Saturday, May 31, 2014

Expect a Tsunami of Municipal Bankruptcies

by Michael Kling
Money News

More cities will go bankrupt like Detroit, predicts a government expert.
Rising pension-fund and health-care costs are putting enormous pressure on state and local governments, Richard Ravitch, who is advising Detroit’s bankruptcy judge, tells CNBC. Plus, the federal government, attempting balance its own budget, has cut its funding to cities.
Politicians prefer not to raise taxes or cut services, so have repeatedly issued bonds to borrow, kicking the tough decisions down the road.
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