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OT: Municipal Financial Health?

san_jose_guy

money was invented for handing to women, but buying dances is a chump's game

OT: Calpers, the state retirement program.

I don't really understand all this.

https://en.wikipedia.org/wiki/CalPERS

San Jose has been in dire financial straights for a couple of decades now. Part of it is retirement costs. But in my view it is also Proposition 13, letting residential property prices separate from property taxes. And then also it is Re-Development, sucking up taxpayer money, and then putting it into things which largely generate private profit.

And usually the idea in Re-Development was that you could stimulate profits by making new buildings. But mostly all it amounted to was trying to run out poor people.

And then the idea was that you keep supplementing private interests on the idea that eventually the whole endeavor will go into black inc. Mostly it never did.

San Jose is more residential than industrial buildings, and prop 13 has taken a deeper long term hit. Some other cities in the other area are the opposite.

But now even many of the smaller cities are seeing budget projections going into the red in the coming years, and this is in Dougster's boom.

Some of it I guess is an increasing number of retirees per active municipal worker. I guess this means a stabilizing city gov't and population size, where as before it all ran on open ended growth.

Now there is also a longer life expectancy.

I have always laughed at Orange County, making their own mutual fund, and then when it collapsed in 1994, the county filed for bankruptcy. All funny money, all flim flam, all gov't going into neoliberal territory.

But now I see that the entire state's public pension program is something like this, depending on investment return, and being now below expectations, that being a big part of the problem.

Our whole society, committed to Dougster's speculation economy? Not good!

So when cities start to feel scared, they could try to cut back on services and costs, and as people say, "When you find yourself in a hole, the first thing to do is stop digging." And more often than not this is those on the Left.

And then the other way is the neoliberal way, "We need to find new sources of revenue." And so no it is not upper income taxes. Sometimes it is fees and other regressive taxes. But most of the time it is the city engaging in boosting , branding, "Capital of Silicon Valley", and in general promoting insanity. Usually there are multiple levels of anti-gravity upwards wealth siphons at work in it too.

Someone has written a book about this and usually it comes down to excessive city spending, promoting construction booms, and sometimes even putting public money into real estate bubbles.

And so some of the cities are going this way. Some is the legacy of the 2008 bust, but it is also these pension tightening problems, and then also the effects of this neoliberalism.

See, they get stuff built, by committing to continual boosting and continual growth. So people build stuff which is financially maginal at best, because they are expecting more things to be built which will let their project turn the corner. This is very risky.

In Texas in the 80's there was an over building of glass box office space. When this crashed the developers failed and then so did the lending institutions. Feds had to bail out account holders.

Remember Neil Bush and Silverado Savings and Loan?

Bill and Hillary Clinton and Whitewater Savings and Loan?

Charles Keating and the Senator from California Alan Cranston, and Lincoln Savings and Loan?

When you have this over building and it busts, then you have zero construction and the labor market clogs up with these jobless construction workers, and then you have a general collapse which can go on for a decade. The bigger the construction bubble, the longer and deeper the bust.

So to me,. construction binges do not seem like a good idea.

But some in local government see lots of empty retail buildings, and they figure that they can create retail jobs simply by making more empty buildings.

And it might look like it works, as the new developers do get tenants, but it looks like they are under pricing to get this. It is not just that they are under market. Rather, they are under their own breakeven prices. So the developer is still bleeding money.

And why would a supposedly competent developer do this? They do it because local government has convinced them that they are on their side and will keep boosting and keep the construction binge going.

These sorts are more the conservatives, or those on the Right. But what they are doing is very dangerous.

One guy said at a city council meeting, "Keep the new construction going, because that is how we all make money, and this is what we are all here for."

Well, I don't think most of the voters would agree with that. But the real estate industry would. And they exert lots of influence in cities. And so you find cities engaging in propaganda campaigns, insisting on trying to use taxpayer monies and taxpayer properties to try and influence the thinking of the taxpayers.

And then, starting to get some experience reading city budgets, we listen to them saying that the city will go into red ink in a few years, but they are still showing increasing FTE's ( full time equivalents ) and increasing budgets overall.

So let me say, that though I have looked at these sorts of things for a long time, much of it is still over my head, and I do not claim to understand that much of it.

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Let me say that in the organization I am building, these problems should be non-existent.

1. Outer order members pay us dues, they get lots of career advancement help, and their lifestyle expenses come way down, as they are getting unlimited free pussy. Otherwise their finances and ours do not touch.

2. Some people want money and power ( like ME ). We will help them start their own companies. Their money, their equity, but our services and expertise, and we make it work for them.

3. Some will go for the inner order. So long as they stay in, they get some spending money, but really they don't even need that. Work, Study, Get their Cock Sucked and Ridden, 365 days per year. What could be simpler?

Living communally where you don't need to keep up with the Jonses, is cheap.

Where as paying pensions for people to live market rate is very expensive.

And of course we will use whatever we have available as our Universal Health Care or Socialized Medicine. And we will fight for a 100% cradle to grave welfare state. But for ourselves we should have a radically better situation. We live communally, the inner order.

Those who opt to leave have stock in our companies. The women get 4x what the men do. But there is no guarantee and these are individual holdings. People get what they get.

But we hope most of the people stay, as then their shares go into a fund which builds are larger and fancier residence halls.

When you are communal, you don't have to buy your social legitimacy, and that plus the direct saving of communalism, plus our people's lifestyle differences and high level of education and intelligence are what make it work.

And again, we fight politically for a universal welfare state. But for ourselves, we should be doing extremely well anyway.

SJG