Coming to a Municipality Near You: Bankruptcy

After earning the dubious distinction of passing the country’s most draconian anti-undocumented worker law (that I wrote about today), Alabama added another feather to its dunce cap this week. Its most populous county, Jefferson, filed the largest municipal bankruptcy in the history of the United States.

Jefferson County’s troubles began in the 1990s when a federal court forced it to upgrade its sewer system to meet the EPA’s clean-water standards. But the project got bogged in cost overruns from the get go, thanks to massive corruption. "Officials used bonds to finance the improvements," explains the USA Today. "Outside advisers suggested a series of complex deals with variable-rate interest that were later shown to be laced with bribes and influence-peddling"

The project’s financing costs, among other things, put the county in a $4.1 billion hole. In an attempt to stave off bankruptcy, Jefferson persuaded JPMorgan Chase and its other creditors to write off about $1 billion in debt and refinance another $2 billion. On its end, it agreed to hike taxes and sewage fees and undertake other budgetary changes to pay the rest of it. But it couldn’t get approval from the state legislature for the plan, making bankruptcy unavoidable.

Does all this mean that Jefferson’s problems are unique and everyone else can sleep easy? Not really.

The reality is that Uncle Sam might be drowning in deficits and debt but corruption is a far bigger problem at the local level. If you live near Detroit (as I do) and have observed the antics of Mayor Kwame Kilpatrick (who recently came out of jail after serving time for perjury, obstruction of justice etc., only to find himself the subject of an FBI probe for a kickback deal) and the Detroit City Council (one of whose former members, Monica Conyers, is in prison for accepting bribes), you know that the notion that government is more accountable when it is closest to the people is something of a fairytale.

This corruption might have been affordable when a flush economy was pumping tax revenues into local coffers. But that is not the case anymore. What’s more, states and municipalities across the country have promised $3.5 trillion—about a quarter of the national GDP—in pension and other benefits to their employees that they don't have funds  to pay.

The upshot is that many local governments are on the brink and could collapse anytime. My Reason Foundation colleague Harris Kenny last month put together a helpful list of the nine most vulnerable municipalities when Harrisburg, Pennsylvania, filed for bankruptcy. Jefferson was number three. Two others—Pontiac and Detroit— are in Michigan, my fair state. Pontiac, incidentally, became something of a national joke recently when it sold the Pontiac Silverdome, former home of the Detroit Lions, for the grand price of $583,000 after having spent $55.7 million to build it 35 years ago. About Detroit, ‘nuff said already.

For Kenny’s whole list, go here.

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  • ||

    Another restaurant claimed to use fresh mozz arella cheese, when it's dishes were actually made with economy cheddar. The "fresh pasta" advertished on another menu tumed out to be frozen.My boyfriend thinks the same with me. He is eight years older than me. We meet online at ----Agédαté.℃⊙M--.- .. a nice and free place for younger women and older men, or older women and younger men, to interact with each other. Maybe you wanna check out or tell your friends.

  • ||

    My boyfriend thinks the same with me.
    Does your boyfriend thinks you are economy cheddar or does he think you are frozen pasta? I am so confused, I don't get the whole sex and food thing. Maybe Tulpy Poo can help me out.

  • ||

    At least her boyfriend doesn't subject her to "Craptain America" when she wants a little slap 'n tickle.

  • ||

    I have still not forgiven him for that. I would have rather been subjected to a man with a food fetish than that movie.

  • ||

    I think sloopy was referring to the old Cleveland Steamer.

  • ||

    I can neither confirm nor deny that statement.

  • ||

    I don't care how much you provoke me, I'm not telling you about my barbecue sauce move.

  • ||

    You wrote down crib notes?!!!

  • George||

    I think it was a knuckle.

  • Anonymous Confessions ||

    My wife usually takes muscle relaxers before bed time, and she sleeps like a log. she was once sprawled in the center of the bed. Something I've complained about before because it forces me to sleep on the couch since she is unmovable. I got this stupid idea. I mixed up some chocolate pudding and inserted two tablespoons into her butt hole. She woke up a few hours later loudly velching that she shat herself. I had to stuff a pillow in my mouth so she couldn't hear me laugh.

  • Emperior Wears No Clothes||

    Although that sounds apocryphal, if it's a true story I predict the last night of your life will involve your wife patiently explaining her alibi to homicide investigators.

  • ||

    What the fuck is "economy cheddar?". And who, other than a Canadian, would substitute it for mozzarella?

