Stockton, CA filed for bankruptcy

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bree09
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Re: Stockton, CA filed for bankruptcy

Post by bree09 »

Pyperkub wrote:Yeah, I think the main reason they declared bankruptcy wasn't solely this, but rather that their main tax vehicle for the entire county was declared illegal in addition to this, so that the associated bond payments were as much or more than the entire County revenue.
The city of Stockton, California's bankruptcy case may become the single largest such case in history. But that is not its only Guinness-worthy record recently. The conditions behind a recent court ruling add up to the largest parking ticket ever served. And it reiterates a simple financial lesson for us all.
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GreenGoo
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Re: Stockton, CA filed for bankruptcy

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Let's see where this goes.

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Bruce
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Re: Stockton, CA filed for bankruptcy

Post by Bruce »

Likely lost in the election coverage but I will put this here.

http://www.theaustralian.com.au/busines ... 6511806813" target="_blank

City councils that invested in CPDOs have won a case against S&P for professional negligence in applying AAA ratings to piles of crap.
The court found that ratings agencies had a duty of care and a statutory duty to investors directly - and not just to the banks and financial intermediaries who commission their opinion - when expressing opinions regarding the rating of complex financial products.
At least we are doing something to hold these vermin to account.
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Re: Stockton, CA filed for bankruptcy

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As pure coincidence, I was just thinking that I needed to read another big corp/bank getting its execs spanked for shennanigans, as I enjoy reading those a lot. Your post is somewhat related, as it illustrates corruption within the financial sector, which is almost as good.

Is anyone going to actually take a hit? Probably not. Even with this ruling, enough dancing will be done so no one person gets the full blast, but it's still nice to read, as Bruce points out, that this is not just business as usual. At least it's in the papers/news, which is more than it is usually.
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Re: Stockton, CA filed for bankruptcy

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GreenGoo wrote: Is anyone going to actually take a hit? Probably not. Even with this ruling, enough dancing will be done so no one person gets the full blast, but it's still nice to read, as Bruce points out, that this is not just business as usual. At least it's in the papers/news, which is more than it is usually.
I'm guessing that any fine will be less than the amount lost by investors and less than the amount gained by the agencies (selling ratings to banks) and the banks who commissioned them.
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LordMortis
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Re: Stockton, CA filed for bankruptcy

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Little Raven wrote:Taking issue with the amount asked for is one thing. Figuring out who owes who how much is going to get very complicated very quickly, and that's why we have financial analysts and judges and stuff. I'll leave it to more informed types than me to make that decision.

But your original response seemed to indicate this lawsuit was without merit, and merely an extortion racket. That seems absurd to me. If the banks really did manipulate the LIBOR, they absolutely opened themselves up to litigation.
Nope. Banks simply get fined so they can continue with a new operating cost. Litigation is reserved for people... Or maybe it will be if they do it in future. It's unclear if they will actually punish the manipulators.

http://www.bbc.co.uk/news/business-20678302" target="_blank
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Re: Stockton, CA filed for bankruptcy

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And now Stockton wants to try UBI:
Stockton's 27-year-old mayor. Last week, he announced the launch of an experimental program that will give people like his mom about $500 a month, with no strings attached.

Stockton will likely become the first city in the nation to test out a version of universal basic income, an economic system that would regularly provide all residents enough money to cover basic expenses, with no conditions or restrictions.
I, uh, what????

You were bankrupt 5 years ago and now you're giving away money? WTF?
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Re: Stockton, CA filed for bankruptcy

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Pyperkub wrote: Fri Oct 27, 2017 9:03 pm And now Stockton wants to try UBI:
Stockton's 27-year-old mayor. Last week, he announced the launch of an experimental program that will give people like his mom about $500 a month, with no strings attached.

Stockton will likely become the first city in the nation to test out a version of universal basic income, an economic system that would regularly provide all residents enough money to cover basic expenses, with no conditions or restrictions.
I, uh, what????

