US Cities at Risk of Bankruptcy
Interest-Rates / US Debt Dec 30, 2010 - 05:33 AM GMTBy: Submissions
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.
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.
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