Borrowing for Growth

Maine just took on $60 million in debt to finance its economic development program. In the absence of any financial reserves, more states and some communities are asking voters to approve bonds to support future ED programs and projects. Iowa has gone down the same approach and so has Pennsylvania.

One bit of advice if you are considering going into debt to finance your ED initiatives, make sure that the money you borrow is clearly being used to finance real "economic catalysts." Remember that somehow you will have to retire the debt. Bet on winners.

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