The folly and failure of spending every dime of other people’s money
Officials in Stockton said Tuesday that mediation with creditors has failed, meaning the city is set to become the largest American city ever to declare bankruptcy.
City Manager Bob Deis said officials were unable to reach a deal to restructure hundreds of millions of dollars of debt under a new state law designed to help municipalities avoid bankruptcy. […]
City officials say the city has run out of options. In recent years, thousands of new homes mushroomed in Stockton, part of a suburban housing boom that attracted buyers from the San Francisco Bay area and beyond.
When the economy crashed and the construction bubble burst, Stockton was battered by foreclosures and lost income from property taxes and other fees.
Multi-year labor contracts for city workers carrying escalating costs and generous retirement plans added to the burden.
In addition, expensive city investments — a promenade, sports arena and hotel — failed to produce an economic boon.
So “public” money poured into “investments” didn’t work? Who knew? Maybe they didn’t spend enough, hmm?
Paul Krugman, courtesy phone, Paul Krugman, white courtesy phone please.
Why do you hate public works Keynesianism, Darleen? Got something against Piss Christ too?
This article doesn’t even tote up the huge sums already expended in implementation, sums to be orphaned off into near meaninglessness should ObamaCare be overturned. Such are the rewards of electing imbeciles to high office.
– I had an Uncle and Aunt that lived in Stockton and I used to visit them from time to time some 35 years ago. It was a shithouse dump then, and I can’t imagine what it must be like now all these years later. Pouring other peoples money into a wasteland patchwork quilt of urban sprawl is right up the alley of the typical Krugman “take from the rich (and middle class mostely) and give to the people who can’t manage money worth a damn” bottom uppers.
– Someone should do a youtube with a Krugman look-alike babbling on and on about nannystate welfare, and while he’s talking a repro crew comes in and carries out all his office furniture leaving hin, still droaning on, sitting on an orange crate in an empty office. Forward!
…generous retirement plans added to the burden.
Why do you hate retirees, Darleen? Do you really want them to be sick and cold and hungry and alone?
And here we see what happens to unfunded liabilities that can’t be paid. They aren’t. Problem solved.
“White” courtesy phone? “White” courtesy phone????!!!!!!
You better denounce yourself before Krugman claims you attacked him.
In the past three years, officials in the city that was slammed by the collapse of the housing market dealt with $90 million in deficits through a series of drastic cuts.
They eliminated one-fourth of the city’s police officers, one-third of the fire staff, and 40 percent of all other employees. They also cut wages and medical benefits.
It would be instructive had the article noted how much the Stockton payrolls had bloated while the city supervisors were drunk on housing boom tax receipts. Also, it might be nice if anyone had noticed how many layoffs had befallen people in the private sector since the housing madness. But nooo, let us weep like widowed maidens for the public employees.
Stockton dug its own grave on this, just like the city of Bell.
BBH, likewise, I have been to Stockton a couple of times and it is a dump. If you like rodeo, go to the Cow Palace. Which is far away in San Francisco.
Liquidation is a healthy and necessary part of the market, or was until TBTF and the oligarchs came along.
Maybe this is why so much of the Left is hostile to religion. It isn’t so much that they care one way or the other about Heaven, but they have far too much invested in there not being a Hell.
Won’t be the last, or biggest.
Bell dug it’s own grave but also it was hit by it was struck by a smooth, albeit morbidly obese, criminal
Just an anecdote. About three years ago we were in Atascadero, California at a hotel. At some point for laughs we put on the public access channel and caught a city council deliberation over refinancing the city’s debts. It was simultaneously deadly dull and highly revealing. Some representative of a big financial firm (can’t recall the name) was presenting a plan to the city council on how, in essence, to play games with city property (the city hall) by selling it to some existing city authority and leasing it back to the city in turn. This would somehow, under existing Clownifornia laws, permit the city authority to borrow money for the purchase/leaseback scheme at a cheaper rate on account of the city’s power of taxation and without anyone’s permission, thus letting the city use the sale of the city hall proceeds to pay off more expensive debt and debt obligations coming up which the city had no money to meet. Naturally, the financial firm would get a commission for setting up this arrangement. But most crucially, if the city did this it would avoid having to go to the voters to approve more borrowing. Several ordinary citizens were at the meeting, and objected strongly to Atascadero borrowing even more money without voter approval. The city council seemed less than interested in this opinion.
And so we saw, in real time, how even the lowliest hayseed politicians in an aggie town share the cupidity and disdain for fiscal restraint we see in the most elevated urbanite dens of crony government, from Tammany Hall to DC.
George,
See also the recent shenanigans in Minneapolis, where they are giving City money to Ziggy & the Vikes for a new stadium against the express wishes of the residents of the city. In their case, they’re taking an existing revenue stream (for the Convention Center, IIRC) and “repurposing” it for a new Vikings stadium.
Because it’s not “new” money, they figure they don’t have to take it to a vote of the people. And the lawyers say they’re right. Well, not right, but legal.
It amazes me that pitchfork sales remain so slow. Amazes and saddens.
Bullwhips, crackers. Besides flaying flesh, the make a pleasing sound at the business end.
I think I see the problem: Stockton, California’s budget is racist.
They wanted their new stadium, and they got it. I doubt many here in MN were surprised.
Because it can’t stand to be in the <whisper> black </whisper>.