Meredith Whitney: 2011- Year of Defaults

[we_are_toast]

Re: Meredith Whitney: 2011- Year of Defaults

I must respectfully disagree and side with M. Whitney on this one. For state and local governments, the bill has come due.

In the coming months, I expect that we will see the loss of local government power, layoffs, strikes and concessions by local and state government unions, and other belt-tightening measures.

You are correct, it's already here. My brother is a state food inspector based out of your stomping grounds in Madtown. He's being given more furlough days on top of what he was given the last 2 years, and they can't hire any new employees, even though some have retired. Of course this means each inspector must now do much more with many fewer hours. He says it's simply impossible to do the level of inspection he used to do, and the moral in the department is terrible. It only takes one disgruntled employee to decide to hell with it.

You better get out your copy of Upton Sinclair's The Jungle, and think about it the next time you're eating processed food.

[BK]

Re: Meredith Whitney: 2011- Year of Defaults

I'll agree with Ms Whitney -
There isn't any more extra change for local/County/States to extract. For the last thirty years Governments have been expanding services (my county subsidies ice skating, horse back riding lessons, and tennis lessons) and raising every possible tax. If you review the facts from the itulip analysis of the liquid wealth of the Average American - you'll see that they don't have any. A local Grass Air Field closed when the County raised their Property Tax Bill to $35,000/ year - the County was happy to pay $3-5 Million for the land - Taking it off the Tax rolls Completely - but, eliminating any Competition for the County run Airport/Airspace.

We'll be on the road to recovery when my County run ice skating rink is close (sorry, I like to skate - but we can't afford it) and the County Riding stables are closed and the the Recreation Director in every town in America is fired (we can't afford that either). Its not going to be fun for bureaucrats and politicians to finally act like the Head of household and say - 'We CAN't AFFORD THAT OR THAT OR THAT"

[DSpencer]

Re: Meredith Whitney: 2011- Year of Defaults

its pension fund would run out of money by 2009. Right on schedule, its fund ran dry.

Then Prichard did something that pension experts say they have never seen before: it stopped sending monthly pension checks to its 150 retired workers, breaking a state law requiring it to pay its promised retirement benefits in full.

GASP!!!

I guess these people have never heard the expression: "You can't squeeze blood from a turnip"

Did the author already forget what he/she wrote two seconds before? THE FUND RAN DRY. Unless Jesus works in Prichard and can turn IOU's into money, what are they supposed to do? Alabama can pass a state law requiring everyone to ride a unicorn to work if they want to, but what can people do if there aren't enough unicorns around?

The pension system is a joke. Pay them retirement as they work. It's so simple. If anything, Alabama should pass a state law saying you can't make promises you can't keep.

[BigBagel]

Re: Meredith Whitney: 2011- Year of Defaults

Newburgh, NY a city here in the Hudson Valley has the distinction of being the most crime ridden city in New York State. They have massive budget problems. Increased taxes on a crumbling housing stock and layoffs may not be enough. One of the ideas they've thrown out there is dissolving the city government and becoming part of the surrounding Town of Newburgh. It may be a new trend.......Governmental Suicide.

[jk]

Re: Meredith Whitney: 2011- Year of Defaults

GASP!!!

I guess these people have never heard the expression: "You can't squeeze blood from a turnip"

Did the author already forget what he/she wrote two seconds before? THE FUND RAN DRY. Unless Jesus works in Prichard and can turn IOU's into money, what are they supposed to do? Alabama can pass a state law requiring everyone to ride a unicorn to work if they want to, but what can people do if there aren't enough unicorns around?

they could raise taxes -- and hasten the demise of the town, which has a shrinking economy and tax base.
they could lay off their current workers to keep paying their former workers, and thus do away with municipal services.

. If anything, Alabama should pass a state law saying you can't make promises you can't keep.

think what that would do to household formation by ending the institution of marriage.

[FRED]

Re: Meredith Whitney: 2011- Year of Defaults

Ej's creating a video on this. Here's the main exhibit.

• Government payrolls expanded by 1,759,000 since the year 2000.
• Local (towns and cities) governments expanded payrolls by 1,403,00
• 80% of government payroll growth was in local government
• Reduce local government payrolls to year 2000 levels and save $60,175,231,200 per year

[we_are_toast]

Re: Meredith Whitney: 2011- Year of Defaults

• Government payrolls expanded by 1,759,000 since the year 2000.
• Local (towns and cities) governments expanded payrolls by 1,403,00
• 80% of government payroll growth was in local government
• Reduce local government payrolls to year 2000 levels and save $60,175,231,200 per year

Local government employment increased 10.7%
Population increased 9.7%

According to the BLS:
http://www.bls.gov/news.release/empsit.t17.htm

Local government education 8,272.9

Most Local government employees are education related, with police and firefighters representing a good chunk also.

I'm not sure I like the world your suggesting FRED.

