American Cities Drown in Debt

San Bernardino, California, has gone from being the birthplace of McDonald's to a mound of unpaid debts.

Here in San Bernardino, California, in the building that once housed the first McDonald's restaurant, Albert Okura has collected nearly everything the fast-food chain has ever produced. There are paper cups, paper napkins, Happy Meal toys -- all the consumer detritus of America's golden years -- but nothing is more important to him than this small metal machine. "It was a brilliant idea," he says. "This way, every hamburger is the same."

Okura believes in that idea to this day. It reminds him of San Bernardino's heyday, here in this city where brothers Richard and Maurice McDonald opened their first fast-food restaurant.

On August 1, 2012, San Bernardino filed for bankruptcy. This city, an hour's drive east of Los Angeles, is one of the poorest, most violent cities in the United States. Once the setting for one of America's greatest success stories, the city can no longer afford to pay its police officers and rots in its own waste.

The situation is a catastrophe for everyone who hasn't packed up and moved away. Funds are short at all levels, from Washington to the states to the cities and towns.

Analyst Meredith Whitney, who predicted the fates of Citigroup and Lehman Brothers, warned in late 2010 of the collapse of America's cities. Up to 100 cities were at risk of going broke with potential losses totalling hundreds of billions of dollars. This city-level debt, which amounts to a total of $2 trillion (€1.5 trillion), is still less than the $16 trillion debt the federal government in Washington has amassed. But the crisis is leading to considerable reductions in services.

“As Mark Steyn Noted: Americans has voted for a lifestyle they are unwilling to earn.”

That is a great way to put it. I think a lot more Americans are leaning this way because it has become so difficult to make a living; while in the past hard work would give a decent standard of living, today it often doesn’t get much more than the gov’t. offers for free. The lack of good jobs is certainly fueling our leftward tilt...

The sole reason my American cities are drowning in debt can be firmly placed on the people who live in those cities. Most lack the ability to speak the American language. Their schools turn out generation after generation of illiterates or dropouts. They do not have simple American values and principles. They look at government as the solution to every problem. It is their culture and I want nothing to do with it and I do not want to pay for it.

From the original article:
“The federal government no longer undertakes large-scale projects as it did with the Hoover Dam in the 1930s or the interstate highway system in the 1950s.”

Not so.

Today we have new large-scale government projects, such as:
- ObamaCare
- The perpetual unemployment benefit system
- A burgeoning “disability industry”
- And of course — the free Obamaphone program!

Germany’s highest corporate tax rate is still lower than that of the USA (29.83% compared to 39.62%). (Germany lowered its average corporate tax rate back in 2006, too.) So lecturing on taxes is a bit hypocritical on der Spiegel’s part.

The highest federal corporate tax rate in the US is 35% not 39.62%. The Germans depend heavily on exports to fuel their economy. It only makes sense to lower the tax burden on their corporations to make them competitive globally. Germany is the world's second largest exporter.

But this isn't about corporate tax rates. It is about the level of taxation on individuals in Germany. They are among the most heavily taxed people in the world. Its average tax rate, including social security contributions, is 50.9 percent, as compared to 29.4 percent for America, which has one of the lowest rates in the world.

And then there is the VAT, fees on everything from the number of TVs and radios you have to garbage collection, etc. Every service seems to be taxed.

I have lived in Germany and my wife is German. I have been going to Germany almost every year for the past 40 years. The Germans are paying for their welfare state, but the US is not. Our people want the benefits of the welfare state but don't want to pay the bill.

I hope you aren’t buying all of their propaganda. Germany with its manufacturing sector can maintain a degree of financial strength, but they need the European Union to be a captive export market as well as to regulate them through their proxies in Brussels. The only way they have been able to get this far is to have the USA act as world policeman. It’s impossible to pay for a welfare state indefinitely, no matter what, either way.

I cited the highest corporate tax rates, not the average, incidentally. The USA’s corporate tax rate is the highest in the world; that’s why jobs have been fleeing.

There is no doubt that Germany benefits from being in the EU and using the Euro, which helps them be more competitive in the global market. The Germans have found a niche market for its high end products such as automobiles. There is also close cooperation between the German government and corporations to ecourage exports and push German products.

I cited the highest corporate tax rates, not the average, incidentally

35% is the highest federal corporate tax rate.

The USA’s corporate tax rate is the highest in the world; that’s why jobs have been fleeing.

Most corporations don't pay the highest rate. That aside, I think corporations (mostly multinationals) are fleeing the US due to cheaper labor, less government regulations, and a more welcoming business environment. I have been to China to see the factories built by multinational corporations. They are at the top of the line technologically and the corporations can recruit a workforce that is just as educated and capable as in the US at far less cost. They don't have to worry about unions, environmental regulations, and lawsuits. And yes taxation of their earnings is less. If I had to choose one factor above all others, it would be cheap, educated labor with a high work ethic.

The only way we can get many of these manufacturing jobs back is thru other factors such as cheap energy, an improved business climate, more certainity in terms political stability and property rights and less regulations. I don't see that happeing under Obama or Hillary when she is elected in 2016. It is not about jobs but ideology.

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