The Stanford Daily
Wednesday May 21, 2008
CFO explains handling of University debt
Debt instruments issued primarily to finance facility capital projects
May 21, 2008
By Kamil Dada
"With the recent U.S. economic decline, scores of colleges and universities across the nation have been facing a sharp rise in interest payments on their large debts. According to the 2007 Annual Report, Stanford currently has approximately $1.5 billion of debt outstanding.--The collapse of the auction-rate debt market forced universities to restructure millions of dollars of debt, as the interest payments doubled or in some cases tripled beyond what officials had budgeted. Stanford, too, was impacted by the collapse of the auction-rate debt market in February. According to Livingston, the University had approximately $318 million of auction-rate securities outstanding.“One of our debt instruments went from approximately three percent interest rate to eight percent within a week,” he said. The change in interest cost the University nearly $180,000.--
Ted Rudow III,MA
What is the matter with not only the U.S. government but the average American family? What is their economic condition? They spend money they don't have and they borrow. … Where do they get so much cash? How can they buy such fancy cars and big TVs and all this fancy furniture and all these things they've got? How can they afford it? They can't afford it! They buy it on credit. And they're all in debt up to their ears.
Rich people have borrowed themselves into debts that they can never repay! Poor people the same. Middle class people the same. So if the slightest little thing gets out of balance or goes off in any way, the whole thing crashes like a bunch of dominoes! And who do you suppose can jerk the rug out and make it happen so that everybody loses everything, including the government, and can't pay? Everybody loses but the ones who loaned the money and now own everything! They loaned the money on the house, now they own the house. They loaned the money on the car, now they own the car. They loaned the money on the property, now they own the property! They loaned the money on the business, now they own the business. They loaned the money on the industry, now they own the industry! They loaned the money to the government and now they own the government! Those are the facts; that's how it works!