Default Now?

by Blair Lee

The University of Maryland athletic department is broke. Swayed by dreams of going big time, the university poured millions into new stadiums, arenas and other sports facilities just as the national economy and the Terps teams took nose dives.

When revenues stopped covering expenses (the athletic department lost $64 million between 2005 and 2010) the university covered the deficits by dipping into a special reserve fund. But now the reserves are exhausted, so the university is adopting a novel approach — cutting costs and living within its means.

Several of the university’s varsity sports programs will be eliminated (the ones that generate the least money and fans) and others will be downsized.

Making expenses match revenues isn’t a novel approach for businesses and for American families. But it’s a novel approach in our nation’s capital, where budgets don’t need balancing and money can be endlessly printed or borrowed.

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