Home / Debt / Governments Are Broke. Unions Are Busted. A New Day Is Dawning for Liberty.
Print Friendly and PDF

Governments Are Broke. Unions Are Busted. A New Day Is Dawning for Liberty.

Written by Gary North on July 13, 2012

Pat Buchanan has it right. The public sector — stolen money for boondoggles — is going broke. San Bernadino is the handwriting on the wall.

There will be other city bankruptcies.

The politicians and bureaucrats have finally begun to run out of other people’s money.

The Federal Reserve will ultimately create more money. But this “solution” merely delays the day of reckoning.

There are other busted cities, Harrisburg and Scranton, Pennsylvania have gone bust. So has Jefferson County, Alabama, in which the city of Birmingham is located.

This is not widely known. “Detroit has been taken into receivership by Michigan. A plan under discussion is to level a fourth of the city and reconvert it into the pasture and farmland it used to be a century ago.”

He makes a good point. Hiroshima was flattened in August 1945. It is now a successful city. Detroit was a powerhouse in 1945. It is a basket case today.

What happened to America? He nails it: the politics of public debt. From Reagan to today, politicians promised much. They cannot deliver. Cities hired bureaucrats, teachers, cops. These people got above-market ages and pensions. But hard times have arrived. The salad days are coming to an end.

It’s about time!

Government’s share of the labor force soared to 22.5 million. This is almost three times the number in the public sector when JFK took the oath of office. These employees were guaranteed job security and high salaries, given subsidized health care, and promised early retirement and pensions that the private sector could not match.

This would end, we critics warned. No one listened. Now they will listen. They will have no choice. The books will not balance.

He has it right: “The Great Recession brought it to a stop. We have come to the end of the line.”

It’s about time!

Revenues down, cities and counties face a choice. Raise taxes, or cut payrolls and services. But if taxes rise or workers are laid off and services decline, Americans in our mobile society move across city and state lines, as they are moving from California to Colorado, Nevada and Arizona.

This does not end the crisis, it exacerbates it.

Bankruptcy not only offers cities relief from paying interest to bondholders, it enables mayors to break contracts with public service unions. Since the recession began, 650,000 government workers, almost all city, county or state employees, have lost their jobs. Millions have seen pay and benefits cut.

It’s about time!

It is happening all over the world.

Cities and counties have no way out of the vicious cycle. Rising deficits and debts force new tax hikes and new cuts in schools, cops and firemen. Residents see the town going down, and pack and leave.

This further reduces the tax base and further enlarges the deficit.

He is correct: Keynesianism is failing.

It’s about time!

The Federal Reserve can delay this. Will it? I think so. But it cannot inflate forever. That would kill the dollar. If it stops, we get Great Depression II.

Continue Reading on lewrockwell.com

Print Friendly and PDF

Posting Policy:
We have no tolerance for comments containing violence, racism, vulgarity, profanity, all caps, or discourteous behavior. Thank you for partnering with us to maintain a courteous and useful public environment where we can engage in reasonable discourse. Read more.

10 thoughts on “Governments Are Broke. Unions Are Busted. A New Day Is Dawning for Liberty.

  1. A new day is indeed dawning but will the "new day" take us to where we want to go or is it just going to lead to something just as bad or worse than where we presently find ourselves? We are at the very beginning of what is perhaps the most significant paradigm shift in America's history (besides perhaps the 17th-century Puritans establishing their Colonial governments upon Yahweh's law) – that is, if pronomian, dominion-oriented Christedom is ready to take advantage of it (the signs of which are not too promising). This must begin with the Reformed movement facing up to, repenting, and repudiating instead of embracing and promoting what is America's national idol – the humanistic (the Preamble), anti-Christian (Article 6), and polytheistic enabling (Amendment 1) United States Constitution. Dr. North's book "Conspiracy in Philadelphia: The Broken Covenant of the United States Constitution" is a must read regarding this.

  2. Find out how much you really know about the Constitution as compared to Yahweh's moral law (His commandments, statutes, and judgments). Take our Constitution Survey and receive a free copy of the "Primer" (an 85 page book, normally $7 plus shipping) of "Bible Law vs. the United States Constitution: The Christian Perspective." Click on my name and you will find the survey in the right-hand column.