    And if your boyfriend thinks you're frozen instead of fresh, why are you still with him?

    Other than that, I find your website intriguing and wish to subscribe to your platinum membership plan.

  • rsi||

    So nobody has any intelligent responses to this?

    You're going WI on us.

    Maybe need a Marc by Marc Jacobs Handbag.

  • ||

    Maybe need a Marc by Marc Jacobs Handbag.

    I heard it has also been sought after by many big Hollywood stars

  • wareagle||

    when you live in the clusterfuck that is Detroit the even larger cluster that is Michigan, referring to other states as having dunce caps sound a bit like projection. No, AL is not perfect but it is obviously not MI, either.

  • Colonel_Angus||

    Community college is high school with ash trays.

    Alabama is Michigan with hoedowns.

  • Chupacabra||

    Don't forget the [TRACTR PULLZ]!

  • Federal Dog||

    "After earning the dubious distinction of passing the country’s most draconian anti-undocumented worker law (that I wrote about today), Alabama added another feather to its dunce cap this week. Its most populous county, Jefferson, filed the largest municipal bankruptcy in the history of the United States."

    Hmmm. On one hand, they are being overrun with illegals and are trying to check damage done by that. On the other, they have been forced to declare bankruptcy for lack of funds to cover expenses they are forced to assume.

    And Shikha Dalmia, of course, declares them "dunces."

    And she really does not see it at all.

  • Invisible Finger||

    Purposely jacking up the price of labor isn't going to make paying other bills easier.

    Or perhaps you live in an alternate universe where illegals don't pay any taxes whatsoever.

  • JohnD||

    Shikha Dalmia is a POS weasel. Alabama passeed it's "draconian" law because it is overrun with illegals. If the Federal Government did it's job, these state laws wouldn't be needed.

    Of couse that means idiots like Shikha Dalmia would never have gotten into the country, which would probably be a good thing.

  • Emperior Wears No Clothes||

    You're assuming she's not American-born.
    Or you're assuming she's an illegal alien.
    Or maybe you're just a redneck.
    Not over that civil rights thing?

  • Elder Scrolls Enthusiast AuH20||

    from the word get go

    Ah, yes... "get go". A word that dates back to Shakespeare. Such a simple, single word.

  • ||

    It's "from the get go," not "from the word get go."

    You're down to two hours left of actually having a social life, Goldwater. Have you been whacking it all day in anticipation?

  • ||

    Is that the day that commemorates the first time somebody spilled cheese sauce into a bowl of pasta shells and your national dish was born?

    By the way, I'm gonna shock the world and kick your fucking ass in fantasy football this weekend.*

    *just kidding. I'm sure I'll lose as usual.

  • ||

    Why? Is the queen doing something special then?

  • ||

    I hear our queen will be celebrating it by eating a double cheeseburger, drinking a chocolate shake and giving a speech telling me how unhealthy I eat.

  • Apatheist||

    +1 gorilla armed fat ass hypocrit

  • ||

  • Apatheist||

    Damn who are those other two fine women?

  • ||

    Sarkozy's and Berlusconi's wimminz.

  • Ted S.||

    Shouldn't they remember World War II on May 8?

  • ||

    It's WWI Armistice Day, IIRC.

    And besides, they're celebrating the creation of Kraft dinner as I stated above.

  • Emperior Wears No Clothes||

    not true.
    Maybe in Presbytario, which is stuck in the 19th century.
    But that definitely doesn't hold in the 21st century side of the country.

  • Elder Scrolls Enthusiast AuH20||

    I definitely should have copy pasted.

  • Jeff Woods||

    The URL/link "For Kenny’s whole list" is a duplicate from the Pontiac Silverdome "national joke" link.

  • Jeffersonian||

    My town, St. Louis, just entered into a consent decree with the EPA to revamp its sewer system at a projected cost of $4.7 billion. My sewer bill, now sitting at about $30/mo, is projected to triple in a few years.

    I bet we'll be joining Birmingham in court before too long.

  • ||

    This is why whoever legislated the EPA into existence deserves to be skull-fucked for eternity in the darkest corner of Hell by the souls of Adolf Hitler's most twisted SS personnel. It's one of those organs of government that's got its own caliber of retarded.

  • ||

    Damn, who knew it cost so much to take a shit?

  • Skr||

    Everyone in L.A.

