A third California city has declared bankruptcy:
The California city of San Bernardino has filed for bankruptcy protection amid a $46m (£30m) budget deficit and ongoing criminal investigations.
The city listed assets and debts of over $1bn, court documents show, and becomes the third in the state to go bust in just over one month.
When the previous California city declared bankruptcy I was expecting more to follow (although not quite this soon). This is the only possible result of following Keynesian economic ideas. One cannot spent themselves back to prosperity.
Savings are resources that have been set aside for future use. What’s being spent today isn’t actual savings, we’re not spending saved up resources, we’re spending nonexistent resources. One of the failures of Keynesianism is believing savings are bad for the economy. When somebody saves they are foregoing current consumption for future consumption. A city may save in order to buildup enough resources to construct a community center or a road. The key is that resources need to be available in order to do either, something debt spending doesn’t do. Eventually the shortage of resources, that is the misallocation of resources, catches up and people quickly find out that they don’t have enough resources to complete projects. Towns find themselves unable to afford finishing the new community center or road.
We will see more and more stories like this as more and more municipalities collide head on with the reality that there aren’t enough available resources to continue existing projects.
Well at this rate the entire state will be bankrupt (legally speaking) in a year or two. So much for the world’s 7th largest economy.
Down, down, down they go. I say, when the chaos really gets going, we might want to get some land in, say, Utah, and just… secede. Quietly. Start building a free society built on private property and voluntary interaction.
@zerg539 – Isn’t funny how much larger economies look when you artificially inflate the numbers?
@Matt – That’s more or less what the idea behind agorism is. You simply start ignoring the state and living your life as you choose.
@Chris – True, but the full idea of agorism always seems to include mutualist baggage that I don’t agree with. Above all, I want a voluntary society, so they can do what they want, but there is that bit where “I’m an agorist” includes a lot of bad ideas Konkin included in his writing.
I know many people try to tie specific ideologies to agorism but, ultimately, counter-economics is supposed to be the act of performing voluntary transactions with individuals and that means only the involved individuals have any say in how the transactions are performed.
Some people want to have small communistic groups, others mutualistic groups, others capitalistic groups, etc. Advocates of any economic system often attempt to tie their ideology to agorism, I prefer to divorce economic ideology from the act of counter-economics. Let the communists be communists, let the mutualists be mutualizes, and let the capitalist be capitalists so long as they’re not trying to use force to put their ideologies onto others. That’s the general attitude shared by the agorists I hang out with.
“I prefer to divorce economic ideology from the act of counter-economics”
As do I. I can agree with this.
Although, I would point out that, while one can set up a communist or mutualist group within a system that recognizes property rights on everything – the reverse is not true. If property rights on all property – whether you make a computer, a house, or a factory line – are not recognized, capitalism cannot exist, and neither can truly voluntary interaction.
That’s why I tell my anti-private-property friends that they’re free to do with their resources as they want but if they try to take my shit it’ll make for some unhappy times.