program.
Other university systems, of course, are choosing far less expensive paths to growth. The university systems of Florida and Texas, for instance, are each focusing on the development of a $10,000 undergraduate degree, one partially based on online education technologies. And university systems from California to North Carolina to Pennsylvania are beginning to embrace the free or extremely low cost offerings of online-only courses that are offered by organizations like Coursera.
Unlike its rivals, the University of Connecticut will be growing in a more traditional manner. And if the institution manages to generate long term economic benefits in excess of $2 billion, it may yet demonstrate that it is the beneficiary of the wiser investment strategy.
Nevertheless, even if the Nutmeg State’s initiative eventually generates a positive return on investment, its strategy will maintain a decidedly Wimpy perspective. That’s “Wimpy” as in “J. Wellington Wimpy,” of course.
After all, Wimpy managed to acquire stylish clothing and to satisfy his taste for hamburgers simultaneously. But he needed to become a debtor to do so, and he never actually paid his debts.
Likewise, the state of Connecticut is managing to build its university system and to (eventually) clear its roads of snow. But it is borrowing billions of dollars to finance its operating activities, and for the sake of the Next Generation initiative, it is about to go even deeper in debt.
Will Connecticut be able to pay its debts, or will it eventually renege on them like Wimpy? The fate of the state hinges on this question, and only time will yield the answer.