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alstry (34.92)

Is The Social Contract Breaking Down?

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July 26, 2009 – Comments (17)

We work for money in exchange for trusting government will maintain the value of money.

We pay taxes in exchange for government providing services.

 

Let's think about where we are today...government has run up such massive debts that much of what we pay in taxes simply goes to paying interest.  Promised pensions are seemingly becoming an illusion of the past.  The value of our currency is eroding and where it stops few really know.

We are still the greatest nation on earth......but at what point do you think the Social Contract between the American citizens and government breaks down?

17 Comments – Post Your Own

#1) On July 26, 2009 at 10:33 AM, alstry (34.92) wrote:

What happens if our Justice System breaks down????

Judges who run key programs that supplement the court system — such as the foreclosure rocket docket and family court services — could lose their jobs or face furloughs this year as officials wait to find out if projected state revenue comes through.

The result would likely mean cases dragging on longer while administrators try to pay about 70 percent more per month in upkeep for the new 10-story justice center tower that opened June 1. Lee County commissioners will look at the court’s $13 million budget proposal starting next month as they examine agencies at a time of declining tax revenue.

“You start with fat, then you go to muscle. We’re at bone now,” Lee Circuit Judge Margaret Steinbeck said of the court’s budget. “Where the impact is — it’s not on judges, it’s not on court programs — it’s on our citizens. There’s a cost to not resolving cases.”

“It’s really kind of scary — we’re uncharted,” Cary said.

http://www.news-press.com/article/20090726/SS15/90725035/1075/Towering-costs--falling-revenue-may-clog-court&referrer=FRONTPAGECAROUSEL

Welcome to Alstry's world.....soon everyone will be addressing Alstrynomics.

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#2) On July 26, 2009 at 10:40 AM, alstry (34.92) wrote:

WHAT WILL HAPPEN TO SERVICES? 

On the home front, property-tax rates are poised to increase for many homeowners still recovering from the economic storm. So, too, are water fees and trash-pickup costs.

In the community, some libraries and parks are closing an extra day, pool hours are likely to be reduced and bus service curtailed. Even senior meals on wheels won't be as plentiful.

At school, there will be fewer assistant principals in offices and teachers in classrooms. Students will find fewer guidance counselors to turn to.

As local governments throughout South Florida face the painful reality of fallen property values, residents will unmistakably feel the pinch.

``You are going to see library hours cut; you are going to see park hours cut,'' said Gary Resnick, president of the Broward League of Cities and mayor of Wilton Manors, which now closes city hall on Fridays to save money. ``The cuts are not going to be invisible.''

The sunken property values opened budget holes that practically every city, county, school and hospital district in Miami-Dade and Broward counties must fill. Simply, less money is coming in to public coffers than needed to keep services up.

In Miami-Dade, the gap is $427 million. In Broward County, more than $100 million. Pembroke Pines faces a $24 million gap and Miami $118 million. Jackson Memorial Health confronts a $168 million hole and an escalating need to treat the poor.

To seal those gaps, governments must increase the tax rate, slash services, gut public payrolls -- or all of the above -- even with a recent thaw in the housing and finance markets. Preliminary tax rates are being set throughout the region but won't become final until public hearings and final votes in September. They take effect Oct. 1.

http://www.miamiherald.com/569/story/1157930.html

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#3) On July 26, 2009 at 11:17 AM, alstry (34.92) wrote:

TIME FOR RADICAL CHANGE!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

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#4) On July 26, 2009 at 11:22 AM, adisdad (< 20) wrote:

Alstry, First and foremost, Thank you. Your comments on the SPF board helped me hold on to my short position when they were ramping it up on bogus news. I still hold half of my position and was wondering what your take was on them. Do you think they have turned the corner? Do you think SPF has survived Bankruptcy?

Just wanted to know your thoughts.

 

Before I go, I cannot thank bloggers/posters enough. It was not so much that you made me money. It is more that because of bloggers like you,  I was able to get my 401K(where the bulk of our savings are) out of stocks and into money markets. I did not make money the last couple of years, but I sure as hell did not lose money(and sleep).

Kudos to bloggers like you, Mish, nakedcapitalism and marketticker for saying it as you see it.

