$2tn debt crisis threatens to bring down 100 US cities
Overdrawn American cities could face financial collapse in 2011, defaulting on hundreds of billions of dollars of borrowings and derailing the US economic recovery. Nor are European cities safe – Florence, Barcelona, Madrid, Venice: all are in trouble
More than 100 American cities could go bust next year as the debt crisis that has taken down banks and countries threatens next to spark a municipal meltdown, a leading analyst has warned.
Meredith Whitney, the US research analyst who correctly predicted the global credit crunch, described local and state debt as the biggest problem facing the US economy, and one that could derail its recovery.
“Next to housing this is the single most important issue in the US and certainly the biggest threat to the US economy,” Whitney told the CBS 60 Minutes programme on Sunday night.
And now… the rest of the story. …..
Harold
Greatly adding to the economic collapse of local governments and expected defaults on Municipal Bonds, many Municipal Employees are paid twice that of Americans working similar positions in the private sector. Local and State Government employees hold taxpayers hostage to paying humongous retirement plans approved during an artificial boom economy. In part due to union influence, state and local governments are moving the direction that collapsed the USSR—huge unaffordable bureaucracies; imploding numbers of government employees.
Despite a relentless horrific recession, Federal, State and Local Government Employees continue to receive (unsustainable salaries, benefits; and large pensions) that will bleed Taxpayers dry for decades. Some Unions appear intended to dump on U.S. Taxpayers their obligation to pay its members inflated promised benefits. Meanwhile unions think nothing of spending millions on political campaigns. Taxpayers should demand deep independent audits of certain unions. Both unionized and non-union state/local Government employee salaries and benefits need to be sharply reduced, brought in line with private sector workers. State Legislatures should be introducing legislation to cut back or terminate unsustainable pension and salary plans that hold taxpayers hostage; as Local Governments financially collapse this should be a major issue.