  3. Happy 🙂 Happy 🙂 That Government workers will finally realize the pain of the private sector. Can God bless us with competition in the public sector so they will KNOW what it means to compete and provide customer service and TRULY work for a living?

    Before you in the public sector bash me understand I HAVE SEEN how you work in that sector. I would fire you. That is why I left. I have a work ethic instilled by my parents of the WWII Generation. Most of you in the public sector have the ethic of "Least amount of work for the most amount of pay." Most in the public sector do not even understand what I just wrote.

    For the VERY FEW that do work in the public sector my apologies and my God Bless You. You make dealing with Gov't pleasant. Frankly I think for the garbage you take from the public your pay should be doubled. But you are the very few.

  4. Cedric Ward says:


    Your spelling has been atrocious from the first news letter. DO YOU NOT PROOFREAD before you print?
    Also, far too often your introduction to the article upon which you are commenting is highly BIASED in favor of YOUR POINT OF VIEW.
    Can you not be honest and KEEP TO THE FACTS?
    It's San Berna(R)dino.
    It's "above-market (W)ages and pensions.

    In your article on the atheist in this newsletter, you said he 'fled" when the article said "he FILED'.
    Sort of MISLEADS people dontcha think?
    Clean up your act. It seriously devalues what you have to say.

  5. Katchaturian says:

    You want it when? Cities, towns and the like want a museum though no one will come. Thats not all they want and they want it when they want it. It doesn't matter they cannot afford it. What have we learned in the past 2065 years.
    "The budget should be balanced, the treasury should be refilled, public debt should be reduced, the arrogance of officialdom should be tempered and controlled, and the ASSISTANCE TO FOREIGN LANDS SHOULD BE CUTRAILED, LEST ROME BECOMES BANKRUPT. People must again learn to work, instead of living on public assisstance. Cicero 55BC

    Past 2065 years? Not a thing.

  6. CW Orange says:

    It is way past time this happens to the cities. Politicians have promised too much for far too long. They pay huge salaries to police & fire and municipal workers. They build stadiums and projects that no one wants and wonder why they go broke. Hopefully there will be some more large cities like Detroit, and counties like Jefferson in alabama. It is time to clean out the politicians from the bottom up to oBumbleBut et al. I flatly refuse to pay for any more of this crap. Revolt is now clearly coming and it is time.

  7. CW Orange says:

    While we are on the subject of wasting money, let us mention the welfare queens who call publicly for "someones got to be held accountable for my babies"… Let us shut down welfare hard, and get rid of the welfare caste, both black and moslem. They have abused the system long enough. I do not care if they starve. Maybe we should all sign up for welfare and break the system completely. Or we could all riot every day at the welfare offices. Throw a hitch in the system, and make it falter and stop. We could all go superglue all the municipal offices around our town and county. Particularly get the doors to the bathrooms in all official buildings. Then we shall see which boss the bureaucrats obey.

  8. Limited government is the only form that can ensure longterm prosperity. When you have this big a percentage of the workforce that doesn't create wealth, but can survive only by taxing and penalizing the productive members of society, is when you get hellholes like Detroit, Oakland and Birmingham to name just a few. Since politicians don't think past the next election cycle, they perpetuate the destruction until they are out of office and it's someone else's problem.

  9. Yup. Time to reinstate the declaration and ABOLISH this monster as is our right and DUTY!!

  10. America must change

    We, the America people, have a very serious problem in our economy and our nation. We’re going to have to change our attitudes and face some hard realities. Number one: We are the people (each of us) responsible for our country!!!!! In any civilization, past present or future, under any form of government, republic, dictator, king, bureaucracy or congress there is only one person responsible and you can meet that person when you look in the minor. When we abrogate our responsible to any form of government that government will eventually make use their slaves. Number two: You cannot turn a sex maniac loose in a whore house with a credit card. We in the United States have turned loose our congress, presidency, and bureaucracy with our credit card. We have got to take that credit card back or we will never right our economy or our nation. Number three!! Government is not God