You were bankrupt 5 years ago and now you're giving away money? WTF?
They exited bankruptcy protection in 2015. They're looking at running a pilot program with maybe a few hundred enrollees (depending on available funding), not giving free money to everyone right out of the gate.
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Re: Stockton, CA filed for bankruptcy

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Stockton’s Basic-Income Experiment Pays Off
Two years ago, the city of Stockton, California, did something remarkable: It brought back welfare.

Using donated funds, the industrial city on the edge of the Bay Area tech economy launched a small demonstration program, sending payments of $500 a month to 125 randomly selected individuals living in neighborhoods with average incomes lower than the city median of $46,000 a year. The recipients were allowed to spend the money however they saw fit, and they were not obligated to complete any drug tests, interviews, means or asset tests, or work requirements. They just got the money, no strings attached.

These kinds of cash transfers are a common, highly effective method of poverty alleviation used all over the world, in low-income and high-income countries, in rural areas and cities, and particularly for households with children. But not in the United States. The U.S. spends less of its GDP on what are known as “family benefits” than any other country in the Organization for Economic Cooperation and Development, save Turkey. The Temporary Assistance for Needy Families (TANF) program spends less than one-fifth of its budget on direct cash aid, and its funding has been stuck at the same dollar amount since 1996—when the Clinton administration teamed up with congressional Republicans to turn it into a compulsory-work program. Those changes sliced into the safety net, allowing millions of people to fall through.

Most adults without children have no program to help them keep gas in the car and a roof over their head, no matter how poor they are. Most families with kids don’t have one either. In the United States, poverty is used as a cudgel to get people to work. We got rid of welfare for poor families’ and poor individuals’ own good, the argument goes. Give people money, and they stop working. They become dependent on welfare. They never sort out the problems in their life. The best route out of poverty is a hand up, not a handout.

Stockton has now proved this false. An exclusive new analysis of data from the demonstration project shows that a lack of resources is its own miserable trap. The best way to get people out of poverty is just to get them out of poverty; the best way to offer families more resources is just to offer them more resources.
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Re: Stockton, CA filed for bankruptcy

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I do take some issue with calling $6000 a year a "basic income." In California, even. That's not a basic income. That's nowhere NEAR a basic income.

I mean, don't get me wrong, an extra $500 a month is no doubt very nice. But it's not going to change any behaviors, for good or for ill.
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Re: Stockton, CA filed for bankruptcy

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Little Raven wrote: Sun Mar 07, 2021 2:28 am I do take some issue with calling $6000 a year a "basic income." In California, even. That's not a basic income. That's nowhere NEAR a basic income.

I mean, don't get me wrong, an extra $500 a month is no doubt very nice. But it's not going to change any behaviors, for good or for ill.
It's not about changing behaviors - it's about giving a little extra help so people can have different choices.
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Re: Stockton, CA filed for bankruptcy

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It's enough to take you from having to choose whether to get the car fixed or buy food to doing both. For people on the line, it's significant. For a single parent making minimum wage in CA, it's around a 30% increase in what you actually end up with. That is significant. Not enough to live well, no, but enough to make a big difference in paying the bills and buying food.
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Re: Stockton, CA filed for bankruptcy

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Don't get me wrong, I don't oppose it at all. I just don't think it's a very meaningful experiment when it comes to basic income. Or at least, basic income as the concept is generally discussed.
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Re: Stockton, CA filed for bankruptcy

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Little Raven wrote: Sun Mar 07, 2021 2:28 am I mean, don't get me wrong, an extra $500 a month is no doubt very nice. But it's not going to change any behaviors, for good or for ill.
The researchers also found that the guaranteed income did not dissuade participants from working—adding to a large body of evidence showing that cash benefits do not dramatically shrink the labor force and in some cases help people work by giving them the stability they need to find and take a new job. In the Stockton study, the share of participants with a full-time job rose 12 percentage points, versus five percentage points in the control group. In an interview, Martin-West and Castro Baker suggested that the money created capacity for goal setting, risk taking, and personal investment.
I can't tell you if that's outside of the noise band on random chance, but it seems like it changed something, no?
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Re: Stockton, CA filed for bankruptcy

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Fretmute wrote: Mon Mar 08, 2021 3:49 pmI can't tell you if that's outside of the noise band on random chance, but it seems like it changed something, no?
Maybe? It's such a small group, and such a small amount....it's difficult to say.

