How true. A couple of points should be re-emphasized again and again. As various levels of local and regional government start to really feel the pinch a number of actions will be initiated before default. Why? Default would place the government employee’s benefit plans in jeporady. That cannot be tolerated.
So what will happen?
Taxes will be raised as much as possible.
New taxes will be invented.
“Project” bond issues will be undertaken, especially those which will be able to quietly apply a significant portion of the debt to operating expense for government employees who just happen to be participating in the project. It should be noted that the largest city and county defaults in recent history also were the entities that had bloated government employee payrolls justified by the avoidance of services by outside entities and contractors who could have been resized as the need arose. Instead they embraced large municipal works departments that characteristically demonstrated classic government inefficiency, which in itself increased costs.
Importantly this multitude of government workers could also be relied upon to vote in favor of whatever scheme the government proposed.
This could even happen on a Weatherford or Parker County basis. A lot will depend on the intelligence and interigity of councils and department administrators. Be careful and understand the imbedded issues. Use the ballot box to return the good managers and supervisors, and also to eliminate those who have demonstrated an unwillingness to truly respect the taxpayer.