$2tn debt crisis threatens to bring down 100 US cities

$2tn debt crisis threatens to bring down 100 US cities

www.guardian.co.uk

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.

(visit the link for the full news article)

Interesting issues coming out of this article:

"It's all part of the same parcel: public sector indebtedness needs to be cut, it needs a lot of austerity, and it hit the central governments first, and now is hitting local bodies," said Philip Brown, managing director at Citigroup in London.

This quote should scare the holy Hell out of every American, namely because it is wrapped inside of a massive lie. The federal government has NOT cut jack squat. If we've got municipalities and states teetering on the brink of total failure following 3+ years of deep, dramatic cuts with no relief on the horizon, what the hell does that say about a US federal government that has increased their spending 10 fold over the same period? Austerity has come to municipalities and states, but it has yet to be seen on the federal level. The recovery is a lie and the future becomes bleaker.

With a population of about 120,000, Vallejo has $195m (£125m) of unfunded pension obligations and has to present a bankruptcy-exit plan to a Sacramento court by 18 January

That is only the pensions! These aren't even debts the likes of which are involved in bankruptcies. It's like declaring bankruptcy on your future utility bills or grocery bills! Does anyone see them magically emerging from this? They are but the first in what will likely be a very long line of US cities which are insolvent.

Very dark days ahead. This is a death spiral. Communities require taxes & fees from citizens to balance their budgets and make their communities attractive to prospective residents. These cuts make the communities far less attractive, and those with the abillity move, further deteriorating the money base. This is a death spiral in the purest of forms.

www.guardian.co.uk
(visit the link for the full news article)

The money troubles go a whole lot deeper than that www.abovetopsecret.com...

Next year?.......

...

Ugh, We've been saying the economy is going to tank for a few years now. I wish it would just happen already. Next year? And we'll be saying the same thing at the end of 2011. Then again at the end of 2012... Doesn't anyone see it? They're using fear against us. The whole what if factor. It keeps people scared, and thats what they want. They can control us, while they write up more stimulus and bailouts for their own pockets...Using the economy against us, just like they use terrorism against us.

Originally posted by CanadianDream420
Next year?.......

...

In regards to failures starting? If so, I think we've been somewhat duped this year. Personally, I don't believe that failures begin with riots in the streets and admission of insolvency. Truth be known, neither does the economic machine. Notice how historically, the beginning of any recession is always identified by the government as having occurred many months before any admission of a recession takes place. I would presume that full-on collapse and failure would be the same. In "civilian" terms, Vallejo failed/collapsed/crapped the bed when they filed bankruptcy. In realistic terms, they failed when they started spending more than they were taking in while staring at the liklihood of missing debt payments. In governmental terms, they haven't failed. See the disparity and silliness here?

By pretty much anyone outside the government's mind, US cities, states, and even the nation have begun to fail or are well into the process of active failure. When the hole is so deep that you cannot see even a pinpoint of light, no reversal in the debt spiral can be predicted, and credit downgrades are taking place, it is obvious that a cataclysmic event (bankruptcy, full downgrade of living standards, or win the lottery) must occur to salvage some balance of life. Seeing as how the lottery isn't going to happen, only bankruptcy or declines in the standards of living are on the table. Unions have combined with special interest groups to ensure that a majority of potential areas for cuts are off the table, so we see the most dramatic of hack jobs taking place to our standards of living. You cannot cut salaries of union workers and the special interest groups howl like turpentined cats if you touch environmental, retirement, recreational, or community entitlements... thus, trash doesn't get picked up, police & fire departments experience layoffs, streets don't get maintained, bus services get gutted, and public buildings & land get auctioned off. We've seen all of that run rampant in 2010. I think that's a good indication that the failures have begun and yes, there is worse around the corner... it could continue to hold form through next year or get far worse... but I don't see it getting better.

The recovery is a phantom. You cannot have a recovery while continuing to escalate debt and downgrade funds.

reply to post by burdman30ott6


Wow! According to this article we haven't see anything yet!
Oh boy........it's like the bottomless pit.

Next up:

Federal Reserve banks owning cities.

It is a tough one to say just how it will all pan out. The media have been scaring us with lies for so long that we have fallen under their spell. Society does not have to collapse because the people who have been lying to says it will and we give them more of our power. All we need to do is just target the key specific problem points and suddenly a lot of money will be freed up from previous corrupt practices, at least enough for things to settle back down and we can get on with our lives.

I do not know where the specific problems are, but I know they are there. Yes we can!

Originally posted by thewholepicture
Next up:

Federal Reserve banks owning cities.

Something like this is going to happen, including with the states.

There will be a federal bailout and a loss of sovereignty. If some state governments totally collapse, which is likely in California, federal administration will follow. It will almost be like states turning back into federal territories/commonwealths or the establishment of more Columbia style districts.

My personal favorite name for this is the United Districts of Columbia.

it's all bs.

apparently the government has enough money to give israel 3 billion over 10 years, that's 30 billion dollars but it doesn't have enough money to pass a legislation to give heroic firefighters and policemen who stormed the twin towers in search of survivors, healthcare.

the republicans fought like mad dogs to not give these people a lousy 5 billion for proper healthcare and compensation, many who can't work and have chronic symptoms.

everytime i see these worthless human beings disgrace the memory of the people who died and gave their lives to save others bow their heads and put their hands over their hearts every 9/11 anniversary memorial it makes me want to vomit.

that's the kind of garbage that leads you, that's the kind of filth that tells you to go out and vote. this hypocrisy is nauseating.

of course cnn and the rest of the propaganda machine doesn't report it. then people wonder why everyone hates america. if it's willing to do this to it's own heroes, what do you think they do to others around the globe.

selflessness, generousity and gratitude is foreign to those filthy, garbage rats. all they know is violence, hate and greed.

reply to post by burdman30ott6


USSR.

