Cities Going Broke

Central Falls, Rhode Island -- is bankrupt. The main reason is it can't afford the pensions for its retired city workers. How the city is digging out of its financial hole may have consequences for city pensions in other cash-strapped towns across the country.

For years, city officials promised robust union contracts and pensions without raising revenue to pay for them. Last August, the math caught up with them. Central Falls was broke, its pension fund short $46 million. It declared bankruptcy...

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Pennsylvania's distressed capital city, Harrisburg, will skip $5.3 million of debt payments due next week, the first time the city has defaulted on its general obligation bonds, to ensure there is enough cash to fund vital services....

So far in 2012, there have been 21 defaults on muni debt totaling $978 million, according to Richard Lehmann, publisher of Distressed Debt Securities Newsletter, who expects the pace of defaults to increase.


"For cities and counties it's starting to happen now because they're running out of cash," he said, noting that Stockton, California, announced a default last month.

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cpwill said:

What? Don't think this belongs in the Presidential Election forum?






Add this to the slow motion very public collapse of California, Illinois....

People are growing used to hearing warnings that we might turn into Greece. That's alarming, but Greece is still far away. Cities in America that look like yours....

Voters by November are going to be alot more open to the message that government is not too big to fail than I think Democrats wish. Every time voters read one of these stories, the President's path to reelection get's steeper.

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