Broke Town, U.S.A.

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    Mar 03, 2011 4:51 PM GMT
    http://www.nytimes.com/2011/03/06/magazine/06Muni-t.html?seid=auto&smid=tw-nytimesbusiness&pagewanted=all

    Vallejo, a city about 25 miles north of San Francisco, offers a sneak preview of what could be the latest version of economic disaster. When the foreclosure wave hit, local tax revenue evaporated. The city managers couldn’t make their budget and eliminated financing for the local museum, the symphony and the senior center. The city begged the public-employee unions for pay cuts — all to no avail. In May 2008, Vallejo filed for bankruptcy. The filing drew little national attention; most people were too busy watching banks fail to worry about cities. But while the banks have largely recovered, Vallejo is still in bankruptcy. The police force has shrunk from 153 officers to 92. Calls for any but the most serious crimes go unanswered. Residents who complain about prostitutes or vandals are told to fill out a form. Three of the city’s firehouses were closed. Last summer, a fire ravaged a house in one of the city’s better neighborhoods; one of the firetrucks came from another town, 15 miles away. Is this America’s future?

    Cities across America are facing dire financial distress. Meredith Whitney, a banking analyst turned independent adviser who correctly predicted the banking meltdown, has issued an Armageddon-like prediction of mass municipal defaults. Others — notably Newt Gingrich — have suggested that state governments as well as cities should be allowed to file for bankruptcy. Congress held a hearing to examine the idea.

    These forecasts of apocalypse have touched a nerve. Americans, still reeling from the devastating impact of the mortgage debacle, are fearful that the next economic disaster is only a matter of time. To anyone reading the headlines of budget deficits and staggering pension liabilities, it takes little imagination to conclude that the next big one will be government itself. The problems of cities are everywhere. The city council of Harrisburg, the capital of Pennsylvania, has enlisted a big New York law firm to explore bankruptcy as a means of restructuring a crushing debt. Central Falls, R.I., is in receivership. Hamtramck, Mich., a small city within Detroit’s borders, says it could run out of money next month. Hamtramck has only 90 employees, yet it is saddled with the pensions and health care obligations of 252 retirees. Detroit itself is at risk. Large deficits will mean closing about half of the city’s schools and will push high-school class sizes to 60 students.
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    Mar 03, 2011 5:12 PM GMT
    riddler78 saidhttp://www.nytimes.com/2011/03/06/magazine/06Muni-t.html?seid=auto&smid=tw-nytimesbusiness&pagewanted=all

    Vallejo, a city about 25 miles north of San Francisco, offers a sneak preview of what could be the latest version of economic disaster. When the foreclosure wave hit, local tax revenue evaporated. The city managers couldn’t make their budget and eliminated financing for the local museum, the symphony and the senior center. The city begged the public-employee unions for pay cuts — all to no avail. In May 2008, Vallejo filed for bankruptcy. The filing drew little national attention; most people were too busy watching banks fail to worry about cities. But while the banks have largely recovered, Vallejo is still in bankruptcy. The police force has shrunk from 153 officers to 92. Calls for any but the most serious crimes go unanswered. Residents who complain about prostitutes or vandals are told to fill out a form. Three of the city’s firehouses were closed. Last summer, a fire ravaged a house in one of the city’s better neighborhoods; one of the firetrucks came from another town, 15 miles away. Is this America’s future?

    Cities across America are facing dire financial distress. Meredith Whitney, a banking analyst turned independent adviser who correctly predicted the banking meltdown, has issued an Armageddon-like prediction of mass municipal defaults. Others — notably Newt Gingrich — have suggested that state governments as well as cities should be allowed to file for bankruptcy. Congress held a hearing to examine the idea.

    These forecasts of apocalypse have touched a nerve. Americans, still reeling from the devastating impact of the mortgage debacle, are fearful that the next economic disaster is only a matter of time. To anyone reading the headlines of budget deficits and staggering pension liabilities, it takes little imagination to conclude that the next big one will be government itself. The problems of cities are everywhere. The city council of Harrisburg, the capital of Pennsylvania, has enlisted a big New York law firm to explore bankruptcy as a means of restructuring a crushing debt. Central Falls, R.I., is in receivership. Hamtramck, Mich., a small city within Detroit’s borders, says it could run out of money next month. Hamtramck has only 90 employees, yet it is saddled with the pensions and health care obligations of 252 retirees. Detroit itself is at risk. Large deficits will mean closing about half of the city’s schools and will push high-school class sizes to 60 students.


