State and local economies

[reasonfreedom]

Hi all,

I watched the 60 minutes show on Sunday about the states fiscal problems. I am convinced that this will be the next main trouble area. The worst thing is that it is going to affect teachers. Just imagine being the governor of a state and having to go up in front of a teachers union to say something to the effect we don't have the money to pay your pensions and benefits. If our teachers get into trouble, doesn't that give way for massive education problems and then the chain effect that it may cause? Here is the link to the article.

www.cbsnews.com/stories/2010/12/19/60minutes/main7166220.shtml?tag=contentMain;cbsCarousel

Let me know what you think

[comokate]

This is part of the reason I do not think the economy is going to "recover" anytime soon ( despite the market cheer-leading going on by "he who's name cannot be spoken" ) ;-)

There seems to be an enormous, collective denial about how unhealthy our economy truly is.

[neohguy]

Lots of denial and a Federal Reserve chairman that's actively encouraging it by trying to create a "wealth effect" by encouraging over leveraged consumers to buy stuff and participate in the stock market. Buying stuff doesn't help us very much because too much of it is made elsewhere. Basic high school economics taught us that the average Joe should avoid credit card debt, save a portion of your salary, and have very limited exposure to stocks.

[scaredshirtless]

Kate & Neoh;

Absolutely spot on!

There ain't no stinkin recovery.

[The Virginian]

Our store is certainly not doing any better this year. We are ending the year with a 10% drop in sales over last year ( Which was a horrible year)

[scaredshirtless]

I know a large mail order company freakin out. They had a great year considering until Christmas. Christmas is 20% off of expected. They just let all the temporary help go yesterday. Its gonna screw up the whole year.

[Deleted]

And we are up 20% in sales

And over 35% in net profit

And i just finished the 2011 projections calling for another 10% sales increase

it depends on your business...and your particular area

Some companies are prospering...some are dying on the vines

How much of that depends on management adjusting to the times...and making ALL necessary changes?

I have an aquaintance that owns a small hardware/fixtures store...sells mostly to contractors and the self help types...his main competition is of course Lowes and Home Depot....he went into the year carrying at least 2-3 extra staff and he was aware of it...but because of his loyalty to his employees he just couldnt find a way to let them go. He may make it through this year and next...he may not. But he would have had a lot better chance if he had adjusted the staff....

I know...tough choices....but in my eyes he cant afford to be nice anymore

[sangria]

That's right. It depends on your business. And your particular area. Many are seeing a 20-30% increase in revenue over the holidays.

[comokate]

I work in a dental clinic. "Biz" has been *way* down for the last 2 years...it's the same with every other clinic in the area. I know several nurses and have been told hospitals are continuing to lay off staff and patients are still canceling treatments...
no job=no money= health care benefits=no health care

The biggest expansion in our economy is the transfer of wealth from the middle and poor classes, to the upper 3%. Welcome to the two tier society.

[olderstill]

"The biggest expansion in our economy is the transfer of wealth from the middle and poor classes, to the upper 3%. Welcome to the two tier society."



You noticed that too, Kate? I've been working up an essay on the two-tiered arrangement which covers just about everything we do. I don't know which way the compass points. Is the 3% tier the "them's" or the "us's"? I know I'm not in the 3%, but I'd like to have the viewpoint correct in the references when the article surfaces.

[vl]

Likely... most municipalities will see a gutting of brand name seat warmers on councils and in offices. Newbies will be wise to terminate the administrative staffing and out-source to gain back control of the processes. Random pick legal advice crumbles the cracker barrel allowing new processes the chance to unwind, redefine and cause some to whine... which illuminates all interested and affected parties.
Almost every city in America lacks the ability to self-sustain, which is essential and far more critical than paying pensions to dysfunctional management. Taking care of your own doesn't mean getting your daughter-in-law a job in the Assessor's Department, it means being able to accommodate those who would be taxed to generate revenues.
In YOUR town... can you honestly say that a healthy portion of tax revenues comes from the citizens who live there or visitors? If it's just citizens, it evaporates with attrition. If you don't make something or have something outsiders want, you are doomed to fund duds who make much more than you and I without delivering results.

