Look around your town. How do the streets look? Not good, right? Lots of pot holes and cracks and stuff? Well, it’ll probably end up getting worse. According to economists, 100 US cities are threatened by bankruptcy, thanks to $2 TRILLION dollars in debt.
“Next to housing this is the single most important issue in the US and certainly the biggest threat to the US economy,” said economist Meredith Whitney on CBS’s 60 Minutes. “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 sizable defaults – more. This will amount to hundreds of billions of dollars’ worth of defaults.”
Here’s where it gets dangerous. What happens is that problems roll uphill, not downhill. In the real world, the poop rolls downward, but in the government world, problems creep uphill. Bankrupt cities turn to states, who then go bankrupt. Bankrupt states turn to the federal government, leeching even more money in support from federal funds. Where does the country go to borrow money? Well, China, of course.
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