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Spending - Is There A Limit ?

By Ben Meisner

Wednesday, October 06, 2010 03:45 AM

One of the problems that cities and some States are experiencing in the USA today is the fact that they have simply run out of money and can no longer support the infrastructure that is in place.
 
Infrastructure such as , fire, police , highways , and even housing have, in some communities,   crumbled to a point where some rural districts are taking paved roads and returning them to gravel in order to save money and keep the district from from going broke.
 
Even California is on the edge of bankruptcy and Arnold is toying with the idea of making pot legal as a means of trying to ease his State into a program which would eventually tax the product.
 
Whether we want to believe it or not, we do follow the USA in not only the manner in which we live, but also in the way that we spend money.
 
The USA is broke, dead broke. They are being propped up by countries such as China who are fearful that if they don’t continue to extend credit they will be left with trillions of dollars in unpaid bills with little or no prospect of collecting.
 
So what are we doing in Canada but more specifically in Prince George?  Well, we're digging into our credit card, borrowing some more money to construct more infrastructures that cost more to operate.
 
In this City, we owe about $ 119 million.  When I raised the question with one Councillor he said "Well we still have $131 million left on our credit card"  truly spoken like an American of yester year.
 
That credit card is about to get yet another boost for a police station for $40 million dollars, then there is the 2015 winter games with a tab of about $20 million, leaving us with about $70 mill left on the card and demands for a new performing Arts Center with a tab of $50 mill attached to it.
 
It wasn’t long ago that this city enjoyed no debt and here we are poised to take all the bank will give, without so much as a second thought about how we will replace an aging infrastructure or any unforeseen future problems.
 
The argument we get, is  the price of borrowing has never been better.  I hate to break it to you folks, it’s all about supply and demand and the demand from those aforementioned US cities is simply not there when they can’t get the people in their community to come up with the money to cover the taxes today much less adding to the burden.
 
We could have built a more modest police station for a much smaller tab, but we aren't going to do that.
 
We could be saying to the taxpayers that, come next spring you will be paying about 10% more in your taxes and so in the interest of reining in our horns we are going to have another look at what we are spending.
 
Instead, we are being subjected to a reverse petition, the second of its kind,  to ram down our throats the money by- laws needed to build a new police station.
 
We already know that police costs are going up by $1 million next year; we already know that the cost of operating the city will lay another 4% on our tax bill. We already know that the cost of services is going up and yet no attention is paid to the future problems.
 
We need a fix at city hall , but so far all we are getting is a credit card with the words, "spend to the limit", it is, after all, just money... taxpayer money .
 
I’m Meisner and that’s one man’s opinion.  

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“The costs are going up whether it’s salaries or new equipment needed,” said RCMP Pacific Region Deputy Commissioner Gary Bass, who met with a number of mayors at UBCM Tuesday.

Bass said the issue isn’t limited to the RCMP, adding cities with municipal forces are also struggling with rising costs.

A UBCM survey found nearly two-thirds of municipalities consider RCMP policing costs to be unaffordable and limiting the delivery of other civic services.

“It’s reaching a tipping point,” Salmon Arm Coun. Kevin Flynn said, adding cities like his may be forced to cut the number of officers.

“I understand that you are concerned,” Attorney-General Mike de Jong responded. “So are we.”

http://www.bclocalnews.com/bc_cariboo/williamslaketribune/news/104136148.html
Perhaps we can ask Harper to spend the hundreds of millions he is spending on training Afghan police on our own police forces in Canada?

No, it makes too much sense, so it would never fly in Ottawa!

BTW, why should it be OUR responsibility to train police forces in other countries?

What a crock!
Governments on all levels are out of control and on a never ending spending spree. The middle class (tax payers) is shrinking and the poor and government workers on the backs of the middle class is ever growing. It will break! You have bank CEO's and government finance ministers telling us to shrink our debt and budget yet they refuse to lead by example. We have no say in anything because governments have loop holes which allow them to ignore the people who pay their over bloated pensions and wages. We don't even get a say in their pay raises. Where else other than government does the employee dictate their pay raises? It is ridiculous and has to stop. We need to vote on big ticket items such as the Owelympics and government should not have free reign with our money. It is too easy to spend money they you did not break their backs earning. People are becoming angrier and angrier with the audacity on all levels of governments and the politicians better start noticing. Audits MUST BE DONE on all levels and THE PEOPLE must insist on it. We need to know where our money has gone and the waste has to stop. Immediately!