    ANOTHER cut and paste by riddler78.

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    Mar 03, 2011 5:21 PM GMT
    LeanathleticDC saidANOTHER cut and paste by riddler78.


    I feel like you're trying to make a point but I'm not seeing it.
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    Mar 03, 2011 8:37 PM GMT
    ...and then there's this...

    "When Vallejo, California, filed for bankruptcy in 2008 after failing to win union pay cuts, Councilwoman Stephanie Gomes said officials around the U.S. would have their eyes trained on the city of 120,000.

    She was right. The lesson they’ve taken from the two-year- old case, which has cost Vallejo $9.5 million in legal fees and made it a nationwide symbol for distressed municipal finances, is that out-of-court negotiations yield better results.

    “They spent a lot of money with very little outcome,” said Jay Goldstone, San Diego’s chief operating officer. Faced with an $82 million deficit in his city’s 2010 budget, Goldstone negotiated pay cuts and higher benefit contributions from unions in 2009 that will save as much as $40 million annually, he said."


    http://www.bloomberg.com/news/2010-12-14/vallejo-s-california-bankruptcy-failure-scares-cities-into-cost-cutting.html
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    Mar 03, 2011 9:13 PM GMT
    Blame those damn rich people! If only we could seize all their money (I doubt any of them actually earned it anyway!) and pay for all of these shortages, think of the glorious nation we'd live in!
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    Mar 04, 2011 7:10 AM GMT
    mocktwinkie saidBlame those damn rich people! If only we could seize all their money (I doubt any of them actually earned it anyway!) and pay for all of these shortages, think of the glorious nation we'd live in!


    Comrade Lenin would be proud indeed.
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    Mar 04, 2011 7:15 AM GMT
    Look, just learn Chinese. It's gonna happen, why fight it
  • GQjock

    Posts: 11649

    Mar 04, 2011 11:43 AM GMT
    Oh here this one's even better icon_confused.gif

    PRICHARD, Ala. — This struggling small city on the outskirts of Mobile was warned for years that if it did nothing, its pension fund would run out of money by 2009. Right on schedule, its fund ran dry.
    Since then, Nettie Banks, 68, a retired Prichard police and fire dispatcher, has filed for bankruptcy. Alfred Arnold, a 66-year-old retired fire captain, has gone back to work as a shopping mall security guard to try to keep his house. Eddie Ragland, 59, a retired police captain, accepted help from colleagues, bake sales and collection jars after he was shot by a robber, leaving him badly wounded and unable to get to his new job as a police officer at the regional airport.

    Far worse was the retired fire marshal who died in June. Like many of the others, he was too young to collect Social Security. “When they found him, he had no electricity and no running water in his house,” said David Anders, 58, a retired district fire chief. “He was a proud enough man that he wouldn’t accept help.”

    http://www.nytimes.com/2010/12/23/business/23prichard.html?_r=2&emc=eta1

    So who wants to talk about Cadillac pension plans now huh?
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    Mar 04, 2011 12:27 PM GMT
    mocktwinkie saidBlame those damn rich people! If only we could seize all their money (I doubt any of them actually earned it anyway!) and pay for all of these shortages, think of the glorious nation we'd live in!


    Though I am far from the left, mocktwinkle makes a valuable point. Post-Depression financiers, such as J. P. Morgan, Rockefeller, and and Vanderbilt gay money to the federal government and smaller cities to offset costs and help initiative a national wide push to counter balance the economy. In order to grow capital, you need capital. Unfortunately the imbalance of state, local, and national balances causes one to question whether a ploy in this direction, too, will help the current financial debacle.

    With growing contention between unions and a Republican Congress, I doubt we will see the pension money distributed to public servants and unions increase, but stagnate, if not eradicate in the next few years. Small towns and cities have been looking toward their public servants who know little, if anything about balancing budgets. After a recent trip to Florida, I began to understand the extent the housing crisis, economy, and the oil spill effected rural and small town economies. Without a mercantile economy in place, political instability increasing throughout smaller and medium sized states, such as Libya, and a growing increase in savings by wealthier regions of the world, we won't see many tranactions between any economy of scales. I foresee a need to create new jobs, but not through high lending from banks without a considerable interest rate or high likelihood on returns. Maybe some of the wealthier groups should create new businesses through alternative means and help stimulate the economy in smaller regions to ignite faith and energy in these areas. Larger cities appear to have a growing supply of smaller opportunities in a plethora of alternative forms of growth, but smaller towns do not.

