Skip to comments.More California cities at risk of bankruptcy, Moody's says
Posted on 08/17/2012 5:05:51 PM PDT by Oldeconomybuyer
One of the nation's top credit rating agencies said Friday that it would begin a wide-ranging review of municipal finances in California because of what it sees is a growing threat of increased city bankruptcies and bond defaults.
The report also noted the potential for ratings downgrades to fiscally distressed cities, counties, school districts and special districts throughout the state.
Moody's Investors Service issued a report saying that the growing fiscal distress in many cities in the nation's most populous state was putting bondholders at risk.
(Excerpt) Read more at latimes.com ...
Government default processes, when truly completed, precede forced small government.
Actually, since it is unlikely that they will break the political logjam and develop fiscal responsibility, I'm not sure a resort to bankruptcy is a bad idea. They will pay a slight penalty in future borrowing costs, but they can break leases, contracts with unions, and either offload or modify pension programs.
You can’t keep raising taxes on business and expect to attract businesses. CA is a beautiful state, but it started losing its way years ago,thinking it could tax the heck out of everyone and it wouldn’t matter because EVERYONE wants to live there, right? Wrong.