Thank you Ben for saying what all of us have been thinking and saying for a while now.
Hundreds of millions? How about the hundreds of millions Harper is giving Africa to fight the so called BS climate change. All levels of governments spending hundreds of millions on an unproven hypothesis predicted by computer programs that do not follow real world observations.
Do they have any plan as to increase revenue other then increasing taxes every year? What is the long term strategy of the city. Im curious if there is at least a great scheme as they hold nearly half the land in the downtown core and seem to be spending money like drunken sailors.
While I realize that it is fashionable to bash police in any way possible in the media, why was the majority of the focus in this rant on the Police station?

Last I checked, Policing was a necessity in any city and there will be costs.

Why is there not just as much focus, if not more, on a $50 million dollar performing arts center. Exactly what benefit does this bring to the city?

It costs $10 million more than a Police station, and how exactly does that keep me and my family safe at night? At least with a new Police building I can be reasonably assured that the quality of policing may go up in our city, but what benefit does that center bring me?

Why is there no reverse petition on a "more modest" performing arts center?
Governments deficit spend to distribute new money into the economy. New money that is currently necessary if the private sector and consumers are to remain current on THEIR debt re-payments.

It is a failing policy that, long term, can never work. For the simple fact that all this government spending is for additional "things" which have very REAL "costs" of their own attached to them. And these REAL "costs" remain to be liquidated financially, if they can be ~ which, in their totality, they can not be~ at some time in the future. The problem nowadays is that we've done this too often, for too long, and the 'future' is increasingly catching up to us.

The solution is for us to recognise that so long as all 'costs' are included in 'prices', yet an ever increasing number of those 'costs' are ALLOCATED 'costs' ~ not DISTRIBUTED to anyone as 'incomes'in the same cycle of production in which they've been incurred ~ then the 'incomes' that ARE distributed will collectively always be inadequate to fully liquidate those 'costs'.

Unliquidatable 'costs' represent a cumulative deficiency of consumer purchasing power. Which can only be corrected by a distribution of new money, NOT 'costed' into ANY further production, and paid directly to consumers.

To all of us, because we're all consumers.

This could easily and effectively be done by the issue of periodic appropriate amounts of debt-free "consumer credit" by the Bank of Canada.

This would allow EXISTING costs to be more fully liquidated through increased consumer spending and not pile up, as they're doing now, as increasingly unrepayable debt. The increase in consumer spending is what fuels your economy.

So long as the actual capacity to produce exceeds the desire or ability to consume ~ which in this country it most certainly does ~ goods and services could easily be provided to consumers at a price to them below financial cost, while the retailer could receive the difference between his price as presently computed and what the discounted amount the article sold for, by way of a B of C paid rebate.

The amount below cost is based on the division of the dollar value of all national production in any given period by all national consumption in that same period. This gives a fraction less than one, because we virtually always are producing more than we are consuming. Indeed, over time it could not be otherwise, for how can anyone consume what hasn't yet been produced? There is no such thing as a 'debt' in nature. This fraction can be applied as a discount by reducing prices by whatever percentage it turns out to be for the fiscal period chosen.
Well said Ben!
Unfortunately,politicians on all levels of government always have a plan to increase revenues.
It is called 'increased taxes'.
We know all about that, and it is not exclusive to Prince George.
Politicians are also inflicted with the complete inability to listen to those who elected them.
It is a disease that infects them the day they take office,and begin building monuments to themselves.
Unfortunately,the voters have a tendancy to forget that at election time.
Sometimes we need to storm the gates to get a point across,as has happened with the HST mess.
When the spending never seems to stop,we end up with some form of tax increase...in the case of B.C.,it is the HST, but they could call it anything.
It is interesting that while politicians tell us how broke we are,they just keep spending.
I always wonder...who is behind these mega-projects that just keep adding to the debt load?
Who asks for them?
Is it the taxpayers?
Or,is there more here than meets the eye?
Thank You Mr. Meisner for speaking out
for us!
Andyfreeze, good comment!

We all know what the Fix for this City is"

RIP UP YOUR CREDIT CARD"






cmdrjoe said "Why is there no reverse petition on a "more modest" performing arts center?"

Because we already have a more modest performing arts center - its called Theatre Northwest. Apparantly its not good enough for some people though...
To cmdrjoe... You are right we need a new performing arts center now just as much as we need a new police station right now. We need to stop spending and catch up. For that matter the winter games is as much waste of money as the rest of it. When I have no money I quite spending, but I guess thats the difference... City council is not spending their money.
I always wonder...who is behind these mega-projects that just keep adding to the debt load?

