Is A City Going Bankrupt Near You?

Cities And counties are now seeing their finances collapse. Many are on the verge of bankruptcy or in bankruptcy. During the ‘hay day’ of good times, city governments overspent (as did nearly everyone else), and now the loans are coming due. The problem always is… governments (and people) leverage their paychecks to the maximum – leaving no wiggle room. When their income drops or their expenses increase (without a corresponding pay increase), they suddenly are in deep trouble to pay off their loans and promises. Society itself really is to blame. The system does its best to train us to spend it all – to leave nothing in reserve. It becomes ‘normal’ to leverage every cent. Well now it’s time to pay…

This list just scratches the surface of city troubles out there in America. While as you can see that California is in the worst shape, there are cities all across America that are barely hanging on.

 

Stockton, California
Stockton filed for the largest bankruptcy of any U.S. city in history on June 28, due to the decline in the once hot housing market and intake of debt during its boom years.

Mammoth Lakes, California
On July 3, Mammoth Lakes filed for bankruptcy.

San Bernardino, California
On July 11, San Bernardino filed for the second largest bankruptcy of any city in the history United States. San Bernardino opted to head toward bankruptcy rather than making expansive cuts to its police and fire departments as Stockton had.

Rockland County, New York
The city’s deficit is expected to grow to $95 million, and the belief is that the city may be headed toward bankruptcy.

Scranton, Pennsylvania
Scranton is now roughly $16.8 in the hole on its fiscal year budget. To help cut costs, the city has slashed nearly 400 public employees to $7.25 per hour, due to an inability to pay workers their standard salaries.

Providence, Rhode Island
At the end of May, a former state Supreme Court justice and current state- appointed receiver for bankrupt Central Falls, stated that “I don’t see how they can get out of it without going there [bankruptcy].” The city has a budget gap of at least $20 million.

Detroit, Michigan
Detroit’s economy has been crushed for due to continuing declines in business and the recent housing crisis. The city is under watch of a nine-member advisory board as part of an agreement with Michigan to prevent it from seeking bankruptcy (too big to fail?).

Santa Ana, California
Santa Ana’s credit rating is rated just one above junk stats by Moody’s.

Long Beach, California
Long Beach has renegotiated contracts with its police and fire unions to reduce pension costs, in an effort to cut spending and help the city’s $18.5 million budget deficit. While Long Beach is in better shape than Stockton, it is not far from finding itself in a similar fate.

Costa Mesa, California
In order to save money, Costa Mesa has sold police helicopters, slashed payrolls from 611 to 450. Now, the city is investing 15 percent of its total budget toward capital improvements, doubling what it spent last year.

San Diego, California
San Diego has faced pension issues for many years, and most of the proposed solutions do little to alter the debt that is on mounting on the books.

Los Angeles, California
Los Angeles faces a budget shortfall of $238 million, and has enormous unfunded pension liabilities. It is difficult to foresee a city as large as Los Angeles, the second largest in the United States, going bankrupt. Even so, it faces serious problems.

Oakland, California
Oakland is yet another city experience serious pension issues. The city announced that it plans to borrow $211 million to pay for its pension problems.

data from www.businessinsider.com

 

What difference does this make to me (us)? To KNOW that we are not out of the woods, so to speak. In fact, we are just entering the forest with a long way to go until this all unwinds.

Entire nations and most of the western world has OVERSPENT and now it is time to pay.

There are no creative solutions that will avoid the unavoidable (payment of debt).

We are all in an authentic debt crisis which the world is now experiencing, and it can only be ultimately cured in two ways: 1) default on it, or 2) print more money in order to inflate it away. ~ Jim Sinclair

…and that’s the way it is.

 

Appreciate topics of survival, emergency preparedness – or planning for disaster?
Read our current articles on Modern Survival Blog
twitter: MSurvivalBlog
Facebook

Similar Posts

9 Comments

  1. Don’t forget Harrisburg, PA went bust early on. We really need to form a committee and go Iceland on the political, corporate, banking and media. Having said that, you might be interested in http://www.deckofdirtydeeds.com. A creation I came up with in disgust of these 4 groups dictating our life today.

  2. I think Sockton is going to be one of the worst cities in the country to live in very shortly. They already had very high crime stats. Then they cut off both their own arms and legs before filing bankruptcy. All their services have been cut to the bone and more. I would expect crime to escalate, businesses to leave town, fires with little to no response, and population to decline rapidly.
    Other cities and counties seem to have been handling being broke much better than Stockton. At least they don’t seem to be looting themselves the way Stockton has.
    Any of the areas that are going broke and firing their employees to save money instead of reigning in bloated spending, are going to be hellholes to live in very soon. (everybody knows you can’t save money by firing necessary workers, but you CAN save money by not spending 3 million bucks on that new clock tower in front of city hall)

  3. My city just tried to sell the electric company they own(looks like those smart meters that replaced the employees didn’t save that much after all), but even though were in a hole, they still managed to buy 15 brand new cars for the PD, all with built in plate scanners. Along with red light cameras on damn near every corner now… You cant even go out with tinted car windows, or missing a hub cap… Hell don’t even try to register your car for the first time, or get a drivers license now either. Screw you to the wall for every penny….

    Really though, This is blown way out of proportion. I have complete faith that most of our cities will get us out of the red without having to resort to…..
    O sh*t, you know, just stay in your house, lock the door. Wait, better to go squat in one of those empty abandoned foreclosed houses(the ones that don’t exist anymore because home sales are going through the roof once again). That way the code inspector cant fine your @%% for not spending your last pennies on gas to cut the grass, every other day, it just loves to grow.

    I know, get a couple goats to keep it short!

    “Whats that Mr. Animal Control Officer, I cant have goats, city ordinance # what?”
    “O yes, I have dogs, yep 4, yes, all their shots, I’m only allowed to have 2.. What $200! fine?”……..

    “Yes sir, only 2 dogs, no more goats, friends house, very good home, have a nice day!”………..

    “No Belle goat, stop eating the couch!”

    Everyone, just remember to smile each morning! Have your things in order atleast, too.

  4. It’s not just the cities going bankrupt. It’s the cascade effect. All the vendors they stiff, all the banks that loaned them money, all the retirees owed pensions/benefits. The trickle down theory at work. Yet at every turn, there is a big financial firm ready to write more debt for them (for a fee up front of course) so they can borrow more money. I know in my state, there is becoming a very real suburb vs city battleline as the cities suck more and more of the state’s revenue into their black holes, while the suburbs get almost nothing back for the money they send to the state. Unfunded liabilities as far as the eye can see. The politicians from both parties just hope they can push it off another couple of years at a time so they don’t have to deal with it.

    1. You bring up a very good and powerful point… the trickle-down affect. It’s all very complicated, while the notion itself is fairly simple. Uncertain times for sure…

    1. I hear what you’re saying… and I would agree that the liberal mentality is generally more likely to overspend (IMO), but I also believe that there are plenty of republicans (republicrats?) that do their share of spending too.

Leave a Reply

>>COMMENT POLICY
>>USE OPEN FORUM for Off-Topic conversation

Name* use an alias