The next financial crisis is the collapse of cities and states
Read Time:41 Second
Several US states and cities are sitting on fiscal time bombs that could send the country careening into a domestic version of the EU debt crisis, financial experts warn. Pushed to the brink by the downturn, state and local governments are riding trillions of dollars’ worth of debt—much of it off the books—that could swamp them within a few years, the New York Times is reporting.
Drastic cuts to public services and benefits have pushed states to use accounting tricks to stay afloat, but many are running out of options. While municipal bankruptcies are rare, the risk is rising and may force the federal government to step in at some point. “I don’t like to play the scared rabbit, but I just don’t see where the end of this is,” says one expert.
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And the burden falls again on those least able to bear the it. In CA, the state cuts the rate for In-Home Support Services, for example… Jerry Brown really has his work cut out for him here, but it will get really rough all over.
With conditions like that, someone would have to be a fool to come out with newly designed products that sell to that market.
Man oh man…yep, a fool!
Yes,the Stimulus provided some help to states and municipalities but the Act itself was severely underfunded.
It’s the people who need help the most gonna suffer, that’s always where the cuts come from. Public services, police and fire protection, education. It’s critical that partisan politics doesn’t enter into the matter but that won’t be the case. Both parties will posture and dither to make good public relations and poor/working people will lose out.
You are absolutely right Oso.