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
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Excellent!,if we keep this up for a few years will will then have the amount of government and the amount employees that are truly needed.
Good conclusions Mac. Funny, I just said more or less the same thing in another posting here on this website. I share the same fear that the government will take what should be a normal deflationary depression and transform it into something much worse – a hyper-inflationary depression. And then when the world has had enough it will get even worse when we have a currency collapse and then it’s anyone’s guess what the hell happens.
“…the government will stop at nothing to keep kicking the can down the road.”
It is the Keynesian way. Government will always to what benefits government the most, however, what they don’t realize is that in the end, it will kill them. I mean that in the literal sense. The path they are taking has an end to it. Instead of the end being rough and hurting when we take our lumps, they, they Keynsian people that have screwed up the whole thing, will take the lumps via bullets, ropes, torches, pitchforks, ball bats, tar, feathers, you name it.
I shall watch this with great interest as the entire system that I loath burns to the ground. I shall then assist in the rebuilding of the American System that used to be before it was hijacked by the banksters and elites. Here is what happened:
http://gotfr.com/confessions.html
When we have a currency collapse, and I do not believe it eminant, but “pre-packaged” for a later date, the new world currency will be implemented for every nation through the G-20. Russia and China and India, and Middle East Nations are planning for this by buying gold; lots and lots and lots of gold to catch up with the all the gold the USA owns.
When you see the major banksters switch to gold, and gold mining stocks for their own portfolio, you know the hammer is coming down because they will control the means of real wealth production: precious metal production, in the New World Order.
Of course the Congressmen and Senators will take voluntary pay cuts to share the pain with their fellow “workers”. And they’ll cut some of their fringe benefits like free food, free booze, free limos and flight services, free mail, free haircuts, a free muli-million dollar gym built specially for them only, free special police protection, the greatest free medical plan on the face of the Earth, a free life time pension, and all the bribes and kick-backs (oops, I mean “campaign contributions”) and all the willing poontang (male, female, and whatever…shudder) that they want………………..Yeah, thats gonna happen…NOT.
Comments…..This may seem like a great solution but it does have some shortcomings. Likely the Sheriff’s Office will hire a good portion of the laid off officers.Â
The real problem is that when contracting, nobody wants to cut the level of service so the savings are quite small. In a year or two the contracted agencies will simply raise their prices and the city will be back at the starting point, but in a tough spot. They will have to meet the price expectations of the Sheriff and other city doing their admin work or close shop.
A better solution with long-term benefits would be to form a taxing district to take care of water and sewer needs and then give up the status of ‘city’ which would eliminate all city taxes. The County, which everyone already pays into would pick up the law enforcement, zoning, etc. In other words, the city would be like the rest of the unincorporated county.
How do you spell……….DOOMED
Comments…..keep people working but reduce
wages/benefits / hours?