    Just my five cents....don't usually discuss economics or politics...

    Mike
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    Mar 04, 2011 12:42 PM GMT
    riddler78 said
    LeanathleticDC saidANOTHER cut and paste by riddler78.


    I feel like you're trying to make a point but I'm not seeing it.

    icon_surprised.gif

  • gymlocker

    Posts: 159

    Mar 04, 2011 1:03 PM GMT
    The problem is not unions and pension obligations. Those costs are known to the cities and most unions have been willing to negotiate the obligations when necessary.
    The problem is people and corporations that don't want to pay their tax obligations. Starting with Reagan in 1980, wealthy Americans and corporate America have demanded and received tax reductions that make cities unable to pay the obligations to workers and retirees that they previously agreed to. This happened because the mostly Republican Party agreed to a strategy of "take the tax cuts and run big deficits" which would eventually force us into the problem that we have right now.
    Many American corporations pay little or no corporate taxes, ( Bank of America, GE, etc) because of looholes, yet the GOP consistently complains about taxes, when the US is the most undertaxed of any industrialized country. Then, the GOP shoves the tax burden on to the middle and lower classes.
    Since 1980, 88% of Americans have had no real growth in income adjusted for inflation. We've all been standing still since 1980. The top 12% of wealthy Americans and corporations, however, have seen their real growth in income skyrocket. This disparity ranks us with poorer countries like Costa Rica, Bolivia, and Uruguay, in disparity between the rich and the poor. The US has become a "banana republic".
    So, next time you vote Republican, or whine about paying taxes, realize what you are doing to this country. If you are not willing to bear the costs of the services required to provide a better quality of life, you can always move to China and work for .33/day and receive no benefits. Many of America's corporations have already moved there, to take advantage of the lack of unions and ability to pay people peanuts with no long term benefits. And, thanks to the GOP, they've moved with the help of generous tax breaks, financed by the very people that are being replaced.
  • TrentGrad

    Posts: 1541

    Mar 04, 2011 1:29 PM GMT
    mocktwinkie saidBlame those damn rich people! If only we could seize all their money (I doubt any of them actually earned it anyway!) and pay for all of these shortages, think of the glorious nation we'd live in!


    Oh mock, you poor fellow...you and your ilk are the last oppressed minority in the USA, right?

    Nevermind that tax cuts got passed for people already blessed with enormous stockpiles of disposable income, and nevermind that practically every third or fourth commercial on "Fox" seems to encourage people with big tax debts to hire a lawyer and have their tax bill cut anywhere between 10 and 15 cents on the dollar...it's the rich that are treated sooooo badly in the USA!

    Do you hear that mock? Listen very closely...it's the worlds smallest violin playing just for you and and the other "haves." ROFL
  • TrentGrad

    Posts: 1541

    Mar 04, 2011 1:47 PM GMT
    riddler78 saidhttp://www.nytimes.com/2011/03/06/magazine/06Muni-t.html?seid=auto&smid=tw-nytimesbusiness&pagewanted=all

    Vallejo, a city about 25 miles north of San Francisco, offers a sneak preview of what could be the latest version of economic disaster. When the foreclosure wave hit, local tax revenue evaporated. The city managers couldn’t make their budget and eliminated financing for the local museum, the symphony and the senior center. The city begged the public-employee unions for pay cuts — all to no avail. In May 2008, Vallejo filed for bankruptcy. The filing drew little national attention; most people were too busy watching banks fail to worry about cities. But while the banks have largely recovered, Vallejo is still in bankruptcy. The police force has shrunk from 153 officers to 92. Calls for any but the most serious crimes go unanswered. Residents who complain about prostitutes or vandals are told to fill out a form. Three of the city’s firehouses were closed. Last summer, a fire ravaged a house in one of the city’s better neighborhoods; one of the firetrucks came from another town, 15 miles away. Is this America’s future?

    Cities across America are facing dire financial distress. Meredith Whitney, a banking analyst turned independent adviser who correctly predicted the banking meltdown, has issued an Armageddon-like prediction of mass municipal defaults. Others — notably Newt Gingrich — have suggested that state governments as well as cities should be allowed to file for bankruptcy. Congress held a hearing to examine the idea.