 

 

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#5) On July 26, 2009 at 11:23 AM, prose976 (< 20) wrote:

Actually, I have a little insight for Alstry.  After a long thought, I realized that it isn't that we necessarily need to put everyone to work pumping the economy back up - we just need to decrease the number of people living on the dole and the size of government.

There is this crazy notion that all the recently unemployed should be employed.  Maybe they shouldn't have been employed in the first place.  Maybe this country had alot of excess in frivolous businesses and in frivolous jobs for those businesses.  Maybe those who are now unemployed would be better off just staying at home, taking care of their familiies, planting a graden, getting in shape.  If the states run out of money for the unemployed, maybe that is actually a good thing.  After all, I have a feeling that at least 50% or more of those living on the public dole are living way beyond their means anyways.

If we allow the money to run out, there are two paths we can go down.  Insurrection or back-to-basics living for the unemployed.

There is a widely accepted view that the unemployed all really need a job.  Take the DINKs or the mother/father workers with kids in day care.  It seems that we're all so convinced that both parents should have jobs outside the home and that any human being in this country age-eligible to have a job should be on somebody's payroll.  Not true.

Truth is, payrolls have become bloated with fat.  Workers pay far exceeds their merits, and payscales have ballooned to justify the compensation received by fat cats and executives in every industry.  This has all resulted in false inflation and a sense of entitlement.

Companies are now discovering that by cutting out some of the fat, they can stop some of the bleeding.  By becoming more efficient, they can run leaner and meaner.  A jobless recovery is business waking up to the fact that they don't need all the "extras" on the set.

Our colleges have become factories for churning out massive quantities of "qualified" workers with diplomas that should "entitle" them to jobs.  Not everone needs a "job."  Plain an simple.  Everyone needs an education, but that starts at home.  If education at home was any good, even students who earned a diploma would realize that their destiny isn't necessarily filling a cubicle somewhere.

There is so much stress on education to attain gainful means of employment for every human being who is born, the whole jobs universe has bubbled out of proportion.

Think about this:  We changed the model from men working at offices and factories to everyone working at offices and factories, essentially demaning that industry come up with twice the number of jobs available.  So, industry came up with them, but not without putting a huge strain on family life and putting the education system into over-drive, driving up prices.

So now, we have a system that demands that everyone age-eligible is on somebody else's payroll or creating their own payroll.  How unrealistic and unhealthy is this for the system?  It's tragic.  The nucleus of any society is the family unit.  Just like cells in an organism.  If that nucleus is unhealthy, fragmented, damaged, etc, it will weaken the rest of the organism.

Our economy has become bloated, our government has grown bloated, our business payrolls have become bloated.  Our people have become obese.  It's called gluttony, ushered in by immoral leaders in government, family and business, driven by commercialism and marketing, masked with the fantasy and promises of materialism and all it's satisfying "benefits."

What does a person do once he/she has become obese?  He/She goes on a diet, sheds the fat thru exercise, replaces it with muscle, educates himself in the ways to live a balanced, healthy life.  That obese person is now living as he was intended.

The United States of America is not healthy.  The fat has to be shed, the people need to turn off the media and commercials, and educate themselves with real information.  Not what drug can I use to lose fat, or what product can I buy to be happier, or how much more money do I need to make before I can start being a good parent and live my life as intended.

Alstry speaks of the Matrixx.  He's right.  We're living in one, but it's self imposed.  And we're thrown into it as children of parents who are self-deceived and sucked in by what everyone is saying out there.  Once we begin to wake up to reality, that is when we leave the Matrixx.  Then, things will begin to change for the better.

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#6) On July 26, 2009 at 11:48 AM, alstry (34.92) wrote:

The problem is simple....

In the last ten years most visibly, we morphed from an economy where the production of goods and services created debt instruments to an economy where the production of debt instruments created goods and services.

It was incredible, a $200,000 mortage pruduced fantastic commissions originating the loan.  Then even more commissions securitzing the loan.  Then insane commssions and profits buying and selling swaps against the loan.

