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Comment by lkrubner | Hacker News Reader

I think this article has a good summary of cutbacks that are happening due to the recession. However, the article makes no attempt to tease apart what effects might be due to the recession, and what effects might be permanent. The long series of stories about local governments is interesting - I'm intrigued by what people cut back on when they run out of money. There is no question that this is the most serious recession in living memory, in the US. As such, the recession deserves a lot of attention. But it is a leap to go from "Some town in Ohio had to layoff several police officiers" to "This means the US is finished forever." (I am making up exaggerated quotes, which I think summarize the gist of the article.)

It is possible that the US is finished forever, but there is nothing in this article that convinces me.

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How many of these cutbacks SHOULD have been done before hand and are now forced to happen because of the recession.

Laying off police officers.. Good idea - They probably don't provide enough to be worth their pay over a certain point.

Maybe being forced to fill less pot holes will encourage us to come up with cheaper ways to do the job.

Perhaps if we cut back on teachers and educational spending we'll be able to do more with less... Money isn't the problem in education... if it was then we wouldn't have this data mashup: http://www.datamasher.org/mash-ups/spent-student-and-sat-sco... - It looks like spending more money per student isn't working.

Thinking that cutting back = massive failure is why most American's have massive amounts of personal debt that they will never get out of.

I've been thinking along these same lines for years now. Much of America's civic and business institutions are/were built and financed assuming eternal growth economics to support them.

It isn't the recession itself destroying these budgets. It's the recession causing an honest assessment of recent and future growth and calling into question the feasibility of old debts, old promises, ways of life taken for granted, assumptions that drive the very basis of our society. (growth=success, bigger=better)

Granted, I live in Michigan, where we've been given a free preview of waking up to the cold realities of sprawl economics juxtaposed with a debt load based on eternal-growth expectations.

So I can understand why most people will experience a few years of denial, cherry-picking 'evidence' from an ever-shrinking number of still-growing cities to prop up their pre-existing world view. I did the same thing. I get it.

But when the evidence is finally at your door-step, utterly unavoidable, you'll realize it isn't a left vs right issue, or a government vs business issue. But an American lifestyle vs reality issue.

Waking up to this is going to be painful.

It's also not even clear they need to cut back on services.

Take Flint, for example. Instead of cutting 23 of 88 firefighters, why not keep them all but reduce their compensation by 26%? It's Flint Michigan, they don't exactly have other employment options. Besides, it's unlikely Flint even needs that many firefighters - their population dropped by about 10% since 2000.

The same could be done for teachers - NYC pays entry level teachers roughly the same salary as entry level engineers (total comp per month worked, not per calendar year). Rather than laying them off, why not cut their comp down to liberal arts grad entry level?

[edit: replaced word "pay" in second paragraph with "compensation". Thanks chrisbolt.]

The answer to your rhetorical questions is politically powerful public employee unions. Only a small minority of the members of the union got laid off, so they'd have to be okay with making the sacrifice to keep those people employed. They could fill those jobs at significantly lower salaries, but that factor never enters the equation.

Employees cost a company more than just pay, such as insurance, etc. You'd have to take into account the full cost of an employee.

Lol... ok so... at what point---oh wise one---do police pay become worth? Because the article speak of basically few officers and no detectives. And what happens if we don't find a better way to fill the holes?

The reason why USA has no money is because you keep cutting the taxes for the richest people and going to wars that you've got no money for... and when finally the shit hit the fan you had to throw money after bankers and companies.

This process usually takes two phases: phase 1, during a boom: "We've got plenty of money, let's cut some taxes" phase 2, during the crisis: "We've got no money left, let's cut some services"

I don't think you get the point. We haven't even experimented or tried to do more with less. The U.S. philosophy has been so based around throwing money at a problem that we never consider whether we are spending to much until now.

When we have some states and local governments getting tot he point where they must shut down nearly all services the problem isn't money. The problem is they didn't reduce expenditures sooner. The problem is they run fiscally irresponsibly budgets with massive debts.

Bailing out banks and companies - A terrible idea. Cutting taxes - I'm pretty much in favor of this for everyone - especially since those top 5% of earners end up paying 70+ % of the total income tax. But that's not the point here. The point is that we HAVE to figure out how to spend less. Spending the same amount of money when you make half isn't an acceptable strategy.

Your figures are quite off.

The mood of this thread suggests I will be modded down but: 1) How much is the real tax on the top 5%? 2) How much of the national income do the top 5% of earners make? 3) How much of the income do they make because of the unique situation they find themselves in the USA?

A wiki-search revealed the following: In 2007, the top 5% of income earners paid over half of the federal income tax revenue.[36] However, as of 2004, the top 5% hold 59.2% of wealth. The top 1% of income earners paid 25% of the total income tax revenue.[37] Again however, the top 1% hold 23.5% of wealth. Forty seven percent of Americans pay no federal income tax.

(The 47% thing includes children / housewives / househusbands / etc.., hence it holds no interest to me as a figure. That said, you're welcome to try to change my mind).

The rich are paying a fair share, especially considering how difficult it is to accomplish the same task outside the US.

Obviously it's not a good idea. But I would imagine that the answer if you can't fill your pot holes is to raise taxes, not hope that the future will bring something better.

If during a boom you've cut taxes, why now that money is needed shouldn't you raise them again? Didn't Clinton leave office with a surplus? So if at that time you had a balanced budget, and now you can't even pay to fill your pot holes, and one of the reason is because of your massive cuts in taxes... wouldn't that suggest that to fix you books you need to raise them again?

Didn't Clinton leave office with a surplus?

No.

http://research.stlouisfed.org/fred2/graph/?chart_type=line&...

Oh, you should fix wikipedia then: http://en.wikipedia.org/wiki/Bill_Clinton

which is based on this: http://www.cbo.gov/budget/data/historical.pdf

as confirmed by factcheck.org: http://www.factcheck.org/askfactcheck/during_the_clinton_adm...

Actually this was (from the site you linked) show positive saving too (though I am not sure if it's relevant): http://research.stlouisfed.org/fred2/graph/?chart_type=line&...

Could it be because you sent data for gross change in debt? Or maybe because those numbers include the extra interest rate paid by the debt (i.e. the government started saving, but the debt was so huge that the extra interests from the previous year compensated for it?).

Dunno, I am just trying to put the two pictures together.

That's debt held by the public, i.e. bonds. A lot of the debt is owed to old people through the SS system rather than to bondholders through the treasury.

Obviously one can debate the exact definitions of what should constitute debt, but I'm using the following definition: promises to pay out money in the future which will be politically very difficult to renege on.

If you want to look at debt held by the public, Bush had surpluses too (though not as large).

http://research.stlouisfed.org/fred2/graph/?chart_type=line&...

Yesterday, there was a news coverage on the 2 year aftermath from Lehman Brothers collapse. The New York Time reporter Andrew Ross Sorkin predicted in the interview the next wave of collapse will be governments, like Greece and possibly states like California.

I was a little bit surprised to hear such a strong opinion. It is clear the federal reserves do have now better tools to avoid private institution collapse which could have severe impact on the economy. On a bigger scale, like states it seems not all that clear what regulation mechanism are available. But reading repeatedly the warning signs from several known analysts about the debt issue and upcoming correction I am wondering if such collapse scenarios will take place.

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