Eric in Indiana asks, "What about Fred Thompson?" My indulgence, sorry. Actually forgot to mention Fred in my post. Whoops ... although Fred is a doing a good job these days of being easy to forget, canceling campaign appearances and all.
Fred's financial report was healthy, with a decent pile of cash on hand. Decent enough, anyway, to get some ads on the air and perhaps inject some badly needed energy into his effort. His biggest problem will be fundraising in the fourth quarter. Fred's already raised his easy money and the poor buzz on his campaign may make future money harder to find. But a strong debate performance, a clever ad, a good few days on the road, and all that can change. One thing to remember is that even the campaigns with very limited cash on hand in their FEC reports, like McCain, Huckabee, and to a lesser extend Fred Thompson, can still manage to punch a little above their weight through the dark art of "living on the edge" campaign-cash management.
Here is a somewhat dated example that explains the math. Say your campaign raises a million dollars by direct mail, which generates fund-raising costs of, perhaps, $700,000. Beyond postage, which you have to pay up front, you owe most of that money to list companies, printers, and the like. You can be very slow paying them, while the million bucks in contributions coming in the door can be spent as fast as it can be counted.
So you punch big out there on the campaign trail by spending the million dollars coming in the door on ads, travel, and the like, even though you only raised $300,000. Not bad, eh? This is why campaign staffers take months to get their personal expenses reimbursed, let alone the phone bill, rent, printing, etc., etc. It's all great training for future POTUSes on the slapdash way your federal government runs its own accounting. The downside is the campaign builds a big debt. Those bills eventually must be - at least mostly - paid. Your plan is to either hit it big in a debate or a poll and pay off the debt with a fund-raising surge, or perhaps file for matching funds and use the match money to pay off the debt if everything goes south and you want to end the pain.
It's a speculative strategy, not unlike trying to put your kids through college at the roulette table. But if your campaign is cash poor, it's also the only option you have to stay in the race and wait for that big miracle to arrive.
