Bankrupt City

I have bored everyone who will listen by talking about the grim state of public pensions. Here is a good synopsis. This does not bode well for public employees. If cities or counties raise taxes sufficiently to cover their pension obligations, they risk losing their tax base. People and businesses will move away and property values will drop. If they default by chapter 9 bankruptcy, then their future ability to borrow and hire willl be threatened. Services will have to be cut and people and businesses may move away. It’s a pretty bleak story whatever the outcome. In any event, retired public employees will get the short end of the stick.

But where would all these people move to? If there are some areas of the USA without looming pension problems, they may be in for boom times. Prudent behavior always pays in the long run.

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