Transfer of Unemployed to Social Security's Disability Program is Further Bankrupting California

Confounded Interest ^ | 09/30/2012 | Anthony B. Sanders

[whitedog57]

The latest California community to face bankruptcy is Atwater, just down the Golden State Highway from Modesto and next to Merced. Atwater, like its neighbors Modesto and Merced, are still reeling from the crash of the housing market where prices have fallen about 70% from their peak. And unemployment rates are roughly twice the national average.

Since I don’t have the house price indices for Modesto, Merced and Atwater, I will use the Case-Shiller Las Vegas house price index as a proxy.

Like many communities during the housing bubble, expenditures were made based on increased property tax revenue. When the housing bubble burst with a vengeance, the expenditures (buildings, salaries and pensions) remained and the revenues plunged leaving these communities with a fiscal nightmare.

Can these communities be salvaged? Of course, either new revenues have to be raised (taxes), budgets cuts (workforce and pensions) or a combination of both.

First, wages as a percentage of GDP has been falling since 1970. This does not bode well for supporting community budgets since housing recovery will be slowed by lower wage income.

Third, last week’s durable goods orders collapse was bad news for Q3 GDP. Collapses in consumer goods orders are associated with recessions.

While many communities weathered the fiscal storm of 2008-2010, the macro numbers for wages, employment and durable good production indicate that many communities will far further into fiscal trouble.

Add to these woes, The Obama Administration has taken people off of unemployment and put them into disability. Medicaid in California has grown $27.1 to $38.8 billion, an $11.7 billion increase over just the last five years. California’s fiscal condition is deteriorating before their eyes.

At least house prices have seemingly stabilized in much of the country which is good news for communities.

[whitedog57]

Outrageous. To pad the employment numbers, the Administration willingly bankrupts states and puts further stress on communities.

[WayneLusvardi]

The title of your article seems to have been plagiarized from this article:

“Obama’s Social Security Disability Policy Busting Calif. General Fund,” Calwatchdog.com, Sept. 28,

Link: http://www.calwatchdog.com/2012/09/28/obamas-social-security-disability-policy-busting-calif-general-fund/

Also title of your article does not match its content.

[House Atreides]

The title of your article seems to have been plagiarized from this article:
******************************************************************
And the calwatchdog.com author is a little pissed (justifiably so, IMHO) judging from the comment posted to the above linked article. The calwatchdog article you linked to was very interesting.

[twistedwrench]

Thanks for the link & Great article

TW

[E. Pluribus Unum]

Outrageous. To pad the employment numbers, the Administration willingly bankrupts states and puts further stress on communities.

It's almost as if he wants to "overwhelm the system," isn't it?

[ExSES]

It's almost as if he wants to "overwhelm the system," isn't it?

The playbook is followed throughout this "ruler's" realm!

The SHEEPLE.............. party on!

[Uncle Chip]

They are doing everything they can to keep from having to tap CalPERS -- the Fort Knox of California.

That's where all the money is.

[whitedog57]

I read through the original article and the author does link to the story. I would think you would be pleased that this guy referenced you and directed readers to read your excellent blog site.

Plagarism of a title? It isn’t even close. And the author points out that both state and local budgets are under stress.

You seem to be very thin skinned and more concerned about your title than the message.

That is pretty creepy.