Wall Street Journal Article click on title above or cut and paste this into your browser . . . http://finance.yahoo.com/taxes/article/108866/muni-threat-cities-weigh-chapter-9?sec=topStories&pos=4&asset=&ccode=
Discusses how cities and other municipalities are being forced into bankruptcies.
Let's look at how we got here and where we are going:
step 1 Most people live above their means relying on credit
step 2 Most companies respond to demand and borrow to grow
step 3 Most municipalities, states and even federal govt decide to do the same
step 4 People can't pay their bills. Defaults and bankruptcies increase
step 5 Companies can't pay their bills. Defaults and bankruptcies increase
step 6 Municipalities and other governmental bodies can't pay their bills . . .
what do you think happens next?
According to this article Chapter 9 bankruptcy filings increase.
If municipalities can't pay their bills, will they go to their states for help?
Oh wait, what if the states can't even pay their own bills?
Well then you just go to the Federal Govt right?
Uh oh, what happens when the Federal Govt can't pay it's bills?
Well I guess, the rest of the world will gladly extend even more credit to us, I mean, after all we are The United States of America. Have you seen what is happening to the willingness of the rest of the world to lend money (extend credit) to financially irresponsible nations like Greece, Italy, Spain, Argentina, Latvia, Lithuania, Ireland, Portugal, Iceland and yes financially irresponsible countries like The United States of America? Hmmm
I wonder if my friend Kirk Nace is right. For several years he has been sharing with those close to him that we will live to see the day when the USA follows the path of the FORMER USSR. In fact, I think he is working on a book (damn I wish he would actually finish some of his books!) entitled "I Remember When The States Were United."
If we can't borrow anymore, we won't be able to spend anymore. If we can't spend any more how many millions and millions of people are going to be thrilled when their social security, or their welfare, or their medicare, or their pensions simply stop?
How will they react?
Can you say REVOLUTION?
I think it was Thomas Jefferson who many years ago said that in order for a Democracy to succeed there should be a good revolution every 20 years or so. Are we waaay overdo?
