Skip to comments.The New Normal: Municipal Bankruptcy
Posted on 07/11/2012 12:56:40 PM PDT by Cincinatus' Wife
Half a million Californians now live in bankrupt cities, as San Bernardino joins Stockton in declaring insolvency thanks to a $46 million deficit (a smaller city also declared bankruptcy this month). Lest anyone think this was a result solely of the 2008 housing bubble and financial crisis, Reuters reports that:
the city attorney general James Penman said San Bernardinos city officials had been submitting false accounting documents for 13 of the last 16 years in an effort to hide the real financial situation of the city.
San Bernardinos mayor since 2006, Patrick Morris, said he had never heard of allegations of fraud in the citys accounting documents. So, felony malfeasance can be added to the deficit spending, unsustainable pension plans, and unresponsive government that, according to the Los Angeles Times, has left only the city only $150,000 in the bank. That means the city has less than one dollar in savings for each of its 209,000 residents. The Times goes on to note that the Chapter 9 filing will allow San Bernardino to renegotiate labor contracts, stall payments to creditors, and insulate the city from large lawsuit judgments. But the real fear is that if the city cant make the next payroll, it will effectively shut down, including closing police and fire services.
(Excerpt) Read more at nationalreview.com ...
I’ve got an answer for them - they can invite illegals in to compete with Americans, give money to worthless ‘green’ companies, and borrow, borrow, borrow to keep liberal dreams of high speed rail going...
“It is terrible to contemplate how few politicians are hanged.” G.K.Chesterton
Now, if there are any cojones left, those holding office during those times will be prosecuted.
And don’t even think of immunity.
It’s the guillotine with full video coverage.
Heck, if they charge per view, they’ll recoup the funds within a week.
They don't care about the Taxpayers' struggles to PAY THEM, they just want THEIRS.
Every government Employee Pension Fund should have to STOP COLLECTING DUES, until Solvency returns; no more money-laundering to the DNC of Tax Dollars, and disband ALL PUBLIC SECTOR UNIONS, and REPEAL DAVIS-BACON.
As long as Unions are controlling the populace, America will go bankrupt and debt will continue to rise.
You KNOW The Messiah and his ass-clowns in the Senate and House will cry "for the Middle Class", to FORCE Federal Taxes to be raised to bail out States and Cities Union employees AND their Pensions, to buy their votes with OUR MONEY. (Think GM, Chrysler, etc., etc.)
$150,000 in the bank for San Berdoo. Geez, one has to wonder, albeit not for very long, as to the mentality of people who could not see this happening long in advance or let’s say...A FREAKING MONTH ago?
We’re going to see this cascade into an avalanche of muni BKs that will accelerate like nothing anyone has ever imagined before. Well, OK, maybe ticket sales at a Justin Bieber concert.
As long as this is steered AWAY from bailouts, and towards Chapter-11 (or whatever # applies to local govt), all will be well. The budget-killing pensions and health plans will get pared to sanity, and life will go on. Its the ONLY way to keep the problem local.
Look for the union label.
“As long as this is steered AWAY from bailouts, and towards Chapter-...”
Fair enough as a thought exercise, but how the heck do you suppose this could actually happen?
Medicaid (MediCAL in CA) consumes nominally 25% of most state budgets. I don’t know what pctage of muni and county budgets are consumed by pensions and retiree healthcare, but it’s obviously non-trivial.
Where are these govt’s going to get the monies? The sources do not exist other than local taxation, and in CA, the revolt against this is heating up big time. My supposition is that police, fire, and local services are destined for collapse, more or less, together with easily foreseeable chaos in the streets. That’s the point where armed internal conflict might just occur, or, the allegedly “sane” populace votes in (via punitive self-taxation) its own little band of fascist law-enforcers. I don’t know the answer, I don’t know the threshold of tolerance where the people will put up with no more chaos.
If you think they were cooking the books in the city, think about Calpers. Calpers is operating with a projected 7.5% return on its investments .... really? Those cities are pikers compared to the states .... Californicate, Illinois, Michigan, etc.
“The budget-killing pensions and health plans will get pared to sanity”
I was listening to Tom Sullivan on the radio this afternoon. He was discussing the plethora of muni bankruptcies and posed this question to the public employees and the PE retirees: “ do you really think that you will get your pension?” He was reading off the list of salaried jobs in San Bernardino and also noted the fact that the cops and the fire fighters can retire at 50 and the rest at 55, with something like 70% to 90% of last salary in pension plus multi thousand dollar healthcare benefits per year all adjusted for COLA. His question was where do you think that all that money for you to live another thirty years on the backs of the taxpayers is going to come from. It’s multimillions per employee!
Isn't there a state or federal law against that???
Remember how they attacked merideth Whitney last year?
“If you think they were cooking the books in the city, think about Calpers.”
Yeah, back in 2000 when Gray Davis and his RAT band decided to give everyone on the government payroll a large cash bonus, he did so because (or so we have been told) Calpers said that they had the money. Funny thing, their suppositions were based on the idea that today the Dow Jones would be above 28,000!!! California is somewhere north of a half a trillion in unfunded pension benefits going into the near future. And although I live in California, I truly want the state to face bankruptcy.
The California legislature passed a measure protecting fire, police, public employees and their pensioners in the likely and fully expected event that bankruptcies of this nature will be occurring throughout the state of California in the near future ad infinitum.
These public sector employees who caused the problem to begin with are by state law the first to be paid and the last to be fired. Everyone else owed money by the city gets screwed first while those who have been screwing the taxpayers for decades are still protected.
The creditors and bondholders need to go after CALPERS -- it's the Fort Knox of the California Democrats.
Whoa!!! I'll bet a lot of stimulus funds and federal tax dollars are finding their way into that pot of ponzy gold.
Half a million Californians now live in bankrupt cities, .... But the real fear is that if the city cant make the next payroll, it will effectively shut down, including closing police and fire services
***Seems like it would be a good time to be in the firearms business.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.