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.”
US states have spent nearly half a trillion dollars more than they have collected in taxes, and face a $1tn hole in their pension funds, said the CBS programme, apocalyptically titled The Day of Reckoning.
Last night’s “60 Minutes” report on the budget crises and shortfalls many state and local governments face could have been written by anti-worker, anti-union New Jersey Gov. Chris Christie (R), who used his airtime to slam public employees and their unions as the root cause for the huge budget gaps. Yet 60 Minutes did not give one second of airtime to a public employee or union spokesperson.
Never mind the fact that unions have dumped billions of dollars (over $561 million in 2010 alone) into putting politicians into office who have rewarded them with rich contracts that taxpayers are saddled with paying.
Unfortunately, union bosses don’t seem to realize that it is not their money. It never was. They bought politicians who made promises with taxpayer money. Those promises cannot be kept. The well has run dry. The money is gone.
Blame the bankers, the bakers, the politicians, or the candlestick makers. It doesn’t matter. The money is gone. You cannot consume more than you produce—and America has done just that. It is time for a diet of vast proportions. The PC term of the day seems to be austerity. America’s public sector needs austerity…and a lot of it, quickly.
You see, union bosses, if America goes bankrupt, workers’ pensions are the last thing that anyone will be concerned about. The jig is up, the scam realized. You gamed the system for so long undetected, but now your system is crashing—and you still want to blame others.
You know, some used to say the Left is ‘not evil, just wrong.’ Considering the depth to which today’s union bosses will stoop to cover their own complicity, perhaps it’s time to re-think that equation.
“I bring reason to your ears, and, in language as plain as ABC, hold up truth to your eyes.” Thomas Paine, December 23, 1776
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