I'm cautiously optimistic about the promise of Basic Income, but $6000 a year in California is REALLY small. Again, I'm not opposed to this - I'm generally all for giving people money - I'm just hesitant to look at any of the results as being very representative.
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Re: Stockton, CA filed for bankruptcy

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According to official federal poverty statistics, 12.8% of Californians lacked enough resources—about $25,500 per year for a family of four—to meet basic needs in 2018. This represents a modest decline from 13.3% in 2017 and is slightly above the lowest recent rate of 12.4% (in 2007). Moreover, the official poverty measure does not account for California’s housing costs or other critical family expenses and resources.
https://www.ppic.org/publication/poverty-in-california/
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Re: Stockton, CA filed for bankruptcy

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Little Raven wrote: Mon Mar 08, 2021 4:06 pm
Fretmute wrote: Mon Mar 08, 2021 3:49 pmI can't tell you if that's outside of the noise band on random chance, but it seems like it changed something, no?
Maybe? It's such a small group, and such a small amount....it's difficult to say.

I'm cautiously optimistic about the promise of Basic Income, but $6000 a year in California is REALLY small. Again, I'm not opposed to this - I'm generally all for giving people money - I'm just hesitant to look at any of the results as being very representative.
I think it's fair to say that giving people $6,000 / year doesn't tell you much about what the results you'd get if you gave people $6 million per year. So this experiment doesn't prove that you can give people any amount without discouraging work (if it's important to not discourage work), but I'm not sure that anyone was claiming that it did.

But it does provide support for the idea that *some* level of basic income support can be good policy.
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Re: Stockton, CA filed for bankruptcy

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Little Raven wrote: Mon Mar 08, 2021 4:06 pm
Fretmute wrote: Mon Mar 08, 2021 3:49 pmI can't tell you if that's outside of the noise band on random chance, but it seems like it changed something, no?
Maybe? It's such a small group, and such a small amount....it's difficult to say.

I'm cautiously optimistic about the promise of Basic Income, but $6000 a year in California is REALLY small. Again, I'm not opposed to this - I'm generally all for giving people money - I'm just hesitant to look at any of the results as being very representative.
Minimum wage in CA is $12/hr. That's around $24,000/year. Giving someone a 25% boost in a pay is a big deal.
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Re: Stockton, CA filed for bankruptcy

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~$21,000 that actually goes into your pocket, and that's assuming that you job gives you a full 40 hours (a lot of minimum wage jobs do not give 40 in order to avoid paying benefits - they'll hire three people at 30 hours rather than two at 40 and save money doing it.)

Side note: This would be another benefit of universal health care I hadn't considered. There'd no longer be as much of an incentive to under-work employees, which would mean more people being able to make a living at minimum wage and an improvement in lifestyle as cheaper, non-insurance benefits kicked it. It might, however, mean fewer jobs.
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Re: Stockton, CA filed for bankruptcy

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Blackhawk wrote: Tue Mar 09, 2021 3:00 pmSide note: This would be another benefit of universal health care I hadn't considered. There'd no longer be as much of an incentive to under-work employees, which would mean more people being able to make a living at minimum wage and an improvement in lifestyle as cheaper, non-insurance benefits kicked it. It might, however, mean fewer jobs.
It is probably net neutral to jobs. One of the most variable labor cost components is health care. It is one of the reasons why I've always been surprised big business doesn't push for it because it eliminates one of their most painful issues - managing their health care plans.
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