Yesterday we brought to your attention that we can Expect 2 Million Layoffs By State and Local Governments. Well, it didn’t take long. The city of Maywood, CA has announced that it will be laying off most of its city staff (around 100 workers), including the police deparment and contract that work out to other cities:

The city of Maywood will lay off all city employees and begin contracting police services with the Los Angeles County Sheriff’s Department effective July 1, officials said.

In addition to contracting with the Sheriff’s Department, the Maywood City Council voted unanimously Monday night to lay off an estimated 100 employees and contract with neighboring Bell, which will handle other city services such as finance, records management, parks and recreation, street maintenance and others. Maywood will be billed about $50,833 monthly, which officials said will save $164,375 annually.

“We will become 100% a contracted city,” said Angela Spaccia, Maywood’s interim city manager.

That’s 100 confirmed so far – 1,999,900 more to go. For those who doubt this number, consider President Obama’s most recent bailout announcement of $50 billion to save the jobs of police, firefighters and teachers. Here’s a basic calculation:

2,000,000 workers  TIMES  about $20 per hour TIMES 40 hours per week EQUALS = $1.6 Billion per week.

We realize that most government workers make more than $20 in direct pay plus benefits, but to keep it simple we wanted to underestimate a little bit.

The $50 billion stimulus/bailout package proposed by the president would provide a 31 week extension for those 2 million workers who would need to be let go.

We’ve pointed out previously that the government is the major unknown variable here. Free market economics are trying to force equilibrium by cleaning out bad debt from the system, but governments are doing everything they can to keep this from happening. “Deflation” can be seen everywhere, including in wages and employment. To counteract this effect governments are doing everything they can to induce the opposite. This means free money via more printing.

We believe that while credit destruction must take place and bad debt must be cleared from the system, the government will stop at nothing to keep kicking the can down the road. Expect more intervention in weeks, months and years to come.

A stimulus/bailout such as the $50 billion proposed by the President will be money that is directly injected into the economy. There will be similar proposals in the future, and Congress will likely rubber stamp everything that is asked of them by the powers that be. Eventually, all of this extra money into the system will be chasing the same goods, leading to price inflation, namely in commodity related assets like food and energy.

Hat tip Wheedle