The US is Already Dying

[dogcom]

The US is already dying from its debt loads.
http://www.infowars.com/these-12-hel...ook-like-soon/

ttp://www.allvoices.com/contributed-news/12570369-vp-bidens-hometown-bankrupt-mayor-cuts-city-workers-pay-to-minimum-wage

Police pay cut to minimum wage in Scranton, PA

We don't need to wait for the US federal debt to blow up like Europe because many places in the US are already coming apart.

I think the provinces and cities in Canada need to wake up now and take action before we end up down the same path. Eventually high paid government workers will end up with the opposite of what they have if they don't fight back as well. This means they should take the lead in asking CEO's, high paid executives, hockey players and so on to far less money and in doing so cutting their pay and benefits to really take a dent out of our debts and deficits. The pay cut from the high paid people should take the form of straight deficit reduction meaning that shareholders wouldn't get this money either.

So the whole country should be up for the fight and not just wait until it is to late and expect it all to come out of government workers while no one else shares the pain. So if government workers don't want a huge benefit and pay cut down the road they should help to fight now to save our cities and provinces from their debts and deficits.

[Cal]

I think our gov't is already beginning their austerity measures....In Ontario there have been welfare cuts, MD cuts, and I believe social servants and teachers negotiations are up next.

[dogcom]

They never seem to be able to hold the line on the government workers as long as there is money to borrow and spend. At the same time however like I said it shouldn't be all about them and everybody should be involved in taking some pain.

We are doing better but I don't think it is enough and we should go much farther and keep Canada strong into the future. It wouldn't take much of a rise in interest rates to put us over a barrel as well so why now act before it is to late and we get knocked down with everyone else.

[Daniel A.]

Cities and municipalities are governed by the provinces, here in BC if they want money they need to go to their only tax base the people.
Many towns and cities are already carrying debt on the books that can only be covered by property taxes.

The balancing act can be very tricky, just look at the have and have not provinces.
As can been seen with stock markets falling due to what is going on in the EU throw the USA into the mix and we already have a large problem.
At least our financial systems are far more solid than the USA.

Provinces must get control of their spending I agree but some will be impacted more than others ie Ontario with its manufacturing base which has been under great pressure for a number of years.

[dogcom]

Property taxes are getting to high is another problem and reason for wanting to lower the high wages of city workers to slow this rise in taxes.

I just think for once we get it under control well before it becomes a big problem instead of patting ourselves on the back about the good job we have done in the past.

[Sampson]

Property taxes are getting to high is another problem

Property taxes are not 'too high' in Calgary.

We pay only about 2.3% of gross income towards our property taxes. This is on property worth about 5X our gross income. Pretty reasonable, and our city isn't broke.

Taxes are expected to rise upwards of 10-15% over then next few years, well within the realm of acceptable by my standards.

[Spidey]

From what I gather there is quite a disconnect between public fiscal health and business fiscal health in the US. While public balance sheets are awash with debt, businesses are generally in excellent shape and have good cash balances.

Apparently, despite the US's free enterprise reputation, some US municipalities have been even more hogtied by union contracts than here in Canada. I was watching a piece where the police/firemen pensions in many California municipalities are totally unsustainable and sometimes pay out far more than they earned while employed. This was due to a municipal bidding war to attract such personnel a few years back. The only solution is to break these contracts, which may be unfair on one level, but on another, I don't see why a certain bunch of boneheaded politicians should have the power to punish the citizens and wreck the local economy in perpetuity.

I've also heard that unlike countries such as Greece, the US has the tools to solve much of the problem - it is just a matter of conquering the political side of the issue. For one example, the US is one of the few modern countries without an effective VAT style tax.

[HaroldCrump]

The issue with US cities and municipalities has been a classic "pension ponzi".
Over the years, city/municipal governments made outrageous promises of post-retirement pensions, benefits, health care coverage, etc. without having a care in the world how they would meet these OBL liabilities in the future.
The unions played their part in arm twisting, blackmailing and coercing the city governments into these contracts.

The 2008 recession has surfaced all those underlying problems at all once - it has been a perfect storm for these small towns and cities.
Most of them do not have any significant source of revenue other than property taxes - and we can all imagine what has happened to property tax collections since 2008.

As for similar Canadian towns and cities, we are not too far off.
In fact, many of our union contracts are far more generous than the US ones.
One area where we differ significantly is post-retirement health coverage.
Because of socialized health care, the individual municipalities don't have to bear that huge burden.

The other aspect in which we differ is the real estate base - our RE has not crashed (yet).

Just for the sake of it, account for a 40% - 50% decline in residential and commercial RE valuations coast-to-coast, and factor in the corresponding impact to property taxes, income taxes, etc. and let's see how many Canadian towns, cities and small municipalities meet the same fate as their US cousins.

[LondonHomes]

Police pay cut to minimum wage in Scranton, PA

Well that is a straight line to having a corrupt police department.

[HaroldCrump]

Well that is a straight line to having a corrupt police department.

You mean more corrupt than they already are?