Armed Polite Society
Main Forums => Politics => Topic started by: Ben on June 27, 2012, 10:10:03 AM
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Stockton is about to declare bankruptcy.
Reading the story, I see the common theme of blaming the majority of their problems on "the burst housing bubble". Yet, what expenses do cities actually have when there is a big increase in housing?
Certainly they may have needed to build some new schools, which now may have less students if families move out. They may have justifiably added some police and fire employees. But what likely happened is they went nutzo with all the new property tax revenue and expanded their local government, with the fantasy thought that property tax revenue would only go up, and never down. Now they lost all that revenue and they decided they need to declare bankruptcy.
http://www.foxnews.com/politics/2012/06/26/stockton-set-to-become-largest-us-city-to-declare-bankruptcy/#ixzz1yyC0NF97
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BWAHAHAH
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Wait what!?!
They weren't able to spend themselves out of debt?
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Wait what!?!
They weren't able to spend themselves out of debt?
Impossible! More spending is the solution! Call Paul Krugman!
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According to Reuters (http://www.reuters.com/article/2012/06/27/economy-stockton-idUSL2E8HQ3XU20120627), Stockton has $700 million in outstanding debt.
ETA: According to the same article Jefferson County, Alabama set the record last year for the largest municipal bankruptcy filing at $4.23 billion. I don't recall hearing anything about that bankruptcy.
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Holy crap. How does a single county in Alabama rack up $4bil in debt? And indeed, it didn't seem to make the news.
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So, what happens now?
Do the creditors get to seize city property? Does the state bail them out?
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So, what happens now?
Do the creditors get to seize city property? Does the state bail them out?
The city officials responsible go to debtor's prison until they've worked off the debt.
(OK, that's only wishful thinking.)
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The city officials responsible go to debtor's prison until they've worked off the debt.
The Milwaukee Wisconsin politicians who run up debts usually move to chicago after they resign, which is almost as good.
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Jefferson County <=> Birmingham
Sewer system
Fancy financing engineered by JP Morgan
Corruption
Kickbacks
The usual
http://www.cnbc.com/id/46626333/?Jefferson_County_Approved_for_Largest_Muni_Bankruptcy
http://www.wbur.org/npr/142207044/alabama-county-bankruptcy-filing-is-biggest-in-u-s-history
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Creditors such as JPMorgan Chase [JPM 36.78 1.07 (+3%) ] had argued that Jefferson County was ineligible for a bankruptcy filing because the county had no bond debt as required by state law. Like most Alabama counties, Jefferson County only had warrants, a form of debt popular in the state since the 1930s that does not require direct voter approval.
How does that happen? Voters don't have to approve the .gov entity taking on debt?
I hope everyone involved gets screwed.
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There's a county commissioner doing a stretch right now.
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Some jackwagon from California was on the O'Reilly Factor tonight (hosted by Juan Williams) saying that austerity would be a horrible choice, they need to spend more $$, they can't let these important social investments go south.
[barf]
Even the liberal Juan Williams was .....not ....really .... buying .... it.