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Old 07-11-2012, 11:44 PM   #21
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Originally Posted by Htown Harry View Post
Sometimes we can be a gloomy bunch here on ER.org. With respect, I offer a few statistics that contradict the opinion that there is an increasing frequency or severity of state and local government fiscal disasters.

There are 50 states, 3033 counties and 18443 municipalities in the U.S.

Of those 21,500 +/-, only 13 filed for Chapter 9 bankrupcy in 2011. (0.06%) The number so far is 2012 is also about one per month.
County (United States) - Wikipedia, the free encyclopedia
Google Answers: Number of Cities, Towns and Villages in the United States
Chapter 9, Title 11, United States Code - Wikipedia, the free encyclopedia


Between 1990 and 2010, the number of Chapter 9 municipal bankrupcies ranged from 3 to 18 per year. On average, the early 1990's had more municipal bankrupcy filings that more than in recent years.
http://www.abiworld.org/statcharts/C...80-Current.pdf

Depending on how it is counted, between $2 billion and $25 billion of $3.7 trillion of municipal debt (between 0.01 and 0.1%) defaulted in 2011. Many of these were specialty issues, like housing bonds.
Whitney


My point is not to minimize the very real distress of those state and municipal governments that do make the news from coast to coast. "Many" are indeed in a mess. Perhaps even the majority of local governments in the U.S. have some component of their balance sheet that could be characterized as "kicking the can down the road".

In any statistical population, however, the whole is only partially defined by the extremes. Plenty of state and local governments are making decisions to balance budgets, reduce spending or even to (gasp!) raise taxes to balance budgets, pay pensions and cover their debt service.

By comparison, 88 of 5091 publicly traded corporations filed for bankrupcy in 2011 (1.7%)
Continuing Decline In Number Of US Publicly Traded Companies - Misunderstood Finance
Corporate bankruptcies fall in 2011 - Los Angeles Times



I think the issue is how many are close to being there Also, as of now Scranton has not filed. I have read about other cities who have cut their services back by 50% or more to prevent BK.
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Old 07-12-2012, 10:05 AM   #22
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I think politicians were hoping they could kick the can long enough to get them to retirement, and the electorate was hoping we could kick the can long enough so it wouldn't hit the fan until they were dead.

Can't kick the can any more, folks. Time for some medicine which won't taste pleasant to anyone.
I would have said we couldn't kick the can anymore a few years ago too, yet here we are, still kicking. The medicine just gets worse while we wait...so far we haven't tasted it at all.
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Old 07-12-2012, 03:10 PM   #23
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It seems like that mayor's choices were 1) what he did, 2) bankruptcy or 3)write checks that he knew would bounce. I applaud his courage in highlighting the issue. At the same time, I could see a problem in that any skilled employees will leave asap and move on to better things and the laggards that have little other choice will linger on.
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Old 07-17-2012, 03:58 PM   #24
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It seems like this situation is the reason we have bankruptcy.

It looks to me like they should have entered bankruptcy long ago, but just ignored the problem until the money ran out, and then pulled this pointless stunt.


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Originally Posted by pb4uski View Post
It seems like that mayor's choices were 1) what he did, 2) bankruptcy or 3)write checks that he knew would bounce. I applaud his courage in highlighting the issue. At the same time, I could see a problem in that any skilled employees will leave asap and move on to better things and the laggards that have little other choice will linger on.
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