Economic Collapse?

[Fletch]

The online novel is "The Probability Broach" found here: Big Head Press - Thoughtful Stories, Graphic Novels Online And In Print - The Probability Broach: The Graphic Novel, by L. Neil Smith and Scott Bieser

Best part: the requirement that all governing be done by unanimous consent. Suddenly, my vote actually counts.

 

[SavageEagle]

The online novel is "The Probability Broach" found here: Big Head Press - Thoughtful Stories, Graphic Novels Online And In Print - The Probability Broach: The Graphic Novel, by L. Neil Smith and Scott Bieser

YEA!!!! That's it! You people HAVE to read this! Forget that it's written in 1970, just look at the logic!!!!!

When a bank folds, just like any other business, its assets are purchased. Be it via sale before hand, auction, etc. Part of this property is the title to homes that are mortgaged. It is a money producing thing. Someone will pick it up and the person you write your checks to might change. You have a legal contract so they can't modify that without your approval (i.e. make your payments higher, etc. with a mechanism not specified in the contract.)

Ok, but what happens when no one can pick up the loans? What happens when everyone goes bankrupt and there is no one left to buy up all those loans?

Your property taxes generally go towards schools, emergency services (fire, police, EMS, etc) and other local support. This is why they wouldn't just disappear when you pay off your home. This was the problem when older folks on fixed incomes were living in paid off homes that went from $40k to $200k in value. Their house has been paid off for years, but the property taxes were keeping pace with the houses appraised value. The taxes were getting large enough that they couldn't afford to even pay the taxes to live there.

Ok, but beyond Police, Fire, Schools, Medicaid/Medicare, and foodstamps/WIC, what other services are we providing for? I can think of one thing to reduce taxes. Make Fire Departments paid mostly through insurance companies. Sure insurance would go up, and insurance companies would own the FD's, but wouldn't that be better than Government runs FD's? Surely there must be ways to reduce or eliminate government control of some of these services. Why can't churches take over foodstamps and such? PCC and King's Way make so much money they brag about it every Sunday. PCC has over $200k in sound equipment alone. They don't need that stuff. Get a loud speaker! Put that money back into the community.

Seriously, most of these services would be better off in the people's hands rather than the government's.

It is all well and good to say eliminate property taxes. However, you will have to replace it or reduce services. While I won't be one to argue that government services don't need reduced, I wouldn't put some of the above referenced services in the mix.

Other taxes could be increased. Luxury taxes for instance. High end cars, boats, extravegant house's, condos, etc. Sales tax increase. Prices of goods might come down some to compensate, but people will adjust their spending to stay at a liveble level. Of course I honestly believe things to allow you to survive should be cheap, some of which should be practiclly free. Not completely free, but REAL cheap. It cost companies how much to build a car? Cadillacs two years ago cost $3-7K to build and sold for $40-50k. Come on...

 

[SavageEagle]

Best part: the requirement that all governing be done by unanimous consent. Suddenly, my vote actually counts.

AMEN!

 

[indyjoe]

Ok, but what happens when no one can pick up the loans? What happens when everyone goes bankrupt and there is no one left to buy up all those loans?

Look at it this way. What if the Hummer dealer when bankrupt. No other car dealers want them. Who would buy them? No one for the price the dealer paid. But you bet I'd buy a hummer for $100. Would someone else buy the hummer for $200? Then the market price is $200, unless someone would pay $300. Etc. There will always be people to buy, however you might buy a $200k mortgage for $10k. If the people are still paying on time, that is a STEAL. If you have to foreclose, well you probably bought a decent piece of property for $10k. There will almost always be buyers and THEY set the price.

Ok, but beyond Police, Fire, Schools, Medicaid/Medicare, and foodstamps/WIC, what other services are we providing for? I can think of one thing to reduce taxes. Make Fire Departments paid mostly through insurance companies. Sure insurance would go up, and insurance companies would own the FD's, but wouldn't that be better than Government runs FD's? Surely there must be ways to reduce or eliminate government control of some of these services. Why can't churches take over foodstamps and such? PCC and King's Way make so much money they brag about it every Sunday. PCC has over $200k in sound equipment alone. They don't need that stuff. Get a loud speaker! Put that money back into the community.