Soon, few cared if the loan ever performed....the money was in the gaming and packaging of the loan......and boy did we create lots of loans......on nonsense....schoools in the middle of farm fields, housing communities miles from work centers, shopping centers to support those communities when people move in, etc....  Collectively debt ostensibly drove our economy, until our economy could no longer service the debt.

I realized about three years ago that this was simply one big Ponzi Scheme that would blow up in all of our faces.  As a person who made millions investing, I quickly realized that the game as we knew it for the past hundred years was soon coming to an end.

The entire system was insolvent and it was just a matter of time before the debt could not be extended.

Although the problem was simple to understand, the magnitude was simply too much for most to handle.  We have become a nation that simply reacts to what is presented to us instead of presenting ideas that cause reactions.

That is why the wedding video above is so wonderful.  It is innovative, creative, and drives emotional value to the viewer.  If someone else tried to do the same thing, it would not have a similar impact.

At this point, the banking system infected our economy with more debt than our citizens are capable of paying back.  This is a mathematical fact and cannot be refuted.

AND OUR GOVERNMENT OFFICIALS AND LAW ENFORCEMENT WERE INDIFFERENT TO ADDRESSING THE PROBLEM.  Government was one of the primary beneficiaries of the party.

Now we are simply out of money.  How can you reform health care if you don't even know if you have any money?

The bankers in America have basically been Madoff to the citizens of our nation.  They loaned money that didn't really exist.  Now we are finally beginning to see what Alstrynomics knew three years ago...

Once the banks stopped lending, the debt could not be rolled over and the economic driver curtailed, it wouldn't be long before the music stopped playing.  Now most can hear it is getting a lot quieter at this party with tens of trillions in debt needs to be paid back...

And government is bailing out the bankers??????

We must restructure soon or potentially very disturbing consequences will follow.

We need change....radical change.

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#7) On July 26, 2009 at 11:55 AM, HooDaHeckNose (95.78) wrote:

prose976, I may not agree with everything you said but you deserve credit for a well thought out and interesting perspective. There's no doubt that a whole new way of looking at our society is on its way.

If we could rec comments (HINT, HINT) you would get one from me.

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#8) On July 26, 2009 at 11:56 AM, SolarisKing (57.99) wrote:

Is it possible that it just can't be done? Most folks have been raised on star treck and star wars and have just always assumed that the future was bright and full of endless growth, but . . . .

My contribution to Alstrynomics (or, the economic myth of the ever expanding spiral)

Is it possible that there is a large enough percentage of humans who by their nature  only want one TV, or none. Who only want a decent computer, or none. Who are satisfied with a small old house.

How fast does a computer need to be? How hot does your water need to be? How big does a house need to be? How many laws can you make before they just don't make sense? How many plane trips does a person really need? 

What if humans are hard wired by evolution to prefer to live at a certain pace?

   Humans only NEED food, shelter, and companionship. Food can be grown on an amazingly small amount of land. It could be done in the front yards of most homes.
   Shelter can be just a small room. The chance to own a castle has baited folks, but what if that myth evaporates? Many families could live in one McMansion. In fact many folks can live in tents, of caves.

The FACT is that most of what we think of as product (to make GDP to pay down the debt) is really just luxury.

   As the truth gets realized that there is no more land, and no more oil, and still more people, and no way to ever get out of credit debt, and national debt. . . .  what if folks just don't want/need small plastic junk?
   How long can we live with planned obsolesence in a world of dwindling resources?

   IS IT VAGUELY POSSIBLE that folks will just stop believing that every man will have a castle? Or that we will just run out of lumber, farmland, oil, and such? and that THERE IS NO SOLUTION?

If you don't like peak oil, your really gonna hate peak farmland.

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#9) On July 26, 2009 at 12:17 PM, Weequay02 (< 20) wrote:

Solaris,

"Is it possible that there is a large enough percentage of humans who by their nature  only want one TV, or none. Who only want a decent computer, or none. Who are satisfied with a small old house."


LOL, yeah right. 

I highly doubt that humanity will ever decide to stop wanting more from life, even if we have to destroy ourselves getting it.  Atleast that seems to be the theme so far.  Either the future will be "bright and full of endless growth", or it won't include us at all.

