June 16 (Bloomberg) -- The city of San Diego should consider Chapter 9 municipal bankruptcy to help it reduce fringe benefits, pension and health obligations.
Thatís one of the suggestions made by the San Diego County Grand Jury, which does the normal duties of recommending indictments as well as reporting on local governments and special districts.
It would be fun to have a way to bet on whether Los Angeles or San Diego will file for bankruptcy first. Will Antioch California or Miami Florida beat them to the punch?
I see this as inevitable. The younger generations in California will have much lower earning power. High school drop-outs can't maintain a society as technologically advanced and productive as the society that made high wages for government employees possible. California is a shadow of its former self. Something has to give. With much fewer net taxpayers in future generations government's reach has got to pull back to more modest goals that fit with much more modest means. The last generation of white civil service workers will feel screwed up this process. But they did nothing to stop the processes that will seal their fate. The die is cast. Empires rise and fall and California is no exception. Neither is Texas. The nation as a whole is going to have to start thinking about the need to scale down the number of people in the military.
Demographics and huge pension burdens already spell financial armageddon. But wait. there's more. The 2010s are going to be an era of intense shocks. Better to mentally accept the changes now so that you do not feel psychologically shocked as you navigate thru what is in store. My advice: Adjust to what's coming before circumstances force change. If you change jobs, careers, move, lower your living standard or make other changes before forced to do so you can make these changes with less stress, less of a feeling of loss, and with much better outcomes from each change. Change from a position of strength rather than wait till you have to change from a position of weakness.
|Share |||By Randall Parker at 2010 June 16 08:00 PM Economics Sovereign Crises|