  • JohnD||

    The back story here is that the real cost multiplier was most of the officals (who are minorities) were crooks. 21 officals, including the ex mayor of Birmingham, have been sent to jail for bribery or corruption.
    In addition, the banks scammed the morons in the county government by charging $120 million to restructure the loan when it should have been more like $20 million according to knowledgeabe sources in the banking industry.

  • ||

    at a projected cost of $4.7 billion

    Sweet Jebus, billion with a b? What the hell are they making the sewer pipes out of, unobtainium?

  • ||

    That cost seems in line for a project in a county this size. Ripping up a lot of streets in the process, building a new treatment facility, etc, etc.

    Of course, a federal agency requiring a locality to revamp their system is the bullshit here. How the shit is this "interstate," which is the only way a federal agency would have jurisdiction.*

    *if the constitution were actually followed.

  • Apatheist||

    If it is anything like it is here they also have to pay 10 guys to have a cigarette and watch the 1 guy working.

  • ||

    Depends on whether the shit crosses state lines.

  • ||

    Unless somebody is buying that shit, it may be insterstate, but it ain't commerce.

  • Chupacabra||

    There may be lots of interstate bribery and corruption, though. That makes it commerce, right?

  • Colonel_Angus||

    As long as the city government is in the business of giving citizens a place to dump feces, its not so much of a constitutional stretch to say it should happen in such a manner that won't poison people and property.

  • ||

    apparently, defecating also affects interstate commerce.

    of course

  • Scooby||

    The shit that St. Louis dumps in the Mississippi doesn't stay on the west half of the river, nor does it all stop and pile up at the Arkansas border.

  • ||

    Oh, and it looks like Jefferson County has gotten themselves into a **snicker** shitty situation.

  • AlmightyJB||

    Too many more of those and you're going to lose your Poet Laureate status Sloop:)

  • AlmightyJB||

    "you know that the notion that government is more accountable when it is closest to the people is something of a fairytale."

    Umm, no it's not. For one thing the council woman who accepted the bribes is in jail. That sounds a little like being held accountable to me. Also, just because the sheep choose not to hold them accountable doesn't mean they can't. I at least have the opportunity to vote for my mayor, I don't have that same opportunity when it comes to your congressman though.

  • ||

    Slightly OT: I challenge any of you to name a child actor/actress worse than Tina Yothers. I'm on a Family Ties marathon and I want to kill her.

  • ||

    Damn. I forgot how fucking hot Lisa Bonet was.

    But that little girlis a veritable Meryl Streep compared to the nightmare that is Tina Yothers trying to act.

  • ||

    I will see your Candace Cameron and raise you a Kirk.

  • ||

    Haha. She called her a whore oh so subtly.

    That's Emmy-worthy stuff.

  • ||

    Whoever played the girl in Small Wonder.

    I'm not even going to ask why you're on a Family Ties marathon. Well, unless you want to talk about it.

  • ||

    It's because I want to not come in last in the Reason Hit & Run J sub D Memorial Fantasy Football League. I figure a week or so of clean living might get me there.

    And I've almost exhausted Netflix's library of decent shit and I'm a child of the 80's. It was either this or Cheers. And I tried Cheers and couldn't get past how much I hate Shelly Long and Rhea Perlman.

  • ||

    Yeah, but I always start a series with the first episode and go from there. IIRC, Cheers didn't get it's legs till at least the third year. I can't deal with sexual tension between a mongoloid (Danson) and a cunty bitch (Long) for another 30+ episodes to get there. Sorry.

    God. I wish Netflix had MASH. That was the perfect sitcom.

  • ||

    None of the iterations of Newhart, unfortunately.

    I may restart Trailer Park Boys for the third time.

  • EDG reppin' LBC||

    Blaspheme! Newhart as the shrink in Chicago is classic. The "Vermont Experiment" was merely a trifle. It should be disregarded.

  • ||

    EDG is right.

    Susanne Pleshette must have smoked 2 packs a day to get that voice.

  • Lord Humungus||

    can you go Britcom?

    Little Britain, A League of Gentlemen, Father Ted, or even older material like Good Neighbors and Allo Allo

  • ||

    I'd rather be a teeny bopper in the Nittany Lion showers than subject myself to that crap.

  • Scruffy Nerfherder||

  • Ted S.||

    She may have been better in other things, but Margaret O'Briens recitiation of the Gettysburg Address in You, John Jones is pretty frightening.

