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Author Topic: Stockton, CA to Become Largest Bankrupt City in US  (Read 3427 times)

Ben

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Stockton, CA to Become Largest Bankrupt City in US
« on: June 27, 2012, 10:10:03 AM »
Stockton is about to declare bankruptcy.

Reading the story, I see the common theme of blaming the majority of their problems on "the burst housing bubble". Yet, what expenses do cities actually have when there is a big increase in housing?

Certainly they may have needed to build some new schools, which now may have less students if families move out. They may have justifiably added some police and fire employees. But what likely happened is they went nutzo with all the new property tax revenue and expanded their local government, with the fantasy thought that property tax revenue would only go up, and never down. Now they lost all that revenue and they decided they need to declare bankruptcy.

http://www.foxnews.com/politics/2012/06/26/stockton-set-to-become-largest-us-city-to-declare-bankruptcy/#ixzz1yyC0NF97
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RevDisk

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Re: Stockton, CA to Become Largest Bankrupt City in US
« Reply #1 on: June 27, 2012, 02:15:09 PM »

BWAHAHAH
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brimic

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Re: Stockton, CA to Become Largest Bankrupt City in US
« Reply #2 on: June 27, 2012, 02:42:15 PM »
Wait what!?!
They weren't able to spend themselves out of debt?
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HankB

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Re: Stockton, CA to Become Largest Bankrupt City in US
« Reply #3 on: June 27, 2012, 03:17:12 PM »
Quote from: brimic on June 27, 2012, 02:42:15 PM
Wait what!?!
They weren't able to spend themselves out of debt?
Impossible! More spending is the solution! Call Paul Krugman!
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TechMan

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Re: Stockton, CA to Become Largest Bankrupt City in US
« Reply #4 on: June 27, 2012, 03:31:15 PM »
According to Reuters, Stockton has $700 million in outstanding debt.

ETA: According to the same article Jefferson County, Alabama set the record last year for the largest municipal bankruptcy filing at $4.23 billion.  I don't recall hearing anything about that bankruptcy.
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Ben

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Re: Stockton, CA to Become Largest Bankrupt City in US
« Reply #5 on: June 27, 2012, 04:17:55 PM »
Holy crap. How does a single county in Alabama rack up $4bil in debt? And indeed, it didn't seem to make the news.
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Nick1911

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Re: Stockton, CA to Become Largest Bankrupt City in US
« Reply #6 on: June 27, 2012, 04:31:34 PM »
So, what happens now?

Do the creditors get to seize city property?  Does the state bail them out?
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HankB

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Re: Stockton, CA to Become Largest Bankrupt City in US
« Reply #7 on: June 27, 2012, 04:48:46 PM »
Quote from: Nick1911 on June 27, 2012, 04:31:34 PM
So, what happens now?

Do the creditors get to seize city property?  Does the state bail them out?
The city officials responsible go to debtor's prison until they've worked off the debt.



(OK, that's only wishful thinking.)
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brimic

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Re: Stockton, CA to Become Largest Bankrupt City in US
« Reply #8 on: June 27, 2012, 04:53:57 PM »
Quote
The city officials responsible go to debtor's prison until they've worked off the debt.



The Milwaukee Wisconsin politicians who run up debts usually move to chicago after they resign, which is almost as good.
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Waitone

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Re: Stockton, CA to Become Largest Bankrupt City in US
« Reply #9 on: June 27, 2012, 05:11:23 PM »
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Scout26

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Re: Stockton, CA to Become Largest Bankrupt City in US
« Reply #10 on: June 27, 2012, 06:38:40 PM »
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Creditors such as JPMorgan Chase [JPM  36.78    1.07  (+3%)   ] had argued that Jefferson County was ineligible for a bankruptcy filing because the county had no bond debt as required by state law. Like most Alabama counties, Jefferson County only had warrants, a form of debt popular in the state since the 1930s that does not require direct voter approval.

How does that happen?  Voters don't have to approve the .gov entity taking on debt?

I hope everyone involved gets screwed.
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Hutch

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Re: Stockton, CA to Become Largest Bankrupt City in US
« Reply #11 on: June 27, 2012, 06:39:51 PM »
There's a county commissioner doing a stretch right now.  
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Re: Stockton, CA to Become Largest Bankrupt City in US
« Reply #12 on: June 27, 2012, 11:47:47 PM »
Some jackwagon from California was on the O'Reilly Factor tonight (hosted by Juan Williams) saying that austerity would be a horrible choice, they need to spend more $$, they can't let these important social investments go south.
 [barf]

Even the liberal Juan Williams was .....not ....really .... buying .... it.
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