This is an interesting one. As reported here last week, the State of Oregon is going for the gusto in borrowing money this month -- slapping $726 million of new debt onto its balance sheet in less than 30 days, at a time when interest rates for government borrowers are anything but cheap.

And yet right smack dab in the middle of this binge comes this cautionary press release from newly minted State Treasurer Ben Westlund. Passing along the bad news from an outfit called the state Debt Policy Advisory Commission, Westlund reports that the state's ability to borrow money is shrinking, and that the state needs to be extremely cautious in racking up new liabilities:

Members of the commission also urge lawmakers to be cautious about new debt because of uncertainty about the long-term state fiscal picture. Further declines in general fund and Lottery revenue forecasts will reduce future debt capacity – and commission members emphasize that they do not recommend that legislators authorize bonds all the way to the limit.

Doing so could jeopardize Oregon’s credit rating, which helps to determine the interest rates at which Oregon can sell bonds. That rating now stands at AA/Aa2/AA, by Standard & Poor’s, Moody’s Investors Service, and Fitch Investors Service, respectively.

The commission also has recommended more education of policymakers and the public the tradeoffs of public debt, which can be a powerful tool to help aid economic development – but also comes with a long-term cost.