    These forecasts of apocalypse have touched a nerve. Americans, still reeling from the devastating impact of the mortgage debacle, are fearful that the next economic disaster is only a matter of time. To anyone reading the headlines of budget deficits and staggering pension liabilities, it takes little imagination to conclude that the next big one will be government itself. The problems of cities are everywhere. The city council of Harrisburg, the capital of Pennsylvania, has enlisted a big New York law firm to explore bankruptcy as a means of restructuring a crushing debt. Central Falls, R.I., is in receivership. Hamtramck, Mich., a small city within Detroit’s borders, says it could run out of money next month. Hamtramck has only 90 employees, yet it is saddled with the pensions and health care obligations of 252 retirees. Detroit itself is at risk. Large deficits will mean closing about half of the city’s schools and will push high-school class sizes to 60 students.


    You're comical riddler...I mean, just reading what you've written...it's so poorly absorbed that you think you're making one point...when in fact you're making other ones.

    You've been one of the staunchest advocates of Walker in Wisconsin for his efforts to destroy the Unions...in spite of their willingness to meet his demands on salary and benefits.

    Of course what is comical about you talking about Vallejo is that Walker has exempted the Unions representing emergency workers...and it was those vary emergency workers that sealed Vallejo's fate.

    National Right to Work CommitteeDropping down a level, the city of Vallejo, California, actually went bankrupt after nearly 75 percent of its budget was spent on satisfying the demands of the union agreement covering police and firefighters.


    Of course, that was only part of the story...what also sealed Vallejo's fate was shortsighted voters and politicians who re-wrote their own tax laws so that Vallejo couldn't raise taxes after the money they were making from property developers dried up on them. So, on the one hand, police and firefighters were taking 75% of the budget...while on the other hand, the conditions were set in motion for an electorate to bankrupt their own municipality.

    Then you pick up on a small municipality in Detroit, an area that has been virtually gutted since the Reagan years, and suggest that the retirees are bleeding the coffers dry...when in fact the real question should be, where was the money that that small municipality was supposed to be putting aside each year to ensure that health care and pension liabilities would be covered? After all, am I wrong in assuming that you should have at least a rudimentary understanding of how pension funding is supposed to work?

    Did the pension fund disappear into a Ponzi scheme? Did the bureaucrats, who are themselves an over-representation of the wealthy, screw up the same way so many of them screwed up during the Subprime Mortgage fiasco? Or was it simply a case of the illogical demand for tax cuts resulting in the municipality using up that cash on something it was not meant for?

    If indeed it does go belly up, someone capable of doing an adequate examination ought to find out exactly who gutted those liability funds, and the responsible party should be thrown in prison for the next 50 years!

    There's no question that for many states, harsh job cuts will have to be imposed...but that should also be balanced with tax increases as well...otherwise you wind up in an untenable situation that fixes nothing!
  • xebec75

    Posts: 243

    Mar 04, 2011 2:07 PM GMT
    mocktwinkie saidBlame those damn rich people! If only we could seize all their money (I doubt any of them actually earned it anyway!) and pay for all of these shortages, think of the glorious nation we'd live in!


    ^says a man who did not earn his own money. what a joke.
  • turtleneckjoc...

    Posts: 4685

    Mar 04, 2011 2:08 PM GMT
    southbeach1500 said
    gymlocker said Then, the GOP shoves the tax burden on to the middle and lower classes.


    48% of American households pay no Federal income tax. That would be the "middle and lower classes" that you speak of.

    Please think before you post the usual leftist nonsense.


    Time and time again you cease to engage your brain before putting your mouth in gear. Get it right! It's the wealthy that seems to dodge the tax bullet and wants to put that burden on the back of the middle class. Look at what's going on today, how about it.....!

  • xebec75

    Posts: 243

    Mar 04, 2011 2:09 PM GMT
    southbeach1500 said
    gymlocker said Then, the GOP shoves the tax burden on to the middle and lower classes.


    48% of American households pay no Federal income tax. That would be the "middle and lower classes" that you speak of.

    Please think before you post the usual leftist nonsense.


    Here is a good example of a "fact"...try an an actual fact SB.

    Please think before you post the usual fascist nonsense.

  • turtleneckjoc...