  • ||

    I don't mean to be a nonlibertarian or anything, but aren't sewer systems infrastructure par excellence? Shouldn't the stimulus have been paying for those upgrades before anything else?

    I mean, yeah, it's hard to put a "paid for by ARRA" in a place where someone's going to see it, and no Congressman wants a sewer named after him, but come on.

  • ||

    You misspelled:

    Prostitution
    Pot
    Porn shops

  • Chupacabra||

    That sounds like a typical Saturday to me.

    Oops....I've said too much.

  • Colonel_Angus||

    These things will have to be in good shape if they are ever to be economically privatized.

  • roystgnr||

    Wait, there are libertarians living in Detroit? Not to impugn the pursuit of knowledge or pure political philosophy, but isn't it sometimes nice to also improve one's own life via applications of that knowledge? "Central planning allowed to override decentralized knowledge leads to disastrous results" and "One of the benefits of localized government is that you can vote with your feet" aren't just abstract principles...

  • ||

    Some people light a candle rather than curse the darkness.

    J sub D forgive you.

  • Colonel_Angus||

    Respect.

  • Cytotoxic||

    Some people should flee the darkness and light a candle where the illumination is appreciated and can do some good.

  • ||

    Somewhere Jay Cutler is cackling evilly.

  • ||

    Three minutes and we lose some of our brethren for a while.

    Happy gaming, nerds!

  • ||

    I challenge any of you to name a child actor/actress worse than Tina Yothers.

    Danny Pintauro from Cujo and Who's the Boss infamy. I hated that kid.

    I'm on a Family Ties marathon and I want to kill her.

    Take a number. The girl single-handedly destroyed the concept of the cute, youngest child.

    Runner up: Jaleel White. The role of Urkel deserves a special place in Hell.

  • ||

    Didn't Jaleel White come out recently and say the role was just an elaborate IRL troll designed to deflate the stock price of ABC Cap Cities because a consortium his father ran had shorted it?

    And even if I'm wrong, it was still a spinoff of perfect Fucking Strangers. What did you expect?

  • ||

    God. I wish Netflix had MASH. That was the perfect sitcom.

    Only when Larry Linville was on it as the looney Maj. Burns and before Anal Alda got his grubby mitts on the show.

  • ||

    Larry Linville's Frank Burns may be the only time in history where a TV character ended up being a lot better than his movie predecessor.

    And David Ogden Steirs wasn't awful, but the show suffered greatly once Burns left.

  • ||

    Just so you all know in advance: Friday Funnies is not very funny.

    I mean Ryan Reynolds-level not funny.

  • ||

    J sub D forgive you.

    I miss him. Greatly.

  • rsi||

    +1

  • ||

    I don't care how much you provoke me, I'm not telling you about my barbecue sauce move.

    I believe it includes the "Two Snaps and a 'Round the World ridin' the Dimetapp Express!" With a peanut butter flourish on the dismount followed up with a Mesquite DRE.

    I read a case study on this recently.

  • Colonel_Angus||

    When cities start defaulting like Arkansas blackbirds, I will be so happy.

  • ||

    I sympathize with trying to find shit to watch on Netlix, sloop. I have been reduced to rewatching Star Trek Voyager.

  • ||

    "Voyager"? Jeez. You are in a desperate situation. Couldn't you at least watch "TNG"?

    I mean..."Voyager"? Why don't you just watch "Captain America" Ludivico-style? Its of the same calibre.

  • ||

    Larry Linville's Frank Burns may be the only time in history where a TV character ended up being a lot better than his movie predecessor.

    There is this little Joss Whedon joint known as "Buffy the Vampire Slayer"...

  • ||

    I said his...

    /pedant

    Yeah. I totally mind-farted on that one. Correction noted and filed for future reference.

  • the pointy end||

    Geez your editors are falling down on the job. You said "undocumented worker" when you meant"illegal alien", or more to the point, "person who broke the law coming here, is breaking the law by staying here, and can't legally work here, and is flooding the unskilled labor market and driving down wages."

  • Slant 6||

    Herp de derp. Derr....

  • MWG||

    You sleep well at night knowing daddy government decides who gets to work?

  • My pointy end...||

    Freedom's asshole.

  • ||

    I have been reduced to rewatching Star Trek Voyager.

    Speaking of sewage (Captain America) and untended (ha!) consequences, Mr. Banjos had better resume Kazooey Dooty: I don't want any more psychically transferred earthquakes in Okieland. We have enough boondoggles Detroit worthy already and the Lovely Gov. wasted no time declaring disaster areas for the sweet, sweet Fed lucre.

