Posted By RichC on July 10, 2012
Unless politicians “create an environment” that encourages risking capital and investing in American businesses, it will continue to be a struggle to grow our economy. I’m seeing more cities and counties running out of tax revenue and many more will be forced to declare bankruptcy unless thing change soon. Out of work and financially stressed taxpayers can’t continue to fund their public sector workers and from what we are seeing in Washington DC, it doesn’t look as if they are close to a solution that encourages growth and business investment. The unknown cost of Obamacare and the recent rhetoric of higher taxes discourages putting money at risk (investing in companies) and oppressive regulations in recent years make it restrictive to start new businesses or expanding old ones … in fact it encourages shutting them down. From what I can see, we’re not any closer to creating private sector jobs or accelerating the economy until we see change in Washington DC.
An article in the WSJ today highlights a growing concern as local governments are finding it impossible to meet payroll … let along fund pension plans for public employees.
Mayor Chris Doherty, a Democrat, temporarily cut the wages of police, firefighters and others to $7.25 an hour Friday, hours after a judge issued an injunction requested by three unions that represent most of the workers. A lawsuit filed July 2 in Lackawanna County Court on behalf of the unions argued that cutting the salaries unilaterally would violate the workers’ contracts under state laws governing public employees as well as federal law.
Meanwhile, Scranton’s business administrator said the city had just $5,000 in the bank last week after transferring enough money to cover the city’s payroll at $7.25 an hour, the state’s—and the nation’s—minimum wage. Mayor Doherty has said that once the immediate crisis is over, workers will be paid their deferred pay.