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#10) On July 26, 2009 at 2:52 PM, AdirondackFund (< 20) wrote:

@ SolarisKing

This is the reason why I have left NYC where I was born and bred, sold all of my Real Estate, all of which I have held since 1984.  I have bought a 100 acre tree farm which has within it's boundaries, 3 natural springs, a stream which runs through the center of it, with a Gorge which drops 300 feet and to which I have installed hydroelectric power.  Besides the trees, there are wild animals which abound on my property.  Bears, deer, wolf, coyote, mountain lion, turkey...it's a long list.  

The area where I live does not have a Police Force.  There simply isn't enough population to justify the expense.  The lots are all 100-150 acres in size and the owners of these lots have been there for generations.  Sometimes, it is better to take care of your own problems rather than allowing the Government or the Professional Class to take care of them for you.  It is simply that simple. 

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#11) On July 26, 2009 at 4:11 PM, OneLegged (< 20) wrote:

If only the government would leave us the Hell alone.  Every year more lawas more laws more laws.  More taxes.  Higher taxes.  More and more restrictions on what one can do with one's own land.  This is a nother thing that needs to end.

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#12) On July 26, 2009 at 7:24 PM, SolarisKing (57.99) wrote:

Weequay02 , Where i think your deduction may be correct (Either the future will be "bright and full of endless growth", or it won't include us at all), I am not sure all of your details are. I personally know many folks who want little of anything. 

   When i wrote  "Is it possible that there is a large enough percentage of humans who by their nature  only want one TV, or none. Who only want a decent computer, or none. Who are satisfied with a small old house.", i was not referring to saving the world, i was only speaking of wether or not we could reach enough GDP while faking production to balance the accounts of the national debt/etc.

The concept is called 'post scarcity anarchy' and there are books written about it. Where folk would like to be kings, if they find that there is little to no chance of it many will instead become dumpster divers. In our current economy, there is an abundance of distance between our needs, and the amount of resource we can access. For instance, many towns have free clothes. You can often find a small free tent at one of these community service centers, like churches or recycle/reuse centers, or you could build a shanty from salvaged scraps of board and tin.

Anyhow, i wonder if you see what i'm getting at.

As far as Adi, You may now have enough, but it soundsd like a castle to many folks in this country.

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#13) On July 26, 2009 at 9:36 PM, EcoFreako (< 20) wrote:

Man, this blog is great.  I work in a construction firm which is actually inundated with requests for homes and work on homes.  We bill our clients using a cost plus model (total cost of the house incl. labor)/(fixed %) = Cost to home owner.  Our fixed % goes up as the number of square feet per person increases.  Two people don't need 2000 square feet. 

We also are approached by many people who do grow their own food in their yards, raise backyard chickens, etc. 

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#14) On July 27, 2009 at 9:13 PM, selfdestruct2 (41.84) wrote:

HooDaHeckNose, I swear I was thinking the same thing about giving a "rec" to the comment from Prose. He made some interesting points.Too many people on the government dole and a government that's way too out of control.

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#15) On July 27, 2009 at 9:51 PM, angusthermopylae (38.77) wrote:

I'm with SolarisKing on this one...the simplest (and therefore, least likely) answer is when enough people figure out that you really don't need to keep up with the Jones's.

I say "least likely" because, at this point, it would be like trying to grab the last cig from a three-pack-a-day smoker...he doesn't want to give it up....

But if circumstances change (peak farmland, collapse of goods distribution, etc.), then the answer becomes "most likely"....because those without the goods or means to feed themselves will  be very hungry...

I don't think a perma-bear doom is upon us...but over time, it's entirely possible that more and more will decide (or have decided for them) that they can do without all the extras in life.

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#16) On July 27, 2009 at 11:21 PM, SolarisKing (57.99) wrote:

PEAK FARMLAND. PEAK WATER. PEAK FISHING. PEAK LUMBER.

What is it about that that's not easy to understand?

Your grandchildren will live in a different world than the one that existed for all of human existance. And they are going to be upset about it.

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#17) On July 31, 2009 at 1:55 AM, alexxlea (66.68) wrote:

Population 2% crop yields 1.5%.

Water usage 100%.

Fish population<20% of current.

Oil: crickets.

Bye bye beautiful world. 

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