Tuesday, August 7, 2012
Stockton, California Went Bankrupt. Is Your City Next?: Why People Should Pay For The Government They Need and No More
Stocton, California not a large city at least by American standards, this is not San Francisco, Los Angeles or New York or anywhere like that. But the largest city to date to file for bankruptcy, a city of roughly 300K people and this for lots of reasons. The "Great Recession" is certainly part of that, with the lost of jobs, Personal Income and Savings, resulting in falling Tax Revenue. Thats certainly a big part of that but what happened in Stocton, has happened to the State of California as a whole, which is Californians demanding more government then they are willing to pay for. This is a classic case of Borrow and Spend Economics, which is more common in the Federal Government. That politicians and others get what they see as the brilliant ideas and new ways to serve the people, with all of these new Public Services. But aren't willing to ask their Tax Payers to pay for them or if they even want them or need them. California is famous for referendums that they put on ballots demanding that the State Government provide these new Public Services. But they don't provide the State Government with the revenue to for it, which is part of the reason for their mountain of debt and deficits right now.
The good news is that there's a solution to all of this, its called Limited Government. Thats based around figuring out exactly what we need government to do for us, what it has the Constitutional as well as Legal Authority to do. How much will it cost and how do we raise the revenue to pay for it, which means we might not spend 40M$ on a new City Hall that we can't fill. Or 100M on a new arena we can't fill or paying Public Employees compensation and benefits that we can't afford or aren't willing to finance. All of these things that have happened to Stocton and are going on right now and as a result. Stocton is now laying off educators Emergency Managers, and cops all things that cities have to have to be a functioning city that people want to live in. I'm not saying that a Government Budget is the same as a Personal Budget but they do have similar principles. This is the money I have and this is what we can do with it and you pay for basic needs first.
A lot of Limited Government is based on Limited Resources, that there might be a mountain sized list of things that you want to do. But since you only have Limited Resources, you have to have a budget, so you know where you are financially and figure out what you have to pay for. Make those things as efficient as possible, which saves you money and once you take care of those things. If you have extra money you can look to finance things that you want to do.