[sishya]

Re: Meredith Whitney: 2011- Year of Defaults

Ej's creating a video on this. Here's the main exhibit.

• Government payrolls expanded by 1,759,000 since the year 2000.
• Local (towns and cities) governments expanded payrolls by 1,403,00
• 80% of government payroll growth was in local government
• Reduce local government payrolls to year 2000 levels and save $60,175,231,200 per year

I think Govt employees will be used as a conduit to create inflation(dollar devaluation and REAL debt reduction).
This can be used in conjunction with Employment Insurance/Welfare/Food stamps to get more effect.

This is how third world countries do - increase Govt employee pay/write off Agri Loans/etc....

[jk]

Re: Meredith Whitney: 2011- Year of Defaults

I think Govt employees will be used as a conduit to create inflation(dollar devaluation and REAL debt reduction).
This can be used in conjunction with Employment Insurance/Welfare/Food stamps to get more effect.

This is how third world countries do - increase Govt employee pay/write off Agri Loans/etc....

this sounds un-american. i think we'll do it the old fashioned way- give the money to bankers and the deserving rich via asset inflation.

[don]

Re: Meredith Whitney: 2011- Year of Defaults

I think Govt employees will be used as a conduit to create inflation(dollar devaluation and REAL debt reduction).

This can be used in conjunction with Employment Insurance/Welfare/Food stamps to get more effect.

This is how third world countries do - increase Govt employee pay/write off Agri Loans/etc....

If we do go down a Third World road, expect more, not less, government employees, stuck in subsistence, low-impact security jobs. The fat cop on the corner routine. Bribes and payola will be a fact of life. Barter, too.

[peakishmael]

Re: Meredith Whitney: 2011- Year of Defaults

Local government employment increased 10.7%
Population increased 9.7%

According to the BLS:
http://www.bls.gov/news.release/empsit.t17.htm

Most Local government employees are education related, with police and firefighters representing a good chunk also.

I'm not sure I like the world your suggesting FRED.

Well said Toast! I get so tired of knee-jerk government bashing. Disappointing to hear it from FRED.

Almost certainly local government employment levels will decline. But to suggest that it will be easy, or that growth consistent with population for the last decade was somehow irresponsible or immoral, is BS.

[lektrode]

Re: Meredith Whitney: 2011- Year of Defaults

Who says the states and locals won't find a way to bail themselves out? I say we will see a massive shakedown of citizens in the near future. With thousands of new "code compliance officers" roaming the streets,...

precisely - its already happening out here in the middle of the pacific:
cops with radar guns in all the good (fer them) hiding places, hundreds of tickets for expired reg, inspection stickers, BS parking violations ad nauseum.

and typically, just when the working class is down on its knees, we have the .gov swoop in and thrash us some more!

happy holidaze to all!

[FRED]

Re: Meredith Whitney: 2011- Year of Defaults

Local government employment increased 10.7%
Population increased 9.7%

According to the BLS:

http://www.bls.gov/news.release/empsit.t17.htm

Most Local government employees are education related, with police and firefighters representing a good chunk also.

I'm not sure I like the world your suggesting FRED.

The economy lost over 2.6 million jobs total between 2000 and 2010 while government added 1.8 million jobs.

The percent of all jobs that are government jobs increased from 19% to 21%.

Most of the payroll expenses are in education at 53% of the headcount, with police and hospitals a distant second at 12%, highways and prisons adding 9%, and all other functions less than 3% each.

How much do 1.8 million additional local government employees cost each? According to the BLS, about $43,000 each per year.

What if local government payroll employment is cut to year 2000 levels, higher than the current private sector employment level justifies?

It will save $60 billion per year.

[World Traveler]

Re: Meredith Whitney: 2011- Year of Defaults

Something very similar happened in Margaret Thatcher's Britain. As factories shut down and the economy was financialized, there were huge numbers of layoffs. The slack was picked up by an increase in government employment, which grew steadily in Britain.

[DSpencer]

Re: Meredith Whitney: 2011- Year of Defaults

precisely - its already happening out here in the middle of the pacific:
cops with radar guns in all the good (fer them) hiding places, hundreds of tickets for expired reg, inspection stickers, BS parking violations ad nauseum.

They just got me for this. I didn't even realize they were expired. I renew online and must have missed the email or had it spam blocked. My car was parked on the street and at 2am on a weeknight some cop gave me a ticket for expired registration. I find it pretty frustrating. It's not like I'm some kind of outlaw with a fake license plate.

So the sticker revenue pays the salary of the people who sell them to me. The ticket pays the salary of the cop who spends his nights prowling my suburb looking for expired tags. And the benefit to society from this activity is...? If the goal is revenue, just raise my damn taxes and stop hassling me with these games.

It also makes me wonder if they have a database of expired tags that they give to cops in order to go to their house and see if they can give them a ticket. I wish my garage wasn't full.