We're going to have to leave town when the unions figure out how bad we've screwed them ...
We're going to have to leave town when the unions figure out how bad we've screwed them ...
They all expect a federal bailout.
They ran out of other people’s money.
But all the smartest people are in charge. Interesting.
And right there is the biggest part of the solution. Bankruptcy should erase those unsustainable union contract obligations. Retirees won't be stranded. They can go on Medicare like the peasants who pay for the public sector profligacy. That might mean NYC employees would have to stop retiring at age 50 or 55, but my sympathy is limited.
Nor should we be afraid of the math on the pension side of the question. Public sector pensions are lavish. I do not want to see anybody lose his pension … BUT, if the unions and the pols have collaborated for decades to run up lavish promised benefits in underfunded pension plans, let the chips fall where they may. The injured parties are not innocent in this matter. A legitimate bankruptcy would slash pension benefits to the levels covered by actual cash reserves. That would still leave public sector retiree benefits far ahead of most people in the private sector. I can live with that. So can they.
This makes me happy, let them fail...just don’t stick me with the bill!
Eliminate several major metropolitan regions in the USA and you eliminate a trillion dollars worth of debt.
Cities once justified their existence as the way to concentrate human, financial and material capital along a waterway.
Today no longer any need to do so. Cities started to die economically around 1950-1970 and have since been on life-support. The costs of running a city expand exponentially relative to population density and even greater when you start going vertical.Punching out that kind of infrastructure has to be economically rational.
Couple that fact along with PSU (public service union) corruption and dated organizational structures and you get a Washington DC Metro system with a 3.5-4.0 BILLION dollar budget for a system generating 400-500 million annually in revenue.
Cities are subsidized heavily by the Dems seeking to maintain a voter block and quite probably a focus of voter fraud
Its probably even worse. There are rumors that various municipalities, both large and small, all over Upstate NY are cooking their books,and that Albany is aware of at least some of it.
I hope Cuomo does run for prez. That might shine some sunshine on the financial fun and games here.
Include the 64,100 tax burden in the price of a home in NYC...including no property tax for 10 years and after that a reasonable cap on that tax. Force the city and state to hold a popular vote to increase tax valuations.
The home price would have to be reduced to move it.
Give the buyer an iron-clad contract that no further funds would ever be sought from them.
Also... Offer people a 10 year tax moratorium where they would pay zero city and state taxes. People would come...at least for 10 years.
And give the retirees a huge haircut..cut them back to 25% of current benefits...the money ain’t there anyway.
NYC would thrive...and with limited funds layabouts would move on...likely to CA...what a hoot that would be :-)
I really have no problem with welfare and food stamps so long as the recipients MUST work a 40hr week to get them....there is MUCH infrastructure work needs doing!
Which is why NYC wants Upstate.
For the money.
L8r
Counting future pension costs for current employees as evidence of a city being “Completely wiped out” is a little hysterical.
Suppose you hire your first employee. You promise him a pension. OMG! You’re completely wiped out!!! No.
Correctly, Weinberg points out that ignoring long-term debt “because it will be paid off over time is like an individual ignoring their credit card balances, because they are paying their minimum payments.”
Well, no. Credit-card balances are notorious because you pay 18% interest, instead of 4% interest. The financial situation of these cities is more like someone who has a mortgage. Are they meeting their monthly payments? If so, fine. Do you “forget about” having a mortgage? No. Do you expect that the mortgage will bankrupt you? No. But if you’re just barely making your monthly payments when the economy is great, do you worry about the effect of being laid off even for a brief while? Yes.
Because they do not have productive people. They have the people who TAKE, and who do not produce.
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When you factor in all the pension obligations, all these cities are really bankrupt. This is one big reason why they are rabid about Trump: Trump is not going to go for a bailout.
The pols know they are in deep trouble. They have been feverishly enrolling almost all new hires into basically 401k’s instead of their defined benefit plans. If they can survive the next 20-25 years they will come out OK. It’s just the next couple of decades will be a severe financial strain on cash flow.