I’m really disturbed by what’s happening in Alabama.
You’ve probably heard– Jefferson County/Birmingham’s board of knucklehead politicians has managed to drive local finances into the ground over the last few years. Faced with unserviceable debt and a string of large losses from complex derivative instruments, the county is effectively bankrupt.
The good news is that the government is being forced to make deep, deep budget cuts, including ‘essential services.’ Personally, I have no problem with this– I have long wondered why nuisances like driver licenses, license plates, and business permits even exist, let alone be considered ‘essential.’
The disturbing part is that the local government is paring back its police force. By itself, I would welcome this as good news– I have a natural disdain for ‘law enforcement’ and would rather take my chances with criminals than with police.
Furthermore, I have lived in many places where local police forces take a backseat to private security guards who are charged with actually protecting people and property instead of harassing customers.
Unfortunately, instead of going the private route, Jefferson County is talking about calling in the National Guard… and the thought of simultaneous military HMMW-V patrols in Baghdad and Birmingham is not a vision of America that I care to participate in.
It’s not isolated to Alabama– this scenario is playing out in city halls and state legislatures across the United States. I believe wholeheartedly that this will be the ‘next next’ shoe to drop (after commercial real estate– more on this later in the week): an implosion of state and local government finances.
During good times, unemployment was low, real estate values were high, and consumer spending was an addiction. Consequently, tax revenues from income, property, and sales were very high. Governments were living high off the hog with the public’s money building bridges to nowhere and expensive office buildings to house their bloated bureaucracies.
Today, tax revenues have dried up but the bloated bureaucracy remains. Suddenly the interest payments on all those school and sewer bonds are unserviceable and the parks department is bitching for new lawn mowers… ‘essential services.’
What’s happening in Jefferson County is simply a prelude to this requiem. After the commercial real estate dust settles, the preponderance of state and local governments will be in a similar state of fiscal emergency. Local governments will have their hands out to the states, and states will have their hands out to the federal government.
This is when things will become very difficult, and it goes much further than military personnel patrolling the streets.
Emergency taxes, wealth confiscation, and capital controls will likely be part of this future as the government ensures that every American is doing his/her patriotic duty to bail out the government.
Each of us will be faced with a choice– bail out… or bail? Continue participating in this corrupt bureaucracy, or find freedom elsewhere? After all, there’s a lot of wonderful places in the world and now is the time to prepare– do you have a lifeboat strategy yet?
If not, I strongly recommend you take some time to listen to asset protection guru Mark Nestmann. We interviewed him a few weeks ago and his advice is worth its weight in gold. There are steps that you can take now to protect your wealth, protect your family, and protect your freedom– click here to listen to the interview.