Categories
folly responsibility

The Stockton Bust

Stockton, California, had seen a flurry of new home projects right up till the mortgage market crash. But, boy, did that come to a screeching halt. The crash led to foreclosures, which led to lower revenues from property taxes for the city. And though the city tried some spending cuts, they haven’t been enough. The Stockton City Council just voted, six to one, to seek federal bankruptcy protection.

Reasons for the bankruptcy, however, are not confined to reduced revenues. Add “soaring pension costs” and “contractual obligations” to the list of disaster factors.Stockton Bankruptcy - an illustrative image, not a photojournalistic artifact

And it’s pensions and medical insurance that make up the elephant’s share of “contractually obligated” must-​pays. We’ll see if official bankruptcy will allow the city to get out from under that mess. The Chapter 9 plan includes dropping medical benefits for currently fully-​covered retirees.

Who’s to blame? Politicians who negotiate really cushy deals for their (our) employees. The contracts obligate future taxpayers to pay out huge pensions for future retirees, rather than being funded (through insurance and investment) at the time of salary disbursement. The problem is that politicians love to make promises others must keep. Specifically, in this case, they contract defined benefit pensions not defined contribution pensions.

It makes no sense to do this, of course. It encourages irresponsibility, and is (to use a buzzword that should be used often against its usual purveyors) unsustainable. As proven by the Stockton bankruptcy.

Stockton is, so far, the largest American city to go belly up. We can expect further such busts, since the cause of Stockton’s problems — under-​funded pensions coupled with full-​coverage, gold-​plated, lifelong health insurance for government retirees — remain endemic throughout the country.

This is Common Sense. I’m Paul Jacob.

Categories
general freedom

Here to Raid You

Government agents: Here to help? Or to break in, drag you out of your house by the scruff of your neck, throw you to the ground, handcuff you, and stuff you into a patrol car before finally releasing you six hours later?

That’s what happened to “Stockton man” Kenneth Wright, as witnessed by the neighbors and his kids. According to News 10, “After the Department of Education raided the home of a Stockton man Tuesday morning, officials said the search was part of an ongoing investigation into financial aid fraud.” Wright wasn’t even the subject of their investigation — that would be his estranged wife.

So … an “investigation” into “financial aid fraud” warrants smashing in someone’s door and treating him like an escaped axe murderer? Not this side of the portal to Bizarro World.

The raid wasn’t even triggered by an unsubstantiated tip about a medicinal-​marijuana stash. No need any more to use the drug war as an excuse to assault peaceful citizens. Now any old “investigation” warrants outrageous assaults, and any government department can commission them. Not so long ago I spoke of raids on barber shops suspected of unlicensed scissor use.

Such abuse of power is becoming the norm. If America is not quite yet a full-​fledged police state, it’s sure starting to smell like one.

Wright says: “All I want is an apology for me and my kids and for them to get me a new door.” That’s not enough.

This is Common Sense. I’m Paul Jacob.