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BamaMan

Largest Municiple Bankruptcy Ever

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The County Commissoner and former Mayor of Birmingham was sent to jail for taking bribes from investment bankers to enter into interest rate swaps aka dirivatives in 2009.

 

Essentialy, we had swaps on debt that did not exist so our interest expense was far greater than the interest owed to bondholders and Chapter 9 has been filed this week. Google for more info but in short the debt is tied only to the water works. I am on septic tank so I will not get hit with the big increase in sewer fees.

 

Here is the scary part......ITS LIKE NOTHING HAS HAPPENED. No one seems to care or at least not yet.

 

Many counties are on the verge, most notable is Cook Co. Illinois/Chicago has more debt than any county.

 

Could this be a breakdown that leads to slow chaos?

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I think since corruption seems to be the standard operating procedure for municipal governments (and on up the line), the citizens have become accustomed to their elected officials raiding the coffers and worse. I caught the interview last Sunday on "60 Minutes" with Jack Abramoff and he essentially laid out how lobbyists corrupt our Congress and write the laws without our Congressmen even reading the bills they are sponsoring.

 

Here in Houston (Harris County), I think one of our county commissioners recently resigned as part of his guilty plea in a corruption case and most folks failed to even notice. Sad days for the Republic, and seems to be getting worse. I know a lot of counties are in bad shape financially even without the stealing, and the tax revenues are steadily falling as more and more businesses close their doors. I travel a lot for work and I see this pattern repeated around the country, but at least here we have the energy sector to bolster the local economy. I was in Flint, MI a few months back and that place looks like they already experienced the Zombie Apocalypse with all the boarded up windows and and abandoned buildings.

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I think since corruption seems to be the standard operating procedure for municipal governments (and on up the line), the citizens have become accustomed to their elected officials raiding the coffers and worse. I caught the interview last Sunday on "60 Minutes" with Jack Abramoff and he essentially laid out how lobbyists corrupt our Congress and write the laws without our Congressmen even reading the bills they are sponsoring.

 

Here in Houston (Harris County), I think one of our county commissioners recently resigned as part of his guilty plea in a corruption case and most folks failed to even notice. Sad days for the Republic, and seems to be getting worse. I know a lot of counties are in bad shape financially even without the stealing, and the tax revenues are steadily falling as more and more businesses close their doors. I travel a lot for work and I see this pattern repeated around the country, but at least here we have the energy sector to bolster the local economy. I was in Flint, MI a few months back and that place looks like they already experienced the Zombie Apocalypse with all the boarded up windows and and abandoned buildings.

 

All it will take is one mega county bankruptcy where the officials do not work with the State level government correctly for interim help and you will have a freeze in pay for police, fireman, teachers, etc... What is next from there? National guard during the interim? Also should be noted....Filing complete bankruptcy (7 or 11) or a restructure (chapter 9) does not give you a "do over". Creditors will ask the courts to garnish tax revenues to pay back what can be reasonable and that cuts into services again.

 

To met this is a very real scenerio of how certain areas will be impacted worse than others. Look out for Chicago b/c they have truly over spent through pensions and social programs.

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