Poshard: Default would be a serious blow to university

2013-10-15T07:00:00Z Poshard: Default would be a serious blow to universityTHE SOUTHERN The Southern
October 15, 2013 7:00 am  • 

While the two-week-old federal government shutdown is having little impact on SIU, President Glenn Poshard warns a default on the nation’s debt could be more serious to university operations.

Poshard issued an extended statement to the university community Monday afternoon, explaining SIU would remain fairly shielded from the direct effects of the shutdown, even in the event the episode lasts several more weeks.

A failure by Congress to raise the debt ceiling and a default on the country’s creditors would be the worse of the two scenarios, Poshard outlined in his statement.

“It’s important to recognize that SIU has been maintaining strong cash reserves, so we don’t anticipate a delay in federal reimbursement will cause us financial stress in the short term,” his statement said. “However, a default on the nation’s credit and the ensuing economic calamity that would occur will place a significant strain on the university’s ability to operate in the financial marketplace. That would jeopardize our ability to sell bonds and engage in borrowing.”

“As a former member of Congress, I must take this moment … to call upon our federal elected officials, and especially those who believe following this destructive path of non-cooperation and non-compromise in order to achieve their goals, will only hurt the nation. They must put the greater good above all else,” Poshard’s statement concludes.

While the federal government does provide funding for various university functions, like research, student financial aid and Head Start, Poshard said SIU has already been paid all financial aid supplements for the fall. In addition, all research and Head Start programs are initially funded locally before the university seeks reimbursement from the federal government.

In that sense, Poshard said, provided careful management of its finances, the university will be free to continue many of its operations unhindered for the foreseeable future.

“I want everyone to know that Southern Illinois University has the financial stability to maintain full operations” Poshard said. “Monies due to the university from the federal government for the fall semester have been received and our own fiscal planning will allow us to manage in these uncertain times.”

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(5) Comments

  1. Ishmael
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    Ishmael - October 15, 2013 10:24 am
    "It would really be scary if China owned all 17 trillion dollars of our debt" - OLD JOE

    Actually, it's "scarier" that we own the majority of our own debt in this current crisis. It means that if we default we are the ones taking the most damage. China holding approximately 8% of our debt means they can hurt us financially, but it will be a pinprick compared to what we will be doing to ourselves considering we own about 70% of it.

    The Tea Partiers are truly holding a gun to the head of the US population. Unfortunately (because of the Dunning-Kruger effect) they don't even realize it.

    http://www.psychologytoday.com/blog/evolved-primate/201006/when-ignorance-begets-confidence-the-classic-dunning-kruger-effect

    "The Dunning-Kruger effect describes a cognitive bias in which people perform poorly on a task, but lack the meta-cognitive capacity to properly evaluate their performance. As a result, such people remain unaware of their incompetence and accordingly fail to take any self-improvement measures that might rid them of their incompetence."
  2. OLD JOE
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    OLD JOE - October 15, 2013 9:57 am
    A few days ago I was surprised to learn that China didn't own as much of our debt as I thought.

    It would really be scary if China owned all 17 trillion dollars of our debt
  3. Ishmael
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    Ishmael - October 15, 2013 9:16 am
    Another interesting fact. I bet most posters believe most of the US's debt is owed to China. The reality is 2/3 of our debt is owned by us. If we default, we will once again, be shooting ourselves in the foot. The people we will not be paying is ourselves.

    http://www.politifact.com/truth-o-meter/article/2013/oct/13/ten-questions-about-debt-ceiling/

    "6. To whom (or what) does the United States actually owe this money?

    More than two-thirds of the United States’ debt is held in the United States, either directly by individual bondholders or by institutions, such as mutual funds or retirement plans. The remaining third is held by foreigners, either individually or institutionally. Of that one-third held by foreigners, almost 23 percent is held by Chinese individuals or institutions and 20 percent is held by people or institutions in Japan. Investors in dozens of other countries hold some U.S. debt, but no single country other than China and Japan holds more than 5 percent of the foreign total."
  4. Ishmael
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    Ishmael - October 15, 2013 9:06 am
    "The U. S. takes in $250 billion in taxes a month, the interest and principle payments are $25 billion. So when you do the math, it can't happen. Also, don't worry about Social Security checks, they have to come out next. The worst that can happen is some worthless pet project doesn't funded." - DoubleUp

    Sooooo; paying our troops, Medicare, Air Traffic control, border patrol, etc, etc are "worthless pet projects, eh? Interesting ...

    On a side note; this whole situation creating a whole new breed of "deniers" ("debt" deniers to go along with the ever popular "climate change" deniers) is fascinating to me.
  5. DoubleUp
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    DoubleUp - October 15, 2013 7:31 am
    Why does everyone keep saying we'll default if the debt ceiling isn't raised. Oh, wait, scare tactics. The U. S. takes in $250 billion in taxes a month, the interest and principle payments are $25 billion. So when you do the math, it can't happen. Also, don't worry about Social Security checks, they have to come out next. The worst that can happen is some worthless pet project doesn't funded.

    All raising the debt ceiling does is gives our Spender in Chief the ability to borrow and waste more money. So don't by the BS.
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