That is the old government versus privatization. Ever hear of Enron? That was the result of many things, among that the privatization of power sales in California. They had power companies shut down for "whatever reason they can make up", in order to reduce available power. This artificially inflated prices and gave them huge profits at consumer's expense. Privatization is good, sometimes.

Check out Enron: Smartest People in the Room. Great documentary on that whole fiasco.

Other taxes could be increased. Luxury taxes for instance. High end cars, boats, extravegant house's, condos, etc. Sales tax increase. Prices of goods might come down some to compensate, but people will adjust their spending to stay at a liveble level. Of course I honestly believe things to allow you to survive should be cheap, some of which should be practiclly free. Not completely free, but REAL cheap. It cost companies how much to build a car? Cadillacs two years ago cost $3-7K to build and sold for $40-50k. Come on...

That is essentially what has been done in Indiana. By 2010 (I think), your home income tax will be only 1% of the home value. A sales tax increase was put in to pay for it.

You aren't actually correct on your Cadillac numbers. The physical components and labor to build a single Cadillac is $3-7k. However, the versions built to just crash and validate design, the engineering teams work to develop the design, the marketing to get people to buy it, and all other sunk costs going into each car. It is much more than $3-7k per car.

The world is a complex place and real solutions are hard. I just spent 3 hours packaging stickers for shipping to various Appleseed folks. I charged each of them money for the stickers I purchased (1000 stickers). They are getting 75 each. The money covered the cost of the stickers and the postage to send them out. If I ran a business, that would be fine, right? Well, I didn't get paid for the work. I didn't get gas money to go to the post office and send them. I didn't get paid for the envelopes. Etc. I knew that I would be donating things to make the stickers work and I was cool with that. But in a business, you can't sell for exactly the price it costs or you will no longer be in business.

Car companies have sold models for far above wheat they cost to produce, and others closer. They can only sell what the market can bear. They must make their profits where they can. The story of the Ford Excursion or Navigator is crazy. The mark up on these was incredible. But that was what the market will bear. It isn't paying so handsomely for them now.

Croks shoes cost probably a $1 to make. If people will pay $30+ for them, then good on Croks for making a product that people will pay money for. It is how the free market economy works.

 

[Prometheus]

It is all well and good to say eliminate property taxes. However, you will have to replace it or reduce services. While I won't be one to argue that government services don't need reduced, I wouldn't put some of the above referenced services in the mix.

Replace property taxes with usage taxes (city, county, state sales taxes) and business license taxes.

That way you only pay taxes when you decide to. The old folks barely making ends meet? They don't go out to eat or buy an IPOD, they don't pay. they also don't lose their house.

The idea that a 90 year old can fail to pay property taxes on a house he's had paid off for 30 years and be kicked out (ultimately by masked men with machine guns) is absurd!

I live outside of a city, so I don't have automatic trash pickup. I pay a bill every three months to a private company.

FWIW We (city of hammond and most other cities) pay a separate bill every 2 months for water, sewer and garbage. It has nothing to do with property taxes.

Cities spend exorbitant amounts of money on city golf courses, housing assistance and God knows what else. Stop spending that money and most of the need for those property taxes disappears. What doesn't is made up with sales taxes i.e. usage taxes.

Smarter planning would have cities providing EMS service instead of contracting private ambulances. The firefighters are there anyway, most have to have EMT or better licenses anyway.

Instead of running 4 man engine crews, 2 man engine crew 2 man ambulance crew. thats how we did it in Florida and it slashed fire protection costs. Private ambulances still exist for transport between facilitates and backup for city and county. BLS and ALS charges can net ALOT of revenue. You already have the manpower for the fire protection anyway that is hardly ever used. Put that manpower to work!

