US will go broke with the collapse of the dollar.

Has the US reached the tipping pt. or can the can be kicked down the road.

***the poll should read purchasing power of the dollar.

http://www.nytimes.com/2012/03/11/nyregion/deficits-push-municipalities-to-desperation.html?hp

March 10, 2012
Deficits Push N.Y. Cities and Counties to Desperation
By DANNY HAKIM

ALBANY — It was not a good week for New York’s cities and counties.

On Monday, Rockland County sent a delegation to Albany to ask for the authority to close its widening budget deficit by issuing bonds backed by a sales tax increase.

On Tuesday, Suffolk County, one of the largest counties outside New York City, projected a $530 million deficit over a three-year period and declared a financial emergency. Its Long Island neighbor, Nassau County, is already so troubled that a state oversight board seized control of its finances last year.

And the city of Yonkers said its finances were in such dire straits that it had drafted Richard Ravitch, the former lieutenant governor, to help chart a way out.

Even as there are glimmers of a national economic recovery, cities and counties increasingly find themselves in the middle of a financial crisis. The problems are spreading as municipalities face a toxic mix of stresses that has been brewing for years, including soaring pension, Medicaid and retiree health care costs. And many have exhausted creative accounting maneuvers and one-time spending cuts or revenue-raisers to bail themselves out.

The problem has national echoes: Stockton, Calif., a city of almost 300,000, is teetering on the verge of bankruptcy. Jefferson County, Ala., made the biggest Chapter 9 bankruptcy filing in history in November and stopped paying its bondholders. In Rhode Island, the city of Central Falls declared bankruptcy last year, and the mayor of Providence, the state capital, has said his city is at risk as its money runs out.

New York City’s annual pension contributions have increased to $8 billion from $1.5 billion over the past decade.

“We really are up against it,” Mayor Michael R. Bloomberg said during a recent trip to Albany, urging the state to reduce pension benefits for future public employees. In a radio interview on Friday, Mr. Bloomberg noted the spreading financial woes of local governments, saying, “Towns and counties across the state are starting to have to make the real choices — fewer cops, fewer firefighters, slower ambulance response, less teachers in front of the classroom.”

And Thomas S. Richards, the mayor of Rochester, recently described a grim situation facing New York’s cities in testimony to the State Legislature, saying, “I fear that Rochester and other upstate cities are approaching the point of financial failure and an inevitable financial control board — as is the case in Buffalo — unless something is done now.”

The concerns of municipal officials are validated by the ratings agency Moody’s, which downgraded the debt of Rockland County and Utica last month, and Yonkers and Long Beach last year. New York is hardly alone, and certainly not the worst; for four straight years, Moody’s has had a negative outlook for the country’s local governments. And the problems are likely to persist.

“We expect that the pressure from fixed expenditures, and pensions in particular, will continue to be a strain,” said Geordie Thompson, a Moody’s analyst. “This is where the budgetary tradeoffs will continue to be difficult. There will have to be tradeoffs that will have to be made to make those payments.”

Pension costs are a particular problem. The stock market collapse of 2008 decimated public pension fund investments, and municipalities are now being asked for greater contributions to make up for the losses. The impact has been drastic: Three percent of New York property tax collections were used to pay pension costs in 2001; by 2015, pension costs are expected to eat up 35 percent of property tax collections.

Falling property values have also affected cities and towns because lower assessments hurt property tax collections.

The state is taking some steps to ease municipal burdens, but they come with risks. A relatively new plan allows municipalities to borrow from the state pension fund, with interest, a portion of their required contributions to the pension system.

“It’s the worst thing that you can do financially,” said Steve Bellone, the Suffolk County executive. “But when you are up against the wall and you have a county that has used every one-shot revenue that it can possibly use already, and you’re facing a deficit of huge proportions, suddenly that becomes not such a bad option.”

the financial tsunami is coming a la argentina while americans are in denial. 1st the state takes over the debt of the local gov't. then the federal gov't takes over the debt of the state gov't. then the federal gov't stops paying its suppliers and fudges inflation figures in order not to pay retirees their due. then the dollar collapses.
watch for the reelection of obama as further proof.

 

You're basing this thread on the financial troubles of a section of NY(whos high state income and high property taxes are so anti growth, then make a connection to the collapse of the U.S. dollar in general?


Too funny...

 

+ california + Illinois + rhode island + ...
tell me which states it doesn't apply
funny is your state of denial which undoubtedly will be mirrored others on ET.

 

are you asking if you should go long or short USD? If you beleive what you wrote just go short and then you can brag about it when it finally happens.

otherwise, what are you going to go short against? Gold? Crude? How much will a barrel of crude be worth if there is no dollar?

the one that cracks me up is the goldbugs who think after the fall they are going to be able to walk down to the hardware store with a bag of gold and buy a shovel.

Who the hell is going to be making shovels?

 

GB: see, here, i buy gold coins so when the shit hits the fan, I'd be able to buy ammo for my guns and canned food!!
ME: you know, it would be way cheaper to actually buy ammo and canned food now and store it some place safe...

 

Pensions for cities and states are unsustainable. I recently did a tax return for a retired firefighter and he's pulling in a 72k annual pension. Multiply that by every city/state employee and you are a recipe for disaster. My old man worked as a carpenter for 40+ years and his pension pays $18,000 per year. SS pays another 18,000 per year and his IRA provides the rest of his income. 18k per year is a reasonable pension. People need to take responsibility for their own retirement as my old man has. A 72k pension is absurd and unsustainable. In coming years these high pensions are going to have to be cut. Let the riots begin....

 

all these places in crisis have to do is cut their budgets and renegotiate with the unions.

The unions stole the money by buying of democrats... so now its time for them to give the money back.

No one really thought six figure retirements and bloated payrolls could last forever did they?

 

Never agreed more with a post on ET.

I mentioned the retired cop a few doors down before: 39 and retired! If he lives an average lifespan, he (or his do-nothing wife) will make more through his pension than he did through working! Outrageous.

 

Yep, both of you guys are spot on. Realistically, how many people are we paying for the same job? At some point, it might be 3-4 guys on the pension plus the active duty officer. Multiply that across the country and it becomes crystal clear that every other service has to be cut to the bone just to make the "payroll" each month.

Even though the day of reckoning for the public sector might be a way's off, in the interim all I see is the ratcheting up off various taxes (property and many others), plus cutbacks in services. This should also be factored into the "inflation debate". Namely, all the idiots who continue to claim there is no inflation.

 

Of course, you are correct, BUT just look at what these unions have been trying to do with Scott Walker. It's impossible to underestimate how many of the politicians have been bought and paid for by the unions.