4 ms·

We are about to learn a lot about which local economic policies work and which do not.

atmosx 6y ago
The US has a banking system, plus the FED understands what it means for a state to go burst... they won’t allow it. Europeans on the other hand, are ruled by semi-retards who believe that following the random rules made by someone 30 years ago, will save them from what is coming. It would funny if it wasn’t so tragic to be honest.
somewhereoutth 6y ago
I don't think this can be fixed by local economic policies. It will take a national effort, a new New Deal.
- unionpivo 6y ago
  "New Deal" thats the old deal. The new deal is "Don't be poor"
- mas3god 6y ago
  With what money? Printing more would ensure currency debasement. You really think inflation is less than 2%?
  - claydavisss 6y ago
    Without a Federal effort, people will just move in order to avoid the local taxation required to sustain cities and states. For those in the California cities, the triple whammy of city budgets, CalPERs, and fire recovery will only be solved by huge tax increases.
  - svachalek 6y ago
    The Fed has changed policy, 2% is not a maximum anymore. With as much government debt as we have now, inflating it away is the only realistic way to get rid of it.
    - throwaway0a5e 6y ago
      Private debt is subject to inflation too.
      - svachalek 6y ago
        What does private debt have to do with Fed policy?
        throwaway0a5e 6y ago
        Higher inflation reduces debt over time. You take on a mortgage and 10yr later paying it is cake because the debt doesn't track inflation whereas your pay does.
        Jarwain 6y ago
        That's only true if inflation is higher than the interest on your debt though, right?
  - gridlockd 6y ago
    > Printing more would ensure currency debasement. Lot of countries around the world intentionally debase their currency to stay competitive. It's a valid monetary instrument. In the short term, currency debasement would lower the standard of living of Americans, but it would make their labor competitive.
    - mas3god 6y ago
      Agreed
  - somewhereoutth 6y ago
    Money is just a mechanism for resource allocation - there are many unemployed people, and there is much infrastructure that needs fixing (not just physical infrastructure, but also social infrastructure). Let's allocate those resources, through government direction if necessary, and sort out the money stuff later.
jjoonathan 6y ago
Spoilers: the policy of having rich people in your locale will work and the policy of having poor people in your locale will not.
- blululu 6y ago
  This is not guaranteed. Recall that in the 90’s Orange County - then a relatively affluent region - had to declare bankruptcy. Just because there are people who could foot the bill, does not mean that they will. If the surplus of wealth is in a community consumed by an inefficient urban structure then a financial crisis will arise just the same. In a lot of suburban areas the density is such that the infrastructure costs more and the property value is lower (on a per lot basis). The end result is that a lot of the wealthy suburbs will go broke. https://www.strongtowns.org/journal/2018/9/5/but-rich-people-live-here-so-we-cant-be-going-broke https://www.strongtowns.org/journal/2018/9/5/but-rich-people...
  - bilbo0s 6y ago
    In a lot of suburban areas the density is such that the infrastructure costs more and the property value is lower (on a per lot basis). The end result is that a lot of the wealthy suburbs will go broke. If a suburb or ex-urb's liabilities exceed their assets, weren't they already broke? I'm trying to understand because I don't know a lot about this whole issue. But unless they charge people a whole lot in taxes to live in those areas, I'm not seeing how those places weren't poor in reality from the start? It seems to me those suburbs just managed to have other people pay for their infrastructure and services for so long that they never realized they were broke. But maybe there is some other source of money that they get from somewhere?
    - hiram112 6y ago
      Most localities sell bonds, backed up by promise of future tax revenue. Eventually their bonds are downgraded and they have to pay higher and higher interest rates. Finally, the math comes crashing down and the game is over when the market has no more appetite for the bonds and the state and feds won't backstop them.

The US has a banking system, plus the FED understands what it means for a state to go burst... they won’t allow it. Europeans on the other hand, are ruled by semi-retards who believe that following the random rules made by someone 30 years ago, will save them from what is coming. It would funny if it wasn’t so tragic to be honest.

somewhereoutth 6y ago

I don't think this can be fixed by local economic policies. It will take a national effort, a new New Deal.

unionpivo 6y ago
"New Deal" thats the old deal. The new deal is "Don't be poor"
mas3god 6y ago
With what money? Printing more would ensure currency debasement. You really think inflation is less than 2%?
- claydavisss 6y ago
  Without a Federal effort, people will just move in order to avoid the local taxation required to sustain cities and states. For those in the California cities, the triple whammy of city budgets, CalPERs, and fire recovery will only be solved by huge tax increases.
- svachalek 6y ago
  The Fed has changed policy, 2% is not a maximum anymore. With as much government debt as we have now, inflating it away is the only realistic way to get rid of it.
  - throwaway0a5e 6y ago
    Private debt is subject to inflation too.
    - svachalek 6y ago
      What does private debt have to do with Fed policy?
      - throwaway0a5e 6y ago
        Higher inflation reduces debt over time. You take on a mortgage and 10yr later paying it is cake because the debt doesn't track inflation whereas your pay does.
        Jarwain 6y ago
        That's only true if inflation is higher than the interest on your debt though, right?
- gridlockd 6y ago
  > Printing more would ensure currency debasement. Lot of countries around the world intentionally debase their currency to stay competitive. It's a valid monetary instrument. In the short term, currency debasement would lower the standard of living of Americans, but it would make their labor competitive.
  - mas3god 6y ago
    Agreed
- somewhereoutth 6y ago
  Money is just a mechanism for resource allocation - there are many unemployed people, and there is much infrastructure that needs fixing (not just physical infrastructure, but also social infrastructure). Let's allocate those resources, through government direction if necessary, and sort out the money stuff later.

jjoonathan 6y ago

Spoilers: the policy of having rich people in your locale will work and the policy of having poor people in your locale will not.

blululu 6y ago
This is not guaranteed. Recall that in the 90’s Orange County - then a relatively affluent region - had to declare bankruptcy. Just because there are people who could foot the bill, does not mean that they will. If the surplus of wealth is in a community consumed by an inefficient urban structure then a financial crisis will arise just the same. In a lot of suburban areas the density is such that the infrastructure costs more and the property value is lower (on a per lot basis). The end result is that a lot of the wealthy suburbs will go broke. https://www.strongtowns.org/journal/2018/9/5/but-rich-people-live-here-so-we-cant-be-going-broke https://www.strongtowns.org/journal/2018/9/5/but-rich-people...
- bilbo0s 6y ago
  In a lot of suburban areas the density is such that the infrastructure costs more and the property value is lower (on a per lot basis). The end result is that a lot of the wealthy suburbs will go broke. If a suburb or ex-urb's liabilities exceed their assets, weren't they already broke? I'm trying to understand because I don't know a lot about this whole issue. But unless they charge people a whole lot in taxes to live in those areas, I'm not seeing how those places weren't poor in reality from the start? It seems to me those suburbs just managed to have other people pay for their infrastructure and services for so long that they never realized they were broke. But maybe there is some other source of money that they get from somewhere?
  - hiram112 6y ago
    Most localities sell bonds, backed up by promise of future tax revenue. Eventually their bonds are downgraded and they have to pay higher and higher interest rates. Finally, the math comes crashing down and the game is over when the market has no more appetite for the bonds and the state and feds won't backstop them.