    Posts: 4685

    Mar 04, 2011 2:12 PM GMT
    mocktwinkie saidBlame those damn rich people! If only we could seize all their money (I doubt any of them actually earned it anyway!) and pay for all of these shortages, think of the glorious nation we'd live in!


    Being from the left here, you and I don't always see eye-to-eye and some of the posts above me take aim at your statement, but you know what?

    I agree with you.

    Case in point: I have relatives that are filty rich and they don't give a damn about anyone else but them. All they crave is "more money....more money....money, money, money." Money to fuel their extravagant lifestyles.

    If they even bothered to stop catering to the person they see in the mirror and help out others less fortunate, they wouldn't miss the money they gave. Their motto is "greed is good."

    Bastards!

    Mock, I have to side with you on your statement.
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    Mar 04, 2011 2:38 PM GMT
    Turtleneck...

    ...I think Mock wrote that in a facetious tone. If I can speak for him a little, I think he is certainly not in favour of wealth redistribution.
  • turtleneckjoc...

    Posts: 4685

    Mar 04, 2011 2:39 PM GMT
    alphatrigger saidTurtleneck...

    ...I think Mock wrote that in a facetious tone. If I can speak for him a little, I think he is certainly not in favour of wealth redistribution.


    Thanks and for a split second I thought he finally came to his senses.....
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    Mar 04, 2011 2:42 PM GMT
    Quoting myself for the more, er, dense folks.

    meninlove said ...and then there's this...

    "When Vallejo, California, filed for bankruptcy in 2008 after failing to win union pay cuts, Councilwoman Stephanie Gomes said officials around the U.S. would have their eyes trained on the city of 120,000.

    She was right. The lesson they’ve taken from the two-year- old case, which has cost Vallejo $9.5 million in legal fees and made it a nationwide symbol for distressed municipal finances, is that out-of-court negotiations yield better results.

    “They spent a lot of money with very little outcome,” said Jay Goldstone, San Diego’s chief operating officer. Faced with an $82 million deficit in his city’s 2010 budget, Goldstone negotiated pay cuts and higher benefit contributions from unions in 2009 that will save as much as $40 million annually, he said."


    http://www.bloomberg.com/news/2010-12-14/vallejo-s-california-bankruptcy-failure-scares-cities-into-cost-cutting.html
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    Mar 04, 2011 3:03 PM GMT
    mocktwinkie saidBlame those damn rich people! If only we could seize all their money (I doubt any of them actually earned it anyway!) and pay for all of these shortages, think of the glorious nation we'd live in!



    But a comprehensive new Wall Street Journal-NBC News poll : 23 percent think it’s acceptable to, for example, make cuts to Medicare, while 81 percent favor instituting a millionaire’s surtax:


    You are SO in the minority mocktwinkie.

    You must be one of those multimillionaires.....since you have such pity and sorry for those mulitmillionaires.

    koch_brothers_crop.jpg

    Boo Hoo Hoo. Those Defenseless Kock Brother......

    How will they put food on their table tonight.
  • matt13226

    Posts: 829

    Mar 04, 2011 3:10 PM GMT
    Even if we tax the upper class it wont help either situation im screwed because im single the people who will end up heavily taxed will be singles if anything because we have republicans and democrats who tax one class but not the other and the middle class people always get taxed so either way im screwed and so r all u other single guys.
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    Mar 04, 2011 3:24 PM GMT
    southbeach1500 said
    gymlocker said Then, the GOP shoves the tax burden on to the middle and lower classes.


    48% of American households pay no Federal income tax. That would be the "middle and lower classes" that you speak of.

    Please think before you post the usual leftist nonsense.


    Your only accounting for income tax, not the range of other federal taxes which do disproportionately impact middle and working class families.
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    Mar 04, 2011 4:15 PM GMT
    southbeach1500 said
    Christian73 said
    southbeach1500 said
    gymlocker said Then, the GOP shoves the tax burden on to the middle and lower classes.


    48% of American households pay no Federal income tax. That would be the "middle and lower classes" that you speak of.

    Please think before you post the usual leftist nonsense.


    Your only accounting for income tax, not the range of other federal taxes which do disproportionately impact middle and working class families.




    48% of American households pay no Federal income tax. That would be the "middle and lower classes" that gymlocker speaks of.


    Nothing that you wrote contradicts what I wrote. Do you have a point?
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    Mar 04, 2011 4:25 PM GMT
    Yes he does Christian; his point is to divert everyone away from the topic material.