Worse case scenario ---> Ottoman Empire.

Originally posted by oozyism
reply to post by burdman30ott6

 

USSR.

Worse case scenario ---> Ottoman Empire.

We will cut education and healthcare before any severe cuts to the defense budget. The CFR is expecting and projecting the US to do just that.

We will withdraw from some places overseas though. The UK, Germany, and Italy for sure. Japan and South Korea possibly.

Best case scenario: The BIS, the FSB, and G-20 take emergency actions as the US dollar collapses. The Federal Reserve denominates all assets as SDRs, US reserves are then valued in SDRs, and the SDR becomes the fiat global reserve currency. The transition begins to a world government dominated by the US, EU, Japan, and China.

Worse Case scenario: The US collapses, dragging down the other central banks and the BIS. The entire global economy collapses. China and OPEC implodes into chaos. Extremism and demogogues rise across the globe. Israel nukes half the Middle East. Pakistan and India nuke each other. The EU collapses into civil war. Russia invades Eastern Europe. The global elite retreat into bunkers after deciding it would be better to just start from scratch and commence Operation Phoenix, and end it all in a global nuclear holocaust. The end.

reply to post by MikeboydUS


Just one question.

Wouldn't cuts in other parts of US budget only hold back the collapse a little longer, but worse, devastate the education system, and cause a massive US brain drain? Which is already happening right now.

Is the longer future more important than the shorter future?

For example is it better for Americans to be well educated and highly informed, rather than uneducated and ignorant regarding the world?

I'm just trying to figure out why US is choosing to cut from education, and other important budgets, rather than defence which is more than the whole world combined.

Originally posted by oozyism
reply to post by MikeboydUS

 

Just one question.

Wouldn't cuts in other parts of US budget only hold back the collapse a little longer, but worse, devastate the education system, and cause a massive US brain drain? Which is already happening right now.

Is the longer future more important than the shorter future?

For example is it better for Americans to be well educated and highly informed, rather than uneducated and ignorant regarding the world?

I'm just trying to figure out why US is choosing to cut from education, and other important budgets, rather than defence which is more than the whole world combined.

The Brain drain can't get much worse. We are already at Third World levels.

The CFR thinks apparently it would be best for us to be dumb and unhealthy, but have a large military. I personally don't agree with that, but I'm not in charge. In my opinion, It would be best if the NFL/NBA was regulated and colleges in the US didn't revolve around sports, where coaches make 3x the amount of professors. The entire system needs to be overhauled. Degrees need to be streamlined, specialized and focused. Less athletes and lawyers, more engineers and scientists.

The Military Industrial Energy complex and their financial friends at JP Morgan Chase is part of the why their cuts will be last. I'm sure the CFR has a role too, since they are projecting it to happen.

reply to post by MikeboydUS


You have been making some fantastic points MikeboydUS and have a good understanding of what is going on, we all work together or we all fall down. A global merging of international currency is the best option, considering that a global army is coming together under START treaty it makes the most sense. As for the technical details it is out of my field. It is going to take peer review from economist all over the globe to work through it, the UN has developed better systems for this over the years and would expect some drafts already in the system. Maybe send it out for peer review amongst all the relevant university students as well, there is a great resource there for ideas and it gives them a heads up for what is coming.

The CFR thinks apparently it would be best for us to be dumb and unhealthy

I agree, their reputation is pretty poor when it comes to assessing all the issues along with IMF. They have being leading the field for a while so their opinion is at least worth listing to, but any final decisions should be out of their hands. START will squash them if they want to play games as their cover has been blown.

I agree education is also vitally important to help address the challenges in a more cohesive and capable response. Garbage In, Garbage Out.

reply to post by oozyism


It is called the military industrial complex. The military men(corporations) run the show. Huge money owned and operated the FED. There will be only a few projects cut that the media will latch on to, and to make it look like we are sacrificing security. The business will dry up when the is no more use for the military, which we all know that will never happen.
I like the thread and discussions, but I believe that the FED will not give up power. There will be chaos in the streets of america, because the FED will do another inside job 1,000 times worse than 911 and make us need the money for instant war against the false perpetrator. Therefore the FED will be "good" again.

Originally posted by TETRA.X
reply to post by burdman30ott6

 

Wow! According to this article we haven't see anything yet!
Oh boy........it's like the bottomless pit.

We haven't seen anything yet. Federal spending from borrowing is the only thing that has kept the real collapse from happening. Massive levels of debt must be cleared before the economy can recover, and basically none has been cleared. That debt must clear and that will be horrible but it has to happen. What has happened so far is nothing compared to what is coming. The feds ability to continue to spend is very nearly over, and when that is gone, the economy will tank fast and hard.

Quite frankly this state budget problem although large, really could be minor compared to the likely destruction of the dollar if the fed continues its outrageous policies.

S&F!

This is truly scary,indeed. No one,no matter where you live, is going to be immune from the events which are unfolding. At least knowing what's going on will make it all less of a shock when the train finally leaves the rails.

You know that old saying,'Eat,drink and be merry for tomorrow you may die'? Yeah, time to get on with it... And don't forget to stop and make some quality time for the people you care about. Let them know you love them before it's too late.

Are these the same city gov'ts that manhandled our industries out of existence, our families out of their homes, gave us speeding tickets while we still had cars and arrested us for being homeless on the streets after they dumbed-down our kids and kicked them out of the schools that were then closed down?

Good riddance.

The fading away of the unloved and unwanted State.