A Look at Things to Come

Another United States city has declared bankruptcy:

The Californian city of Stockton is set to become the largest US city to declare bankruptcy.

Mayor Ann Johnston told the city council which endorsed the move it was “the most difficult and heart-wrenching decision” they had ever faced.

But she said it had to be done to begin the recovery process.

The river port city of 290,000 – which lies 90 miles (144km) east of San Francisco – suffered badly during the US housing market crash.

Filing for Chapter 9 bankruptcy protection would allow the city to hold some of its creditors at bay while still paying for basic services like its police and fire department.

I think we’re going to see more and more cities declaring bankruptcy in the future. Cities, like the federal government and the governments of the individual states, decide it would be a good idea to give people “free” shit. What none of the mentioned governments appear to understand is that there is no such thing as “free” shit, eventually all those trains, buses, art museums, etc. have to be paid for.

Whether the work is done by private entities or state owned entities is irrelevant, employees of both want to get paid. If you don’t pay the private entities they will likely sue the city to recover the costs and if you don’t pay public employees they’re likely to stop working all together.

Isn’t everybody happy that the government listened to Paul Krugman:

To fight this recession the Fed needs more than a snapback; it needs soaring household spending to offset moribund business investment. And to do that, as Paul McCulley of Pimco put it, Alan Greenspan needs to create a housing bubble to replace the Nasdaq bubble.

Is there any wonder why I consider Krugman to be a complete idiot when it comes to economics?