This is not a mystery at all. Every three years we elect a council and Mayor but the bureaucrats at City Hall seem to remain for ever. We should go the route that the good old USA takes with their judges. They are elected so we should elect the CEO at City hall.

This guy remains for ever and he has to create work for his staff and work means more taxes. The current bio e energy project is a fine example. Mr Radloff who is about to retire was given the plumb job to get this project in operation.

Our Mayor is elected and his salary runs close to that of the CEO so now he forgets about who elected hin and gets into bed with Mr Bates and they run the show. The councilors are hungary so they eat what the Mayor feeds them.

And for those who feel that the administrative cost are too high and the bureaucrats are to well fed have a look at some of the big corporations . The administration budget can run as high as 50% of their operating cost.
Cheers
enough with dan rogers!
city racking up the credit card at a alarming rate! stop this madness city hall,we are going to protest
If given a choice I'd rather have a new police station than a PAC. We can't afford either and certainly not both. The Winter Games are going to be a drag on our finances no matter what the touchy, feely rah rah crowd says. The spending has to be reined in; cheap borrowing practices will always come back to bite you. Interest rates will go up again and long before we are able to pay the money back. I'm more than a little concerned with council's Que Sera Sera attitude. Pull out the abacus and do some ciphering for God's sake.
Ben Meisner:-"The USA is broke, dead broke. They are being propped up by countries such as China who are fearful that if they don’t continue to extend credit they will be left with trillions of dollars in unpaid bills with little or no prospect of collecting."
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Collecting what, Ben? And how? The ONLY way China, or any other foreign country that holds American debt can collect it is, literally, to "Buy American".

That's the LAST thing the Chinese want to do.

Why? Because if the goods they're now making in China were imported instead from America there'd be an awful lot of unemployed Chinese.

The Chinese government, by and large, DOESN'T WANT a 'trade' of goods made in China for alternate goods made in the USA.

It wants American 'money' ~ international credit, really ~ that the central Bank of China can convert to Chinese 'money'.

Why? Because under the current financial system NO modern industrialised country is fully financially self-liquidating. It CAN'T ~ whether it wants to or not ~ buy ALL its OWN production at the normally accounted for costs of its making and pay for it from the total amount of incomes distributed to its citizens in the form of wages, salaries and dividends in the course of making THAT production.

Look at it another way. We've all heard California is in dire straits financially. But if a massive earthquake leveled San Francisco and Los Angeles tomorrow, would the survivors be consigned to sitting on the rubble for the rest of their natural lives, unable to rebuild those great cities "...because America, and especially California, are flat broke, and we just don't have any money"?
Hey pgmatt... City council doesn't spend like drunken sailors. Drunken sailors spend their own money. Or so I understand.
A mayor and a council are in my opinion being directed by who actually runs the affairs of the city. By affairs I mean the fixed expenses like wages, salaries and servicing of the ever increasing debt, handouts to charities, etc. Then there is (hopefully) some money left over to repair roads, sewers, build new infrastructure etc. The city manager manages the city, as he should. If council and mayor would obstruct the implementation of his skills and visions, how could he possibly manage properly?

And an open disagreement wouldn't be allowed to be viewed by the public no matter what!

A council and a mayor basically have to rubber stamp what comes down from a top manager because it is a manager who has all the information, experience and education to set both short term and long term strategies.

If a manager's vision is extravagant rather than down to earth and practical then there would be a very large problem for those who always have to foot the bill.

Architects often suffer from going for the extravagant rather than the practical because the practical is usually less costly and less glamorous, less apt to satisfy the professional ego.

The drift of Retired's comments is right on the button and it applies to basically every city which has a manager and a council/mayor.

A council and a mayor are the front line people who must present the topics and directions as set by a manager to the public and deal with the often dissenting input from the public.

A manager just sits in the background and observes and takes notes to plan the next steps.

It is easy to spend a lot of money as long as it is not one's own money which is at stake.

Retired: 50%??? In large corporations yes but there are about three times as many 'inside workers' in the city as 'outside workers'. Probably too, their salaries are equal to, if not more, than the outside workers who also lean on their shovels. I mean $75.00 for a five minute boo at a new zero tolerance stove installation where the old uncertified and 'lots of tolerance'(insurance approved)stove had been?

And just where did all the money go that used to be spent on road upkeep, necessitating a hike in taxes just for that? Have we seen any imrovement in road repair? So where did the 'new' money go now? Are we going to have another tax increase to cover the one that was supposed to repair our streets?

Where does it all end and we finally get some bang for our buck?
"Are we going to have another tax increase to cover the one that was supposed to repair our streets?"

Yes.