[olderstill]

"If you don't make something or have something outsiders want, you are doomed."


Same principle as exporting goods and importing profits in return. A solid platform!

[djrick]

I hope if history documents nothing about this crisis accurately, it at least captures the part where everyone in charge made the stupidest possible decisions for the worst possible reasons while the fate of the world hung in the balance.

I think post-Reagan privatization was mostly a label stuck to a giveaway of one sort of another. Either a sweetheart contract or a sweetheart sale of a state asset.

A society that has looting at the top and the insistence of economic morals at all other rungs ultimately falls apart. Simple human behavior.

[bga4444]

I agree with all of you! I am in Atlanta and the economy is in shreds. We will end up down double digits on two of the worse back to back years ever. Not much meat left on the bone. We have cut back (layed off) and scaled back(cut wages) for the last two years. We are still only hanging on by a thread. I heard this morning that Atlanta had the largest home values drop in the nation last month. All of the salesman that call on my store- North Atlanta very high end demographics, say that business is off 25-35% state wide. We just had the worse Oct. I have ever seen. Nov and Dec. not much better. The 99ers are falling through the cracks like ants. Wait till we have another three months and 6 or 8 million do not have that little unemployment check. You think things are bad now. The retail grocery stores are about to get hammered! They should have kept our lousy 2% and extended the 99ers! What a bunch of heartless no good jerks we have in Washington!

[kman]

Most of you know that I do manufacture a product. What concerns me now, is fuel price. One dollar a gallon more at the pump and it will be 09 all over again.

[The Virginian]

One dollar a gallon more at the pump and it will be 09 all over again.

Another round of QE and we will be there!

[wyouser]

forcasters would seem to indicate a $2.00 per gallon increase about half way into 2011

[comokate]

Here is an interactive map of the US showing, amongst other things, average weekly wages, consumer price indexes, mass layoffs, etc.
beta.bls.gov/maps/cew/us
The one state with a rise in employment ( a meager 1%) is North Dakota. I work with a woman who was born,raised and educated in that state. She left because, in her words, "the only thing that is there is farming, a few oil rigs, and the University of North Dakota". She doesn't know anyone her age or younger ( she is 45) that has stayed or plans to stay in the area.
There has been a "brain drain" ( educated young workers leaving for bigger metropolitan areas) going on for years. So...if you want to work on a farm and spend winters where blizzards are so common gates are installed on the freeways to literally close them down to traffic ( for those who don't understand winter storm warnings), North Dakota is your place to be!

[kman]

The moving around part is no surprise , for this country anyway. The U.S has always been somewhat nomadic when it comes to work. I have seen recently , that young people are leaving the country for opportunities in Asia.

ps, Love the snow!!!

[Aman A.K.A. Ahamburger]

The U.S has always been somewhat nomadic when it comes to work. I have seen recently , that young people are leaving the country for opportunities in Asia.

That's interesing. I brought up a point on a different thread about working in India..

ps, Love the snow!!!

How can't you!!!

[comokate]

Dec 29, 2010 21:02:41 GMT -5 kman said:

ps, Love the snow!!!

you're welcome to take as much as you want; we've got plenty to spare !

[kman]

Glad the stadium was empty. They should just play outdoors, like the good old days.

I hope business is improving for you kate.

Have plenty of snow...but thanks anyway. Took some kids sledding last weekend, that have never seen snow before.

[nicomachus]

This is an issue I am interested in because it pertains to the question of *subsidiarity.* To be brief: Economic stability requires that each function be managed and funded at the smallest (or "lower" or "more local") level possible. The fire department, if managed and funded from the federal level, would be very inefficient; the same, the local police departments could never be trusted to handle national defense.

