100 US cities facing debt disaster

[str8thinker]

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.

"There's not a doubt on my mind that you will see a spate of municipal bond defaults. You can see fifty to a hundred sizeable defaults – more. This will amount to hundreds of billions of dollars' worth of defaults."

New Jersey governor Chris Christie summarised the problem succinctly: "We spent too much on everything. We spent money we didn't have. We borrowed money just crazily. The credit card's maxed out, and it's over. We now have to get to the business of climbing out of the hole. We've been digging it for a decade or more. We've got to climb now, and a climb is harder."

American cities and states have debts in total of as much as $2tn. In Europe, local and regional government borrowing is expected to reach a historical peak of nearly €1.3tn (£1.1tn) this year.

Read full article here:
http://www.guardian.co.uk/business/2010/dec/20/debt-crisis-threatens-us-cities

Also reported locally here:
http://www.theage.com.au/world/us-cities-facing-debt-disaster-20101221-194e6.html

Of course, The Guardian may have its own agenda behind reporting these issues:
http://projectavalon.net/forum4/showthread.php?9004-Guardian-Trying-to-Use-Ridicule-to-Quash-Many-Theories

[irishspirit]

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.

"There's not a doubt on my mind that you will see a spate of municipal bond defaults. You can see fifty to a hundred sizeable defaults – more. This will amount to hundreds of billions of dollars' worth of defaults."

http://www.lewrockwell.com/spl2/municipal-meltdown-ahead.html

[Snowbird]

These are just 20 of the most miserable cities in the U.S. I wonder how many are runners-up?


Forbes slide show: In Pictures: America's 20 Most Miserable Cities

http://www.forbes.com/2010/02/11/americas-most-miserable-cities-business-beltway-miserable-cities_slide.html

[Ross]

Not good news....

I have to say, that in NZ and OZ over the last 10-12 years, the average Individual has been spending $1.14 for every $1.00 earnt...Sure, we can blame the banks for loaning funds to just about anybody but the responsibility must fall on the borrowers as much as the banks. I know this is the case in most western countries

The attitude of 'buy now' pay back later, (borrowed credit) is a leading cause, coupled that with the past growth in the housing sectors pre 2007, leading peoples to believe they were wealthier than they really were, leading to more borrowing of which the banks took full advantage of.

E,g...Purchased a house in 2002 @ $300,000 with a mortgage of say $150,000-200,000. Now, jump to 2005-6, the property is now valued (market value) at $450,000-$500,000, an increase of $150,000-$200,000...combine that with the false belief that property will continue to grow, you get suckered in by the banks to borrow more...investment housing, extensions/renos to the property, the new car, the big holiday...I have seen this happen to many folk...

Sure the banks are crooks but we must take some responsibility for our own lack of 'careful spending'

Ross

[Anchor]

Sure the banks are crooks but we must take some responsibility for our own lack of 'careful spending'Ross

Only some?

I'd say you have to take complete responsibility. You make the choices, no-one else does.

[Ross]

Only some?

I'd say you have to take complete responsibility. You make the choices, no-one else does.

Hi John,

Guess i'm having a kind of bleat as most ppls blame the banks entirely and not themselves...

Merry xmas John, enjoy the farm and hope its not to wet for you...

[Rocky_Shorz]

I was laughing listening to a few kids in line shopping, they were talking about their parents loading up the cards and buying presents because after 2012 they won't have to pay them back...

[Ross]

I was laughing listening to a few kids in line shopping, they were talking about their parents loading up the cards and buying presents because after 2012 they won't have to pay them back...

what can ya say...stupid!