100 US cities threatened by $2 Trillion debt crisis

[zdreg]

Quote from trefoil:

Actual answers here: http://www.usgovernmentrevenue.com/state_rev_summary.php?chart=Z0&year=2008&units=b&rank=a

...for 2008, the last year for which there are definite figures.
CA collects 13.1% of the state revenue, while having 13.3% of the total GDP of the US (20% is what I always hear cited, but that's obviously another unsubstantiated anecdote).
So, its revenues aren't out of line with its economic activity. Obviously, there are other problems there.
Bottom line: democracy <> supermajority. Requiring a supermajority to get anything done is a guarantee of paralysis.

when the shit hit the fan do something even if it is the wrong thing. forest gump.

"the only time the country is safe is when congress is not in session. "
__________________________
"Obviously, there are other problems there. "
not obvious.how about the entire US government is running an unsustainable ponzi deficit.

 

[trefoil]

Quote from jem:

294 billion in state and local tax revenues. and it does not have to provide for national defense or social security?

More revenue than any other state on list... it looks like by close to 30 percent.

I would call that massive.

How many countries take in that amount?

it is the 8th largest economy in the world and it taxes the hell out of it citizens.

The democrats have had control of the legislature for decades and they have purposely spend the state to oblivion in order to garner votes.

We have cops an firemen making six figures.... we have school teachers with big salaries and great retirements.

We have deputy district attorneys make well into the six figures.

I do not even want to know what the life guards are making.

we have unbelievable give aways to people who do not even have to be citizens.

it has to stop and it is not prop 13s fault. Blaming prop 13 for problem is insane. CA still gets massive revenue from property taxes as it is.

Every single one of the things you cite are 1 - unsubstantiated (you present no specific evidence) and 2 - anecdotal.
The 294 billion figure sounds large when you have nothing to compare it against. The fact is it's less, as a proportion of economic activity in the state of California, than the average amount collected by a typical state in the union. That's not anecdote: that's data.
Also, I think what happened with property taxes sounds silly, but I don't live there, so I offer no opinion on that. What I do criticize is the requirement for there to be a supermajority to get a budget passed. That is simply undemocratic.
What does that mean as a practical matter though? That your incessant blaming of the Democrats is, plainly, wrong. Are you going to sit there and seriously say that since the passing of Prop 13 the Democrats have had a two thirds majority in both houses and can get a budget passed without the Republicans? Because unless they have that two-thirds majority, Republicans were passing those budgets along with Democrats.

 

[IanMacQuaide]

Quote from jem:

294 billion in state and local tax revenues. and it does not have to provide for national defense or social security?

More revenue than any other state on list... it looks like by close to 30 percent.

I would call that massive.

How many countries take in that amount?

it is the 8th largest economy in the world and it taxes the hell out of it citizens.

The democrats have had control of the legislature for decades and they have purposely spend the state to oblivion in order to garner votes.

We have cops an firemen making six figures.... we have school teachers with big salaries and great retirements.

We have deputy district attorneys make well into the six figures.

I do not even want to know what the life guards are making.

we have unbelievable give aways to people who do not even have to be citizens.

it has to stop and it is not prop 13s fault. Blaming prop 13 for problem is insane. CA still gets massive revenue from property taxes as it is.

I personally know a California teacher..a member of the Teachers Union..
(it's Kalifornia..whaddya expect?!?!)
she's 48yrs old, pulling in $90K a yr.
Now, lets leave out the "she only works 9months" bullshit and just stick to real world cost projections.
If she retires at 30 yrs service @ 80% of her salary, that's
$72K a yr, add in health benefits and you're looking at $80K a year EASY...right?

How many teachers in CA do this before the Union and the State cease to exist as an economic entity?
We haven't even mentioned the cops, firefighters and city and state employees.

I have extended family in CA, all either teachers or retired teachers...and when I mention things like this they just give me a blank look.

 

[chartman]

Quote from brokenmarkets:

city and gov't can't default on loans.

they have taxpayers and the city own land...bondholders of muni bonds have lien on city assets like corporate bonds..

GO bonds have the full taxing authority on all real property which means the local cities will have to increase real property taxes to cover the GO bonds. Other bonds such as revenue bonds only have the income from the underlying facility to be the asset behind the bonds. Federal government bonds are like the dollars, they have nothing but the faith in the government to not default.
Probably the GO bonds are the safest until like in a city such as Flint where houses cannot given away because of the taxes being too high making property ownership too expensive.