    Thanks George Kaiser! Asshole.

  • ||

    Didn't Jaleel White come out recently

    It's about damn time! Now if he could just get Tom Cruise out of the closet as well...

  • ||

    I wonder how the more nerdy of our reasoniods are doing now? 45 minutes into their fap-fest.

  • ||

    So...you didn't make it to level 18? You suck.

  • ||

    I too recently watched TNG. I would have gone with DS9, but I can only handle so many episodes about Worf and Odo having hemorrhoids without wanting to dig up Roddenberry's grave to punch him in what was formerly his balls.

  • ||

    Thanks for saying this. I go out with a chick who is a huge DS9 fan when I'm in San Fran. We have had huge disagreements about the show.

    I think the first change I'd make would be to replace Sisko with Sisqo. The second change would be to kill off Odo, Bashir and Worf in a three-way multi species gay buttsecks orgy that gets attacked by Cardassian terrorists.

  • Judge Harry Stone||

    Pull my finger...and fifty dollars and time served!

  • ||

    As long as the city government is in the business of giving citizens a place to dump feces, its not so much of a constitutional stretch to say it should happen in such a manner that won't poison people and property.

    The pols' offices that belong to the citizenry would make a really nice disposal site, and who really thinks local politicians are actually people?

    I recall a saying entailing something about not shitting where one eats...

  • ||

    without wanting to dig up Roddenberry's grave to punch him in what was formerly his balls.

    Whoa, whoa, whoa there, diminutive Mediterranean goddess! You can thank that apostate Prick Berman for that, that...failed lab experiment known as DS9 (Jadzia Dax and Quark excepted).

  • ||

    Odo, Bashir and Worf in a three-way multi species gay buttsecks orgy that gets attacked by Cardassian terrorists.

    Define "attacked". The Cardassians are a kinky people!

  • ||

    Attacked with an Orgasmorator.

    Now that is an underrated movie.

  • ||

    Now that is an underrated movie.

    Indeed. Now, if you'll excuse me, but I have to exchange one altered state of consciousness for another and drop anchor in the sea of tranquility. Good night.

  • PacRim Jim||

    Make pensions of government executives proportional to future economic performance of the city.

  • ||

    i haven't read the comments, but first of all Kenny's list is not Kenny's list. It is from Stockdale at 24wallstreet.

    And the debt table is totally screwed up. The debt is expressed in ($000)...or so the table says. So I checked the one super small county in NH. Stockdales table is wrong, therefore Kenny'e table is wrong. At least for Strafford county the debt is expressed in dollars, not thousands.

    So, please, follow the links and do some math.

  • Spoonman.||

    The City of Houston has also managed to let the Astrodome fall into a dangerous level of disrepair while still in debt for its construction.

  • ||

    Harrisburg, Pennsylvania too.

    Meredith Whitney was way too aggressive in her estimates, and these two cases had special circumstances that make them a little suspect as far as bellwethers go, but it's disturbing anyway.

    I'd say I'd like to see Cavanaugh go another round with that joker from CNBC, but that dude from CNBC was such a pompous jackass, I don't think I could stand seeing that again. It'd be nice to see Cavanaugh go on with someone else.

  • Bill||

    After reading this tripe by Shikha Dalmia, I look forward to seeing Shikha receive a Nobel Prize; it would be as richly deserved as the one given to Obama.

  • MarkInFlorida||

    What's with this "undocumented worker" misnomer? They are not undocumented, they have birth certificates and driver licenses, right? (Mexican ones.) The problem is they illegally entered the country, so they are rightfully called "illegal aliens."

  • ||

    Shalia, Dear... Alabama's "...anti-undocumented law...", draconian or not, is a GOOD THING. Forced to go into debt you cannot repay by liberal judges is a BAD THING.

    BAD on the part of stinkin' judges and BAD on the part of stinkin' politicians who allowed it to go forward. Now we have an inevitable BANKRUPTCY.

    This is surely as logical as the sun rises in the East and sets in the West, isn't it?

  • Mulberry Bayswater Bag||

    Hey there just wanted to give you a quick heads up. The text in your post seem to be running off the screen in Ie. I’m not sure if this is a format issue or something to do with web browser compatibility but I thought I’d post to let you know. The style and design look great though! Hope you get the issue fixed soon. Cheers

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