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Jefferson, Harrisburgh, and Detroit

Discussion in 'Politics (deprecated)' started by atbell, May 31, 2010.

  1. atbell

    atbell TRIBE Member

    All three are on the brink.

    To date only one city, Menasha, Wis, has defaulted on it's debt obligations.

    Now it looks like three others are about to go...

    No legal obligation? to what, pay back debt ... oh that could be trouble.
     
  2. Hi i'm God

    Hi i'm God TRIBE Member

    Oh no the world can't go on without Detroit.
     
  3. Puma

    Puma TRIBE Member

    its not just Detroit there are many cities in the USA and in Canada who wont be able to support the heavy burden of the public union and the spend it or lose it attitude the government employees have. Running a Nanny state is expensive.

    It doesn't take a brain surgeon to figure out that the private sector workers who are making less and less and are taxed more and more wont be able to pay the ever increasing public sector workers salaries and bonuses and expense accounts and all kinds of benefits what they receive more and more of every year. Sooner or later the government will not be able to just increase taxes or come up with new taxes, because soon the private sector workers will have nothing left for the government to tax.
     
  4. Hi i'm God

    Hi i'm God TRIBE Member

    How soon will this be cause I'd like to stop paying my taxes now.
     
  5. atbell

    atbell TRIBE Member

    A good question.

    I'm willing to bet that the Tea Party has some pretty strong 'lets all stop paying taxes' currents. If that happens there's going to be some problems, or maybe changes is a less pesimistic spin :D

    I don't find the collapse of regional gov. as striking as the loss of the money that investors currently consider 'safe' bets. If municipal bonds begin failing all of a sudden the balance sheets of muni-bond holders look worse and another cascade of losses and failures can be expected.

    What I think will happen is that the state / federal governments are going to start stepping in to back the muni's. Unfortunately this creates an incentive for all muni's to default. Why would one region pay up when all the others are getting bailed out?

    All part of the unwinding of what I've long held to be the process of debt de-centralization which began some time in the early 80s. As this decentralization continues to unwind the US Federal financial position is going to keep getting worse until those that evaluate state finances finnally see what a disaster the books just south of the boarder are in.
     

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