 

[denner]

Quote from chartman:

GO bonds have the full taxing authority on all real property which means the local cities will have to increase real property taxes to cover the GO bonds. Other bonds such as revenue bonds only have the income from the underlying facility to be the asset behind the bonds. Federal government bonds are like the dollars, they have nothing but the faith in the government to not default.
Probably the GO bonds are the safest until like in a city such as Flint where houses cannot given away because of the taxes being too high making property ownership too expensive.

People will finally connect the dots between the orchestrated push to overdevelop housing in this country, the thuggery of holding interest rates at artificially low levels, creating the ultimate slush fund and black hole with the govt mortgage market, etc...all of it to get as many unwitting participants into the "dream of home ownership" which has quickly turned into the ultimate trap. The kicker, IMO, is that the municipalities are at odds with the banks in this impending war as to who can extract as much money as possible from the "homeowner".

The municipalities (and their union constituents) would be all in favor of forebearance if it meant that the property taxes kept flowing in. I still see the end game as real estate functioning solely for its property tax revenue. And just wait till these property taxes continue to climb higher with less credit availability, it sure as heck doesn't spell higher real estate prices.

 

[denner]

Quote from IanMacQuaide:

I personally know a California teacher..a member of the Teachers Union..
(it's Kalifornia..whaddya expect?!?!)
she's 48yrs old, pulling in $90K a yr.
Now, lets leave out the "she only works 9months" bullshit and just stick to real world cost projections.
If she retires at 30 yrs service @ 80% of her salary, that's
$72K a yr, add in health benefits and you're looking at $80K a year EASY...right?

How many teachers in CA do this before the Union and the State cease to exist as an economic entity?
We haven't even mentioned the cops, firefighters and city and state employees.

I have extended family in CA, all either teachers or retired teachers...and when I mention things like this they just give me a blank look.

That's what I always argue as well (the 9 months part), even less when you really look into it. On a per annum basis, these people are easily in the $100k+ range.

Although, the creme de la creme are universities. If you really look into it, it's quite possible they work roughly 7 months per year. Month long winter break, plus a shorter school year.

 

[IanMacQuaide]

Quote from denner:

That's what I always argue as well (the 9 months part), even less when you really look into it. On a per annum basis, these people are easily in the $100k+ range.

Although, the creme de la creme are universities. If you really look into it, it's quite possible they work roughly 7 months per year. Month long winter break, plus a shorter school year.

Which has nothing to do with their retirement.

 

[denner]

Quote from IanMacQuaide:

Which has nothing to do with their retirement.

Exactly. I'm still waiting for a few more Crist's to attack this issue and release financial statements of just how dire the state finances are WITHOUT these entitlements and benefits.

Nobody wants to touch the issue, but honestly, we start with the legacy costs and work from there. If a teacher making $90k per year working roughly 3/4's of the year can't fund her own retirement, then tough luck.

Of course, the dirty little secret is that consumer spending would literally collapse once the public sector is unable to spend all of their current earnings with the fallback of lifetime pension earnings and benefits. Haven't seen this side effect mentioned once, anywhere.

 

[Eight]

CA has been bk for a long time if you look at the longer term entitlements and promises that can NEVER be met. It's more a question of who gets thrown under the bus first, and second and third... because obviously nobody can fix it, that's a certainty. People in the welfare bureaucracy have made it clear that even if they were ordered, legally, to check citizenship that they would refuse to do it, that's one example of why nobody will fix it... so CA is headed for the identical insanity of places like Argentina a few decades ago; lunatic voters WORSHIPPING leftists and getting poorer and poorer year after year.. in fact, that is how it will play out even if the economy recovers!! So f%^k all these people that believe in government, smart people never believe in government, you have to be nuts to believe in government, all I want out of government is respect for my rights under the Constitution, government is just tax manipulators and political hacks, let's face it...

The real question is not how to fix it, it's how to short the living shit out of it all the way down and how to call the bottom and buy stuff that will have economic "meaning" at the bottom..

What is the best "short CA" play?

 

[IanMacQuaide]

Quote from denner:

Exactly. I'm still waiting for a few more Crist's to attack this issue and release financial statements of just how dire the state finances are WITHOUT these entitlements and benefits.

Nobody wants to touch the issue, but honestly, we start with the legacy costs and work from there. If a teacher making $90k per year working roughly 3/4's of the year can't fund her own retirement, then tough luck.

Of course, the dirty little secret is that consumer spending would literally collapse once the public sector is unable to spend all of their current earnings with the fallback of lifetime pension earnings and benefits. Haven't seen this side effect mentioned once, anywhere.

That would be interesting...but all we can do is wait.
Main Stream Media won't touch these stories.