Many states and other localities are going into what may turn out to be insurmountable deficits on account of the fact that the funding of public works is currently very redundant and ignores entirely the principle of subsidiarity. Because the federal government will naturally be less efficient at managing certain tasks, it has to collect additional taxes in order to operate; because taxation has a "breaking point," this means that localities and states must collect less in taxes. This means that programs that states and cities wish to fund will either be underfunded (we see in many states that libraries and museums are simply shutting down or else drastically reducing services; schools as well are suffering) or else borrow the funds from the federal government in an effort to avoid economic collapse. But once that federal government loans the money, there must be oversight, which just makes the project all the more expensive, until eventually it is decided it makes more sense to either federalize the program (which causes the right to scream "Socialism!") or else privatize it (which causes the left to scream "aristocracy!")

And then when federal budgets become too strained, we see the sort of local and state deficits which kicked off this discussion. In Europe, many nations are enacting the scarcity laws. This has met with some resistance, especially since decentralizing power is often messy, and even messier if the less central authorities are so strapped for cash that they have become dependent on the central authorities. Those who call for decreased spending here in the USA may be on to something, but the problem is that we are not a nation which is well suited to scarcity. Keep in mind, our rationing of food ended with the end of WW2; in the UK it continued for nearly 15 more years.

Comokate: Thank you for the link showing unemployment shifts on the map.

[DumDeeDoe]

The U.S has always been somewhat nomadic when it comes to work

Invest in Amerco tic: uhal....

Where I live over the last few years has spent 60 mill. on moving a baseball field,80 million on moving city hall, and 180 mill on a new events center.
All were bond issues,all were passed by a vote of the people. And 3 years later we are laying off cops and teachers. Making the firemen take a paycut, and the roads look like WW3 has hit town.
But I don't care because I got to see THE STONES live.....woot...

[DumDeeDoe]

O.. did I forget that we are 260mill. in the hole???

[bimetalaupt]

Kate,
There has been a "brain drain" ( educated young workers leaving for bigger metropolitan areas) going on for years. So...if you want to work on a farm and spend winters where blizzards are so common gates are installed on the freeways to literally close them down to traffic ( for those who don't understand winter storm warnings), North Dakota is your place to be!

Read more: notmsnmoney.proboards.com/index.cgi?board=moneytalk&action=display&thread=149#ixzz19eoFvHzP

I thought North Dakota was the only state with a bank.. Bank of North Dakota...which is the DBA for the State of North Dakota.. They are lending money for development of things like the Soo Line.. I also understand this is the direct line to the heartland of some unknown land to the north.. Great Rails are doing very well with summer wheat. Looks like we are going to feed the world again..

What is the latest on Wind Turbine energy up there? The new Nordic N1000 is made to handle the high winds with a direct drive vs other geared.. I also heard last year was a record year for deer and elk hunting in North Dakota!!

Just a few thoughts,
Bi Metal Au Pt

[djrick]

What killed California was pretending that they could afford whatever they wanted. Cost was no object. (Happening in other states too )

Throw every two-bit misdemeanor perp in jail for 10 years? No problem.

Give everyone who is old and/or disabled a free servant? No problem.

Subsidize insane infill developments? No problem.

Multi-million dollar pensions for UC execs? No Problem.

Million dollar salaries for leaders of corrupt little principalities like Bell? No Problem.

Music Therapy for prisoners? No problem.

$300K/year for prison shrinks? No Problem.

Dispatch $3 million worth of equipment and one two-man crew, one three-man crew, and one five-man crew all together, ALL AT ONCE to every medical emergency 911 call. 10 people for each call. No Problem!

And the list goes on and on and on. Sooo, who is going to pay?

[bga4444]

The "little" snowstorm here in Atlanta is estimated to cost government and business 300 million in lost revenue! I just have to shake my head. How much more of this can we take? The broke federal government wants the broke states to pay interest on the loans for the unemployment extensions! How? If one of us were as broke and owed as much as the governments no one on the planet would loan us a dime!