The private sector has, for the most part, adjusted spending to account for the recession. Pay cuts, cancelling 401k contributions, layoffs, reduced travel, etc.
Government has not at any level. This government bubble has to burst, and it will be fugly.
Between the SEIU, AFSCME, etc., the American people fund LAVISH salaries and pensions to every politician, political appointee, and civil service non-producers nationwide. It’s pervasive in local, state, and federal employment. The benefits and salaries are FAR beyond the work produced, and the bulk of the jobs are un-necessary, and merely created to suck taxpayers’ money into the pockets of UN-TOUCHABLE and UNACCOUNTABLE parasitic wealth-redistribution-dependent people who couldn’t survive in a competitive private job.
Me and Fars talked about this a couple of years ago, different scenario but same action taken by bond holders.
Same outcome, too.
The federal gov’t will take-over municipal and state debt....in return, the federal gov’t gets full legislative control.
I bet its in the financial reform bill, constitution be damned.
“Full faith & credit” of the government will eventually be reduced to nothing more than the raw power of asset seizure.
Which means this analysis is based on information before "stimulus" checks were distributed. The shamulus money that was supposed to go to shovel-ready jobs was really used to fund jobs that had already been planned. Money that local and state governments had previously allocated to these projects were then used to shore up some of the bad debt that they had accumulated.
Conclusion: Your tax money has been used to delay the bond crisis that is portrayed in this article. It will happen, but the crisis will happen right along when the rest of the economy goes into the crapper when the shamulus costs have to be paid for.
Bookmark to read later.
just in case you were counting on those City of Flint Sewage Bonds for your retirement...
The standard calculations of U.S. debt as a percent of GDP never take into account this nearly $3 trillion in S&L debt.
If they did, they’d discover we’re already uncomfortably close to 100%.
Likewise, the $107T in unfunded obligations for SS and Medicare only includes the federal obligations. Left unmentioned are both the existing state and local government debts, but also the unfunded liabilities of their retiree pension and health care systems. Of course, to a man destined to drown in his swimming pool, adding another foot to its depth isn’t going to make any difference.