Mervyn, There is a lot of fat in state (and federal) budgets that can and should be cut. For all its capitalist credentials, the average public sector (federal, state and cities) worker is better paid and has better benefits than one in the private sector. A lot of them have been promised lavish pensions that have not been budgeted for and reversing such entitlements will be very challenging from a legal point of view. The amount of abuse by state are quite incredible. For example pensions are based on the employee's last annual salary, so employees often spike their pre-retirement salaries by working overtime in their last year. Another common trick is to retire for a few years and join back again after a few years (as per local laws). Net result? These workers are effectively taking in a double salary thanks to their pension and salary with their "new" job.
BTW, it was just announced today that the US Social Security program will experience a negative cash outflow this year. The earlier estimate was 2017. And now of course, we have this new boondoggle known as public health care. I'm sorry, but many aspects of society here has just gotten plain lazy if not spoilt. We just expect a lot for doing nothing. When I see bums begging for money in America, I am often tempted to give them a piece of my mind on what real poverty is. Marlon Menezes Austin, Tx. ----- Original Message ---- From: Mervyn Lobo <[email protected]> While the US residents ponder how much more taxes they will have to pay for the new medical system in the country, the rest of the world has a weightier problem i.e. Should US states be allowed to go bankrupt? When you lend money to a company, you know the risks involved and you get a premium corresponding to the risk you take. On the other hand, people lending money to US states got low rewards as they relied on the fact that the state could always raise revenue by increasing taxes. Now that it is becoming clearer that some states and even the federal govt is in no position to raise taxes, because of the state of the US economy and the large number of unemployed people, there is this huge possibility that some govts will be unable to service their debts and will default on them. If you or your financial institution has lent money to a state govt, these are interesting times.... This new health system was long over due but the US will pay dearly for it. Mervyn1092Lob
