Thread: US Cities at Risk of Bankruptcy

US Cities at Risk of Bankruptcy

Interest-Rates / US Debt
Dec 30, 2010 - 05:33 AM



Video:
http://www.youtube.com/watch?v=ZOzV_vIV ... r_embedded

December 28, 2010

In Michigan, a city is pleading for bankruptcy option and the state officials fear it could start a domino effect with dozens of cities filing for bankruptcy throughout the US.

Press TV's Rhonda Pence reports from Washington.

US Cities at Risk of Bankruptcy

Interest-Rates / US Debt
Dec 30, 2010 - 05:33 AM

PRESS TV writes: Next to the housing crisis, some economists say cities declaring bankruptcy is the biggest threat to the U.S. economy in 2011 More than 100 cities could go bust in the new year derailing the economy in America.

In Michigan, a small city called Hamtramck says it only has funds to operate until March first. City officials have slashed money for boarding up abandoned houses, cutting grass and no money has been set aside to plow snow from the streets.



Video:
http://www.youtube.com/watch?v=ZOzV_vIV ... r_embedded

Communities across the country are in a similar situation and have cut city employees work weeks down to four-days and have eliminated parks and senior centers.

State officials are fearful if Hamtramck goes bankrupt, it will open the door for 30 other cities in Michigan to go down the same path, including Detroit.

Hamtramck has been more dependent on the auto industry than even Detroit, and with the property values going down, the cities tax base is collapsing.

49;29 without a doubt can if you have failure of one large state New York, Michigan , California it could significantly drag down the whole economy

The problem throughout most of the cities in the US is when money was rolling in , governments were very generous with benefits and pensions. but now the money has dried up and cities have legal obligations to pay up, or they will have to renegotiate contracts or file for bankruptcy.

The problems are worse in areas where there have been a large number of foreclosures, a decline in property values combined with unemployment. It's a recipe for a city to go bankrupt.

While the plight of city bankruptcies is getting more attention, the problem is actually systemic in state governments and at the federal level as well.

http://www.marketoracle.co.uk/Article25319.html

These cities need to declare bankruptsy already but not get bailed out, just the authority to restructure contracts and other basics to get under the budget. The longer they wait the worse it will get and its better for states to do it one at a time then all at once and cause another country wide economical disaster.