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Why US Cities Are Going Bankrupt!

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    August 10, 2012

    In an effort to rein in costs, the city of Camden NJ will fire its entire 270 member police force and instead will use Camden County officers.
    Mayor Dana Redd and Police Chief Scott Thomson noted that for the same price, Camden can have 400 county officers on staff. That is nearly a 50% increase in the number of officers for the same price.

    Of course the unions are howling.

    In these cases, the county typically hires most or all of the officers at lower wage and benefit levels, but the article only notes a very vague “some current Camden officers will get jobs on the new force.”

    Why Cities are Going Bankrupt 

    Cities should strive to provide the most services at the least cost to taxpayers. However, public unions strive to provide the fewest benefits at the most cost.

    Is it any wonder cities are going bankrupt?

    Police and firefighter wages and benefits are crippling cities across the nation. Mayors are often in bed with unions rather than do what is best for the city.

    I am a firm believer that every city under onerous police and firefighter contracts, most likely nearly every major city (if indeed not all of them), should do the same thing Camden did.

    Camden Quick Facts

    A quick check of City-Data shows Camden is economically poor with an unusual spike in home prices in 2007.

    • Population in 2010: 77,344.
    • Population change since 2000: -3.2%
    • Estimated median household income in 2009: $26,752
    • Estimated NJ median household income in 2009: $68,342

    Racial Makeup of Camden

    Home Sales and Home Prices in Camden

    Median home price in Camden has been pretty steady at about $50,000 for 5 years. On above average volume, the median price rose to $400,000 in first quarter of 2008. What’s that all about?

    This was just something unusual that turned up while looking up the population of Camden.

    Mike “Mish” Shedlock
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    Images: Flickr (licence attribution)

    About The Author

    Mike Shedlock / Mish is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction.  Visit Sitka Pacific’s Account Management Page to learn more about wealth management and capital preservation strategies of Sitka Pacific.

    You are currently viewing my global economics blog which typically has commentary every day of the week. I am also a contributing “professor” on Minyanville, a community site focused on economic and financial education.  Every Thursday I do a podcast on HoweStreet and on an ad hoc basis contribute to many other sites.

    When not writing about stocks or the economy I spend a great deal of time on photography and in the garden. I have over 80 magazine and book cover credits. Some of my Wisconsin and gardening images can be seen at MichaelShedlock.com.