The next financial crisis is already here (Coming to a City near you)

Jewish World Review ^ | 9/13/08 | Mikey_1962

[Mikey_1962]

Mayor Osby Davis, who has lived in this waterfront city across San Pablo Bay from San Francisco for 60 of his 62 years, says: "If you have a can that's leaking two ounces a minute and you put an ounce a minute in it, it's going to get empty." He is describing his city's coffers.

~snip~

... a police captain receives $306,000 a year in pay and benefits, a lieutenant receives $247,644, and the average for firefighters — 21 of them earn more than $200,000, including overtime — is $171,000. Police and firefighters can store up unused vacation and leave time over their careers and walk away, as one of the more than 20 who recently retired did, with a $370,000 check. Last year, 292 city employees made more than $100,000. And after just five years, all police and firefighters are guaranteed lifetime health benefits.

~snip~

"Next"? This crisis has arrived in Jefferson County, Ala., which includes Birmingham. Like Orange County, Calif., a few years ago, Jefferson County made risky investments in a desperate attempt to achieve asset growth commensurate with the cost of an infrastructure project. When San Diego was earning the sobriquet "Enron by the sea," firefighters could retire at 50 with 90 percent of their pensions — almost full pay for not working during half of their expected adult lives.

[Mikey_1962]

Will:

San Francisco recently reported that 184 of its employees made at least $30,000 apiece in overtime in the first half of this year. A nurse at the county jail made $128,000 in overtime, putting him on track to top his total 2007 compensation of about $350,000. Nice work if you can get it, and you can get it in many places.

[Lynne]

I believe that in New Jersey they can bank unused sick time also.

[tcostell]

This is a prescient article. An economic slowdown is going to reduce the tax revenues of local and State government. In the meantime the civil service unions have been running amok spending money like crazy in the belief that if they ever needed more they can just go "take it" from the taxpayers. This It will get much worse as the local government's credit worthiness becomes an issue, and since the credit crisis has cut into the credibility of bond insurers, it will be harder and more expensive for them to borrow. Our politicians lack the ability to say no to spending in both parties, and fiscal discipline in government is considered a quaint relic of a time long past. I mean, how are you going to save the planet if you don't spend money right?

Here in New Jersey we're ahead of the pack, being the worst offender on per capita spending, and being number 2 in per capita debt and taxes (at least until you add in property taxes... which puts us way out in the lead as number one). We also have a powerful civil service union that is the uncontested queen of the capital, after having literally been "in bed" with the governor. No one, but no one confronts the civil service unions in government. Whatever they ask for they get. no benefit or increase is ever denied them if there is any way a politician can hide or justify it.

If you want to see what the future is for your state... look to New Jersey. Right now our tax and spend Democrat governor is trying to pass off ideas like raising the tolls on the garden state parkway to $40 dollars each way, and using creative financial tricks (sort of a Special purpose vehicle for government) to let him borrow more money than the state constitution will allow.

The whole place is a fiduciary mine field and the bill is about to come due. I'm betting they'll be forced to take a serious look at insolvency and east German style confiscatory taxes. As it the population is in free fall. We have more people escaping over the Delaware every year than they had fleeing east Berlin. And there ain't no printing press in the treasury department of a state government.

This is the future of local government.

[am452]

My wifes brother is a firefighter in a small town of 30k people. He made just under 100k last year. He does not work as much as some of theothers do so they are making over 100k. That is insane.

No wonder my property taxes have tripled since 1995

[decimon]

FYI, unless you are George Will, you have wrongly attributed the article.

[4yearlurker]

Here in Monessen,PA.,the local newspaper headline read:”Monessen running out of money.” When I read that headline I grabbed my wallet.

Monessen homeowner=cash cow.

[Senator John Blutarski]

Well, it appears that we have finally reached the bottom of the cornucopia.

The unions will discover that harsh economic reality trumps all their political power and influence. Like all institutions, they have abused their power for too long and their entire house of cards will come crashing down around their ears.

[Mikey_1962]

I'm betting they'll be forced to take a serious look at insolvency and east German style confiscatory taxes. As it the population is in free fall.

Look at Detroit to see your future.

In 1950 Detroit had the largest per capita income in the USA, and a population of nearly 2 Million.

Throughout the 60's and 70's the City taxed businesses and residents while subsidizing unwed mothers and the drug addled with free rent and reduced utilities.

Guess which population increased and which decreased?

Now the number 1 employer in the City of Detroit is the Detroit Public School System, which cannot be taxed and the population is less than 800,000.

You are right: the people will vote with their feet, and those poor bastards left behind will be the ones who do not have the economic ability to leave.

[tcostell]

You know, now that you mention it I think you’re absolutely right. That’s EXACTLY what’s going to happen here.

[flowerplough]

Coming to a city near me? Ain’t no city near me. Spend and burn, baby, spend and burn.

[ThePythonicCow]

In 1950 Detroit had the largest per capita income in the USA

Excellent example - thank-you.

[KayEyeDoubleDee]

The problem here is demographics.

After the decriminalization of chemical abortifacients [Griswold -v- Connecticut] and surgical abortion [Roe -v- Wade], Caucasian Americans [especially in the Blue States] stopped having live births.

Now there are no young Caucasians to purchase the houses of the aging Caucasian boomers, and there are no young Caucasians to fund the retirement pensions of the aging Caucasian boomers.

S*** hits the fan circa 2020, when the entire system will collapse and implode [or explode] into Goodness only knows what.

[Mikey_1962]

The article was written by George Will and posted at Jewish World Review; being a person with a firm grasp of the obvious I thought everybody would understand that by reading the link.

I never attributed the article to anyone other than George Will.

[decimon]

I never attributed the article to anyone other than George Will.

Please understand that this isn't to bust your chops.

Look at your original post and you will see that you did. "Jewish World Review ^ | 9/13/08 | Mikey_1962 " indicates that you authored the article.