News just in from the Department of Silly Ideas
All public services in the US City of Chicago have been shut down for the day and the city staff have had to take the day off as an enforced unpaid holiday.
This is being done, we are told, in an attempt to deal with the city’s £184m budget deficit.
What?
While other folk might read this story and think fulsome, praising thoughts along the lines of ‘Good for them, at least they’re trying to do something about the problem’, all I can do is sit here and think…
What?
I’ve heard of the silly season, but has that now become the stupid season?
Am I honestly expected to believe that all of the private/partnership organisations who have contracts with the City of Chicago won’t be charging for their services, even if their contracted services are not taken up?
Really?
Because if that’s what I’m expected to believe, I don’t believe it.
So what’s the real saving here?
Are the police still patrolling the streets? Well yes, of course they are.
Are the fire services still on the same degree of on-call readiness? Well yes, of course they are.
So what is really being saved here, apart from the salaries of the teachers and administrative staff?
Overhead costs on the building services?
Maybe.
A bit of electricity here or there?
Possibly.
But everyone knows that a building standing idle – an asset not in the production cycle – is a loss-maker, everyone knows this simple rule of economics.
Or, to put it another way: an asset not in use is a liability. It ceases to be an asset when it is not in production.
So really, all that’s being ‘saved’ is the salary that would have been paid to the city workers.
Except…
Had these same city workers been in paid employment they would have paid taxes on their salary, and that’s a big bunch of lost income to the US Treasury.
How is taking revenue away from the US Treasury a saving?
No, go on, I’m all ears. Please tell me; how is this exercise saving the city of Chicago money!
Oh, and one final thought.
America, being the over-litigious society that it is; how long do you think the city leaders will have to wait before a collective of Chicagoans club together and sue the living shit out of the city for the day of lost services that they have paid for via their taxes.
Saving?
Don’t make me laugh.
Do I look that naive?
So I’m not claiming any particular knowledge on this subject but your comment brought caused my brain cells to fire for once. I’m not sure what you would propose as an alternative to this situation. The furlough days are to avoid permanent layoffs and/or permanent reductions in services on offer. It’s a seemingly sensible way to cut short term costs without permanently affecting long term employment opportunities.
Obviously, essential health and safety services are not affected. That goes without saying.
There’s no reason why Chicago would give a shit about lost taxes to the US Treasury since thats a Federal income tax that benefits Chicago only indirectly and not in direct monetary form (Federal services and support of organizations). If the need is to immediately improve short term cash flow, this argument is a non starter.
Also, re: your argument about use of assets, it’ll depend on if the buildings are fully depreciated or how/if they classify the buildings themselves as assets or not. Theoretically your argument is correct, however, how valid is it if this is not a profit making business or manufacturing type location? I don’t know the answer to this, its an interesting point you’ve raised here.
Also, litigious or not, it depends on if Illinois is a “no fault” employment state as to whether or not people would potentially sue. “No fault” means employers can terminate an employee for any reason at any time, making it virtually impossible to sue an employer unless drastic forms of misconduct (sexual, racial discrimination, etc) are present. I have no idea if Illinois is like that, Texas is though and employment law is NOT lucrative here.
If you want to argue about the inefficient various forms of government that exist here on the city, county, state and national level, I’m right there with you. Not in this case though, I don’t see any other obvious solutions short of completely tearing down the city infrastructure and starting all over again. Not likely to happen here (although I have hopes that my home state of California will go bankrupt- they desperately need to start all over again there).
Anyway, interesting take…well done.
I can’t comment on the detail here. I hold my hands up and declare that I have very little understanding of the political and financial system and until recently, when LC at Liars and Lunatics explained in layman’s terms I wasn’t entirely sure what triggered the economic crisis that we are now trying to plough through. Sometimes I feel stupid and blinkered because I don’t naturally “get” these things.
What I do know is that everyone is feeling it, some more than others of course, but everyone. There’s this Lost Generation of NEETS and I fear that I will be swallowed up in to it as my company considers putting my team on redundancy consultation for the second time in a few months. My flatmate gave up his London dream to return to Turkey after 4 months with no work. He is still unemployed out there and going back into education to buy time while the economy recovers sufficiently for there to be work out there for him and the thousands of others like him. Our budgets at work have been slashed. They have asked us to cover the cost of some expenses that previously we would have claimed. My Dad is preparing to help me cover the costs of running my new flat for the six months that I will have to be tied in to it if I do get laid off.
And when I read about it in the papers – as we do every day – I just think “Holy shit, how on earth are we going to get back on track?” and I am grateful that I am not one of the people tasked with trying to work out the next step to take. I know that we all have our part to play in this, and keeping my productivity high despite motivation falling is where I can help. I know that the economy must keep moving to pull out of it, but where sectors are already failing, what can we do?
I would assume that one day of wages is more money than what the workers pay back in taxes over that same day of wages. Plus, only a small fraction of these taxes goes to Chicago. So, you know, the lost income is less than the money that wasn’t spent.
And while it’s true that unused buildings are a liability in the long run, I’m not sure that holds when the buildings are unused for a single day.
Of course, California has been doing that with the DMV and other public services for a while now and it’s clearly not enough… but the problem is on an entirely different scale over there.
Well thanks for the views.
That the city of Chicago has got itself in to this state in the first place… well, this just seems to be a point that no-one’s picking up on. And the argument that it’s OK to withold state taxation is either childishly naive or I’ve missed the news bulletins about the city of Chicago opting out of all of the Federal schemes like, erm, the US had a national defence force last time I checked. And the NTSB. And the FBI, CIA, NSA etc; it’s far too easy to overlook the obvious sometimes.
It seems to me that all this exercise is, is another stick to penalise the public – whether it’s the public who work for Chicago or not. It’s an exercise in distraction, designed to stop people from stepping back from the problem and asking ‘How the fuck did we get in to this mess and who are the people who brought us here’.
Because these are the questions that the sheeple aren’t supposed to ask.
The state of California has been issuing I.O.U.s to their employees. Talk about stupid!
Omaha is talking about the same thing. http://www.omaha.com/article/20090820/NEWS01/708209942
Also, because the proposed “entertainment tax” proposal fell through, they’ve decided to lay off 150 some-odd city employees.
In the end, my bet is on raising property and fuel taxes.. and maybe cigarette and alcohol taxes. It’s what they normally do.
“sheeple”
LOL
Not only is the state of CA issuing IOUs… but the banks of CA aren’t accepting them anymore. Uh-oh.