There is an inititive to repeal private property taxes in Indiana. Please support it.

 

[indyjoe]

FWIW We (city of hammond and most other cities) pay a separate bill every 2 months for water, sewer and garbage. It has nothing to do with property taxes.

In some places it does. It is down to whatever they decide to provide or "require" in the area. In Indianapolis, this is part of your property taxes for garbage and sewage.

Smarter planning would have cities providing EMS service instead of contracting private ambulances. The firefighters are there anyway, most have to have EMT or better licenses anyway.

Instead of running 4 man engine crews, 2 man engine crew 2 man ambulance crew. thats how we did it in Florida and it slashed fire protection costs. Private ambulances still exist for transport between facilitates and backup for city and county. BLS and ALS charges can net ALOT of revenue. You already have the manpower for the fire protection anyway that is hardly ever used. Put that manpower to work!

I agree. One thing I saw while out yesterday had me intrigued. It was house call with what looked like two fire department SUVs. They had a make equipped with typical Ambulance gear, but not the ability to transfer. It looked like it was called for first responder, with possibly a call for a bus if needed while stabilizing. Seemed like a good idea for providing good service, without as high of costs.

There is an initiative to repeal private property taxes in Indiana. Please support it.

I do and continue to do so. We in the White River area are getting fought over by Greenwood and Bargersville. The want us, purely to pay more taxes to them. We won't get any better services, just pay more. How does that help us?

 

[Prometheus]

I agree. One thing I saw while out yesterday had me intrigued. It was house call with what looked like two fire department SUVs. They had a make equipped with typical Ambulance gear, but not the ability to transfer. It looked like it was called for first responder, with possibly a call for a bus if needed while stabilizing. Seemed like a good idea for providing good service, without as high of costs.

We're getting off track here but down in Florida they were equipping engines to run as ambulances. Some of which were ALS units (The Lt on the rig was also a medic). In Pittsburgh during the summer they run Medics on motor cycles instead of waiting for a ambulance to battle traffic.

Lots of innovations are around, the key is getting cities to do more with less. Right next to me is a hammond fire station with 6 men. 4 for the engine and 2 on an ambulance. Two people over staffed, IM(professional)O. Down teh road they have a firehouse with just one engine, Sometimes I see 3 people, sometimes 4. Take that engine down to a 2 man crew and put a ambulance in the same hosue with a two man crew.

In the event of a fire, the ambulance crew serves double duty. Actually with two ambulances on scene the two EMTs serve as firefighters and the two medics stand by with one rig as EMS protection.

In this senario you have double the ambulances available 90% of the time for EMS and during majors fires you have the normal compliment of ambulances that is available now. You also have more money revenue generating (by relying less on private ambulances) available and a safer populous with the added EMS coverage.

Doing more with less. Same type of forward thinking can be applied to other government services.

 

[SavageEagle]

Ok to get back on track here, What do you believe will happen to our local/state government when the economy collapses?

 

[Fletch]

That is the old government versus privatization. Ever hear of Enron? That was the result of many things, among that the privatization of power sales in California. They had power companies shut down for "whatever reason they can make up", in order to reduce available power. This artificially inflated prices and gave them huge profits at consumer's expense. Privatization is good, sometimes.

It's good when it's actually done. If you think what happened in California was "privatization", I have some oceanfront property in Arizona I'd like to sell you.

 

[SavageEagle]

LOL give it a couple more earthquakes and I'll believe you!

 

[indyjoe]

Ok to get back on track here, What do you believe will happen to our local/state government when the economy collapses?

Depends on where the money for services come from and how the economy collapses. If it is heavy business tax funded, and businesses close, services will go down. If it is property tax funded and people lose jobs and can't pay, then either they make everyone homeless or pass emergency measures to allow them to not pay as much. Although I think a majority or people still have mortgages and require escrow payments for tax and insurance. In these cases, the taxes would probably still have to be paid by the bank after foreclosure that people are forced into.

Either way you cut it, economy collapse means less money for government to provide services.